EXHIBIT A
$35,000,000
Sierra Pacific Power Company
Collateralized Medium-Term Notes, Series D
Due from 9 months to 40 years from
Date of Issue
DISTRIBUTION AGREEMENT
February 21, 1997
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Sierra Pacific Power Company, a Nevada corporation (the "Company"),
proposes to issue and sell from time to time its Collateralized Medium-Term
Notes, Series D, due from nine months to 40 years from the date of issue, in
an initial aggregate principal amount of $35,000,000 (the "Notes") and agrees
with each of you (individually, an "Agent" and collectively, the "Agents") as
set forth in this Agreement.
The Notes are to be issued from time to time pursuant to an indenture,
dated as of June 1, 1992 (as heretofore supplemented and as supplemented by
the Fourth Supplemental Indenture dated as of February 1, 1997 relating to
the Notes (the "Fourth Supplemental Indenture") and as it may be further
supplemented or amended from time to time (the "Indenture"), between the
Company and Bankers Trust Company, as trustee (the "Trustee"). The Notes
will be secured by one or more first mortgage bonds (the "Mortgage Bonds") to
be issued and delivered by the Company to the Trustee. The Mortgage Bonds
will be issued pursuant to an Indenture of Mortgage, dated as of December 1,
1940, from the Company's predecessor to The New England Trust Company (State
Street Bank & Trust Company, as successor trustee) and Xxx X. Xxxxxx (Xxxxxx
X. Xxxxxxx, as successor trustee), as amended and supplemented and as it will
be further supplemented by a Thirty-fifth Supplemental Indenture dated as of
February 1, 1997 (said Indenture of Mortgage, as so amended and supplemented
and to be supplemented, and said supplemental indenture, being hereinafter
referred to as the "Mortgage Indenture" and the "Thirty-fifth Supplemental
Indenture", respectively).
The Notes shall have the maturity ranges, applicable interest rates or
interest rate formulas, issue prices, redemption and repayment provisions and
other terms set forth in the Prospectus referred to in Section l(c) hereof as
it may be amended or supplemented from time to time, including any Pricing
Supplement (as such term is defined in Section 3(a) hereof). The Notes will
be issued, and the terms thereof established, from time to time, by the
Company in accordance with the Indenture and the Procedures referred to in
Section 2(f) hereof. This Agreement shall only apply to sales of the Notes
and not to sales of any other securities or evidences of indebtedness of the
Company and only on the specific terms set forth herein.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell its Notes directly on its own
behalf or to designate or select additional agents as set forth in Section 11
hereof, the Company hereby (i) appoints each of the Agents as the
co-exclusive agents of the Company for the purpose of soliciting or receiving
offers to purchase Notes from the Company and (ii) agrees that whenever the
Company determines to sell Notes directly to an Agent as principal it will
enter into a separate agreement (each a "Purchase Agreement"). Each such
Purchase Agreement, whether oral (and confirmed in writing, which may be by
facsimile transmission) or in writing, shall contain such information (as
applicable) set forth in the form of Purchase Agreement attached as Exhibit A
to this Agreement, relating to such sale in accordance with Section 2(e)
hereof.
SECTION l. Representations and Warranties. The Company represents and
warrants to each Agent as of the date hereof, as of the Commencement Date
referred to in Section 2(g) hereof, and as of the times referred to in
Sections 6(a) and 6(b) hereof (the Commencement Date and each such time being
hereinafter sometimes referred to as a "Representation Date"), as follows:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada, has the
corporate power and authority to own or lease and operate its properties,
has the corporate power, authority and franchises to carry on its
business as now conducted and has the corporate power and authority to
carry on its business as presently proposed to be conducted, all as
described in the Prospectus hereinafter referred to; and the Company is
duly qualified and is authorized to do business and is in good standing
as a foreign corporation in each jurisdiction where the ownership or
character of its properties or the nature of its business or activities
makes such qualification necessary and where the failure so to qualify or
be in good standing would have a material adverse effect on the condition
(financial or other), net worth or results of operations of the Company
and its subsidiaries considered as one enterprise. All of the
outstanding shares of Common Stock of the Company are validly issued and
are held of record by Sierra Pacific Resources, a Nevada corporation.
2
(b) Each of the subsidiaries of the Company is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has the corporate power and authority to
own or lease and operate its properties, has the corporate power,
authority and franchises to carry on its business as now conducted and
has the corporate power and authority to carry on its business as
presently proposed to be conducted; each of the subsidiaries of the
Company is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in each jurisdiction where the failure
so to qualify or be in good standing would have a material adverse effect
on the condition (financial or other), net worth or results of operations
of the Company and its subsidiaries considered as one enterprise; all of
the outstanding shares of capital stock of each subsidiary of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable; and all of the capital stock of each such subsidiary owned
by the Company, directly or through subsidiaries, is owned free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(c) A registration statement on Form S-3, including a prospectus,
relating to the Notes has been filed with the Securities and Exchange
Commission (the "Commission") and has become effective. No order
preventing or suspending the use or effectiveness of the Prospectus (as
defined below) has been issued by the Commission or is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission. Such registration statement in the form in which it became
effective, and as from time to time supplemented, and including all
exhibits thereto is referred to as the "Registration Statement"; the
prospectus relating to the Notes in the form in which it has most
recently been filed, or transmitted for filing, with the Commission
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Act"), together with all amendments or supplements thereto, is
hereinafter referred to as the "Prospectus." Any reference to the Act
shall include the rules and regulations of the Commission promulgated
thereunder. Any reference to the Registration Statement or Prospectus or
any amendment or supplement thereto shall include all documents
incorporated by reference therein (the "Incorporated Documents") pursuant
to the applicable form under the Act. The Registration Statement and the
Prospectus comply, and will, as amended or supplemented, if applicable,
comply at all times during any Marketing Period (as defined below), in
all material respects with the requirements of the Act and do not and
will not contain any 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 light of the circumstances under which they were
or are made, not misleading, except that the foregoing does not apply to
statements in or omissions from any such documents made in reliance upon
and in conformity with written information furnished to the Company by
any Agent specifically for use therein, or as to any statement in or
omission from the Statement of Eligibility and Qualification (Form T-1)
of the Trustee under the Indenture. "Marketing Period" shall mean any
time when no suspension of solicitation of offers to purchase Notes
pursuant to Sections 2(b) and 3(c) hereof shall be in effect and at any
time when any Agent shall own any Notes purchased by such Agent from the
Company with the intention of reselling them for a period not to exceed
ninety (90) days after the delivery of, and payment for, such Notes or
the Company has accepted an offer to purchase Notes but the related
settlement has not occurred.
3
(d) The Incorporated Documents complied when filed with the
Commission, comply and will comply at all times during each Marketing
Period, in all material respects with the applicable provisions of the
Act, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and, when read together and with the other information
in the Registration Statement or Prospectus, did not, do not and will not
contain any untrue statement of a material fact and did not, do not and
will not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were or are made, not misleading, except that the
foregoing does not apply to statements in or omissions from any such
documents made in reliance upon and in conformity with written
information furnished to the Company by any Agent specifically for use
therein. All references to the Exchange Act or the Trust Indenture Act
shall include the rules and regulations of the Commission promulgated
thereunder. The Incorporated Documents have been and will be at all
times during each Marketing Period timely filed as required by the
Exchange Act. There are no contracts or documents of the Company or any
subsidiary of the Company which are required to be filed as exhibits to
the Registration Statement which have not been filed as required.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
contemplated in the Prospectus, there has not been any material adverse
change in the condition (financial or other), net worth or results of
operations of the Company and the subsidiaries considered as one
enterprise.
(f) The financial statements in the Registration Statement and the
Prospectus fairly present and will fairly present at all times during
each Marketing Period the financial condition of the Company and the
results of its operations; and said financial statements (including the
related notes) have been and will be at all times during each Marketing
Period prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved (except
for any changes in which the independent accountants for the Company have
concurred and which have been specifically disclosed to the Agents).
(g) The outside auditors whose report appears in the Company's most
recent Annual Report on Form 10-K of the Company are independent public
accountants as required by the Act.
4
(h) Prior to each issuance and sale of Notes, the Company will have
full corporate power and lawful corporate authority to authorize, issue
and sell the Notes being issued and sold at that time, on the terms and
conditions set forth herein, and has taken or will take all corporate
action necessary therefor; the Company has obtained every consent,
approval, authorization or other order of any regulatory body which is
required for such authorization, issue or sale except as may be required
under the Act or state securities laws; and, when duly and validly
executed, authenticated and issued as provided in the Indenture and
delivered pursuant to this Agreement and the Indenture, the Notes will
constitute valid, legal and binding obligations of the Company
enforceable against it in accordance with their respective terms and the
terms of the Indenture and entitled to the benefits of the Indenture,
except as enforcement thereof may be limited by bankruptcy, insolvency,
or other similar laws relating to or affecting enforcement of creditors'
rights generally or by general equity principles. The Indenture conforms
and the Notes will conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the
Prospectus. The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid, legal and binding
instrument of the Company enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, or other similar laws relating to or affecting
enforcement of creditors' rights generally or by general equity
principles. The Indenture has been duly qualified under the Trust
Indenture Act.
(i) Except as set forth in the Prospectus, the Company is not in
violation of its Articles of Incorporation or by-laws or in default under
any agreement, indenture or instrument, the effect of which violation or
default would be materially adverse to the condition (financial or
other), net worth or results of operations of the Company. The
performance by the Company of its obligations under this Agreement and
any applicable Purchase Agreement and the consummation of the
transactions contemplated herein and therein and the fulfillment of the
terms hereof and thereof and execution and delivery by the Company of,
and the compliance by the Company with, all the terms and provisions of
the Notes and the Indenture will not result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, note agreement or other
material agreement or instrument to which the Company or any of its
subsidiaries is a party, or by which they or any of their property is
bound, or the Articles of Incorporation or by-laws of the Company or any
of its subsidiaries or any order, rule or regulation applicable to the
Company or any of its subsidiaries of any court or of any federal or
state regulatory body or administrative agency or other governmental body
having jurisdiction over the Company or any of its subsidiaries or their
respective or collective property.
(j) Except as set forth in the Prospectus, there is no pending
action, suit or other proceeding to which the Company is a party or of
which any property of the Company or any of its subsidiaries is the
subject, before or by any court or other governmental body, which is
likely to result in any material adverse change in the condition
(financial or other), net worth or results of operations of the Company
and its subsidiaries considered as one enterprise; and, except as set
forth in the Prospectus, no such action, suit or proceeding is known by
the Company to be threatened or contemplated.
5
(k) The certificates delivered pursuant to Section 5(h) hereof and
all other documents delivered by the Company or its representatives in
connection with the issuance and sale of the Notes were on the dates on
which they were delivered in all material respects true and complete.
(l) Each of this Agreement and any applicable written Purchase
Agreement has been or will be duly and validly authorized, executed and
delivered by the Company and, upon execution and delivery by the Agents
and subject to any principles of public policy limiting the right to
enforce the indemnification provisions contained herein, will be a valid
and binding agreement of the Company.
(m) Each of the Mortgage Indenture and the Thirty-fifth
Supplemental Indenture has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
or other similar laws relating to or affecting enforcement of creditors'
rights generally or by general equity principles. The Mortgage Indenture
has been qualified under the Trust Indenture Act.
(n) The Company has good and sufficient title to all the properties
described as owned by it in, and subject to the lien of, the Mortgage
Indenture (the "Mortgage Properties"), subject only to Permitted Liens
(as defined in the Mortgage Indenture), and to minor defects and
irregularities customarily found in properties of like size and character
that do not materially impair the use of the property affected thereby in
the operation of the business of the Company; the descriptions in the
Mortgage Indenture of the Mortgage Properties are adequate to constitute
the Mortgage Indenture a lien thereon; and the Mortgage Indenture
constitutes a valid lien on the Mortgage Properties, which include
substantially all of the permanent physical properties and franchises of
the Company (other than those expressly excepted), subject only to the
exceptions enumerated above.
(o) The Mortgage Bonds deposited with the Trustee as the basis for
the issuance of the Notes have, to the extent that such Mortgage Bonds
have been designated by the Company as designated mortgage bonds (the
"Designated Mortgage Bonds"), been duly pledged to the Trustee, and the
Indenture will, upon payment for the Notes issued upon the basis of the
Designated Mortgage Bonds so deposited, constitute a valid first lien
thereupon; no registration, recording or filing of the Indenture (or
notices or financing statements in respect thereof) is required by law to
make effective and to maintain the lien on the Designated Mortgage Bonds
so deposited intended to be created by the Indenture.
6
(p) The Company has full corporate power and lawful corporate
authority to authorize, issue and pledge the Mortgage Bonds and has taken
or will take all corporate action necessary therefor; the Company has
obtained every consent, approval, authorization or other order of any
regulatory body which is required for such authorization, issue or
pledge. The Mortgage Indenture and the Mortgage Bonds conform in all
material respects to all statements in relation thereto contained in the
Registration Statement and the Prospectus.
(q) The Mortgage Bonds deposited with the Trustee and the
Designated Mortgage Bonds pledged to the Trustee as the basis for the
issuance of the Securities constitute legal, valid and binding
obligations of the Company, subject, as to enforcement, to laws relating
to or affecting generally the enforcement of creditors' rights,
including, without limitation, bankruptcy and insolvency laws, and to
general principles of equity, and will be entitled to the security
afforded by the Mortgage Indenture equally and ratably with the
securities outstanding thereunder.
(r) The Company is not 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.
SECTION 2. Solicitations as Agent; Purchases as Principal.
(a) Appointment. Subject to the terms and conditions stated herein,
including, without limitation, the provisions of Section 11 hereof, the
Company hereby appoints each of the Agents as the co-exclusive agents of the
Company for the purpose of soliciting or receiving offers to purchase the
Notes from the Company by others during any Marketing Period. On the basis
of the representations and warranties contained herein, but subject to the
terms and conditions herein set forth, each Agent agrees, as a co-exclusive
agent of the Company, to use its reasonable best efforts to solicit offers to
purchase the Notes upon the terms and conditions set forth in the Prospectus.
The Agents are not authorized to appoint sub-agents or to engage the
services of any other broker or dealer in connection with the offer or sale
of the Notes, except as provided in paragraph (e) of this Section. Except as
otherwise provided herein, including, without limitation, the provisions of
Section 11 hereof, so long as this Agreement shall remain in effect with
respect to any Agent, the Company shall not, without the consent of each such
Agent (which consent shall not unreasonably be withheld), solicit or accept
offers to purchase Notes otherwise than through one of the Agents, PROVIDED,
HOWEVER, the Company expressly reserves the right to sell Notes directly to
investors, in which case no commission will be payable with respect to such
sale. Each Agent may also purchase Notes from the Company as principal for
purposes of resale, as more fully described in paragraph (e) of this Section.
(b) Suspension of Solicitation. The Company reserves the right, in its
sole discretion, to suspend solicitation of offers to purchase the Notes
commencing at any time for any period of time or indefinitely. As soon as
practicable, but in any event not later than one business day after receipt
of notice from the Company, the Agents will forthwith suspend solicitation of
offers to purchase Notes from the Company until such time as the Company has
advised the Agents that such solicitation may be resumed.
7
For the purpose of the foregoing sentence, "business day" shall mean any day
which is not a Saturday or Sunday and which is not a day on which (i) banking
institutions are generally authorized or obligated by law to close in the
City of New York or (ii) The New York Stock Exchange is closed for trading.
Upon receipt of notice from the Company as contemplated by Section 3(b)
hereof, each Agent shall suspend its solicitation of offers to purchase Notes
until such time as the Company shall have furnished it with an amendment or
supplement to the Registration Statement or the Prospectus, as the case may
be, contemplated by Section 3(c) and shall have advised such Agent that such
solicitation may be resumed.
(c) Agent's Commission. Upon the closing of the sale of any Notes sold
by the Company as a result of a solicitation made by or offer to purchase
received by an Agent, the Company agrees to pay such Agent a commission in
accordance with the schedule set forth in Exhibit B hereto.
(d) Solicitation of Offers. The Agents are authorized to solicit offers
to purchase the Notes only in the denominations specified in the Prospectus,
at a purchase price equal to 100% of the principal amount thereof or such
other principal amount or purchase price as shall be specified by the
Company. Each Agent shall communicate to the Company, orally or in writing,
each reasonable offer to purchase Notes received by it as an Agent. The
Company shall have the sole right to accept offers to purchase the Notes and
may reject any offer in whole or in part. Each Agent shall have the right,
in its discretion reasonably exercised, to reject any offer to purchase the
Notes received by it, without advising the Company, in whole or in part, and
any such rejection shall not be deemed a breach of its agreement contained
herein.
No Note which the Company has agreed to sell pursuant to this Agreement
shall be deemed to have been purchased and paid for, or sold by the Company,
until such Note shall have been delivered to the purchaser thereof against
payment therefor by such purchaser.
(e) Purchases as Principal. Each sale of Notes to any Agent as
principal, for resale to one or more investors or to another broker-dealer
(acting as principal for purposes of resale), shall be made in accordance
with the terms of this Agreement and a Purchase Agreement, whether oral (and
confirmed in writing by such Agent to the Company, which may be by facsimile
transmission) or in writing, which will provide for the sale of such Notes
to, and the purchase thereof by, such Agent. A Purchase Agreement may also
specify certain provisions relating to the reoffering of such Notes by such
Agent. The commitment of any Agent to purchase Notes from the Company as
principal shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Purchase
Agreement shall specify the principal amount and terms of the Notes to be
purchased by an Agent, the time and date (each such time and date being
referred to herein as a "Time of Delivery") and place of delivery of and
payment for such Notes and such other information (as applicable) as is set
forth in Exhibit A hereto.
8
The Company agrees that if any Agent purchases Notes as principal for resale
such Agent shall receive such compensation, in the form of a discount or
otherwise, as shall be indicated in the applicable Purchase Agreement or, if
no compensation is indicated therein, a commission in accordance with Exhibit
B hereto. Any Agent may utilize a selling or dealer group in connection with
the resale of such Notes. In addition, any Agent may offer the Notes it has
purchased as principal to other dealers. Any Agent may sell Notes to any
dealer at a discount and, unless otherwise specified in the applicable
Pricing Supplement (as such term is defined in Section 3(a) hereof), such
discount allowed to any dealer will not be in excess of the discount to be
received by such Agent from the Company. Such Purchase Agreement shall also
specify any requirements for delivery of opinions of counsel, accountant's
letters and officers' certificates pursuant to Section 5 hereof.
The obligation of the Company to sell and deliver Notes, pursuant to any
Purchase Agreement or otherwise, shall in each case be subject to the
condition that, on any settlement date for the sale of Notes or the Time of
Delivery, as the case may be, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and still be in effect and
no proceedings for that purpose shall be pending before, or to the knowledge
of the Company or the Agents contemplated or threatened by, the Commission.
Each date of delivery of and payment for Notes to be purchased by an Agent
pursuant to a Purchase Agreement is referred to herein as a "Settlement Date."
(f) Administrative Procedures. Administrative procedures respecting the
sale of Notes (the "Procedures") are set forth in Exhibit C hereto and may be
amended from time to time in writing signed by each of the Agents and the
Company. Each Agent and the Company agree to perform the respective duties
and obligations specifically provided to be performed by each of them herein
and in the Procedures. The Procedures shall apply to all transactions
contemplated hereunder including sales of Notes to any Agent as principal
pursuant to a Purchase Agreement, unless otherwise set forth in such Purchase
Agreement.
(g) Delivery of Documents. The documents required to be delivered by
Section 5 hereof shall be delivered at the offices of Ropes & Gray not later
than 10:00 a.m., Boston time, on the date of this Agreement or at such later
time as may be mutually agreed upon by the Company and the Agents, which in
no event shall be later than the time at which the Agents commence
solicitation of offers to purchase Notes hereunder. The date of delivery of
such documents is referred to herein as the "Commencement Date."
(h) Obligations Several. The Company acknowledges that the obligations
of the Agents under this Agreement are several and not joint.
SECTION 3. Covenants of the Company. The Company covenants and agrees
with each of the Agents, as follows:
9
(a) Amendments and Supplements to Registration Statement and
Prospectus. The Company will give the Agents notice of its intention to
file any amendment to the Registration Statement or amendment or
supplement to the Prospectus (other than a supplement providing solely
for the specification of the interest rates, maturity dates, issuance
prices, redemption terms and prices, if any, and other terms of Notes
sold pursuant hereto (any such supplement being hereinafter called a
"Pricing Supplement")), whether by the filing of documents pursuant to
the Act, the Exchange Act or otherwise, and will furnish the Agents with
copies of any such amendment or supplement or other documents proposed to
be filed a reasonable time in advance of such proposed filing.
(b) Notice to Agents of Certain Events. The Company will notify
each of the Agents immediately, and confirm in writing if requested by
the Agents in any particular instance, (i) when any amendment or
post-effective amendment to the Registration Statement has been filed
and/or becomes effective or when any supplement or amendment to the
Prospectus has been filed, (ii) of the issuance of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus
relating to the Notes or the Prospectus or of the initiation or
threatening known by it of any proceedings for such purposes, (iii) of
the receipt of any comments from the Commission in respect of the
Registration Statement, any such preliminary prospectus or the
Prospectus, or requesting the amendment or supplementation of the
Registration Statement, any such preliminary prospectus or the Prospectus
or additional information, (iv) of any action by any governmental
authority altering, suspending or otherwise affecting any authorization,
consent, approval or waiver issued in connection with the Notes and (v)
of the commencement of any litigation or administrative proceeding
relating to the issue and sale of the Notes. If the Commission shall
enter a stop order or any order preventing or suspending the use of any
such preliminary prospectus or the Prospectus at any time, or shall
initiate any proceedings for such purposes, the Company will make every
reasonable effort to prevent the issuance of such order and, if issued,
to obtain the lifting thereof. If the Prospectus is amended or
supplemented as a result of the filing under the Exchange Act of any
document incorporated by reference in the Prospectus, no Agent shall be
obligated to solicit offers to purchase Notes so long as it is not
reasonably satisfied with such documents.
(c) Revisions to Prospectus or Registration Statement. During any
Marketing Period, the Company will comply with all requirements imposed
upon it by the Act and the Exchange Act, as now and hereafter amended, as
from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Notes as contemplated by the provisions
hereof and the Prospectus; and if during any Marketing Period any event
occurs or condition exists 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 light of the circumstances then existing, not misleading, or
if, in the opinion of the Agents (of which opinion such Agents shall
immediately notify the Company by telephone with confirmation in writing)
or in the opinion of the Company, during such period it is necessary to
amend or supplement the Registration Statement or the Prospectus, as then
amended or supplemented, to comply in all material respects with the Act
or the Exchange Act, the Company will immediately notify each of the
Agents by telephone (with confirmation in writing) to suspend
solicitation of offers to purchase Notes and, if so notified by the
Company, the Agents shall forthwith suspend such solicitation and cease
using the Prospectus, as then amended or supplemented.
10
If the Company shall decide to amend or supplement the Registration
Statement or Prospectus, as then amended or supplemented, it shall so
advise the Agents promptly by telephone (with confirmation in writing)
and, at its expense, shall prepare and cause to be filed promptly with
the Commission an amendment or supplement to the Registration Statement
or Prospectus, as then amended or supplemented, that will correct such
statement or omission or effect such compliance and will supply such
amended or supplemented Prospectus to the Agents in such quantities as
they may reasonably request. If any documents, certificates, opinions
and letters furnished to the Agents pursuant to Sections 6(b), 6(c) and
6(d) in connection with the preparation and filing of such amendment or
supplement are satisfactory in all respects to the Agents, upon the
filing with the Commission of such amendment or supplement to the
Prospectus or upon the effectiveness of an amendment to the Registration
Statement, the Agents will resume the solicitation of offers to purchase
Notes hereunder. Notwithstanding any other provision of this Section
3(c), until the distribution of any Notes an Agent may own as principal
has been completed, if any event described above in this paragraph (c)
occurs, the Company will, at its own expense, forthwith prepare and cause
to be filed promptly with the Commission an amendment or supplement to
the Registration Statement or Prospectus, as then amended or
supplemented, satisfactory in all respects to such Agent, will supply
such amended or supplemented Prospectus to such Agent in such quantities
as it may reasonably request and shall furnish to such Agent pursuant to
Sections 6(b), 6(c) and 6(d) such documents, certificates, opinions and
letters as it may request in connection with the preparation and filing
of such amendment or supplement; provided that should such event
described above in this paragraph (c) relate solely to activities of any
Agent or Agents, then such Agent or Agents, as the case may be, shall
assume the expense of preparing and furnishing any such amendment or
supplement.
(d) Earning Statement. As soon as practicable the Company will
make generally available to its security holders and deliver to each of
the Agents an earning statement which shall satisfy the provisions of
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder, including Rule 158 issued thereunder.
(e) Delivery of Signed Registration Statement and Other Documents.
The Company will deliver to each of the Agents and to counsel for the
Agents without charge as promptly as practicable a signed copy of the
Registration Statement and all amendments thereto including all exhibits
filed therewith and signed consents, certificates and opinions of
accountants and of any other persons named in the Registration Statement
as having prepared, certified or reviewed any part thereof, and will
deliver to the Agents without charge such number of unsigned copies of
the Registration Statement, without exhibits, and of all amendments
thereto, as the Agents may reasonably request. The Company will deliver
to or upon order of the Agents without charge as many copies of each
preliminary prospectus relating to the Notes as the Agents may reasonably
request and as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Agents may reasonably request.
11
(f) Blue Sky Qualifications. The Company will cooperate with the
Agents in connection with the qualification of the Notes for sale under
the securities laws of such jurisdictions as the Agents may reasonably
designate and the continuance of such qualifications in effect so long as
required for the distribution of the Notes, provided that the Company
shall not be required to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to submit to any
requirement which it deems unduly burdensome. The Company will advise
each of the Agents promptly of any order or communication of any public
authority addressed to the Company suspending or threatening to suspend
the qualification of the Notes for sale, or the eligibility of the Notes
for purchase by such institutions, in any jurisdiction.
(g) Copies of Reports and Financial Statements. For the period
ending five years from the Commencement Date, the Company will deliver to
each of the Agents (i) as soon as available, a copy of each report of the
Company mailed to public security holders or filed with the Commission
and (ii) such additional information concerning the business and
financial condition of the Company as such agent may from time to time
reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission).
(h) Application of Net Proceeds. The Company will apply the net
proceeds from the sale of the Notes for the purposes set forth in the
Prospectus.
(i) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of paragraphs (c) or (g) of this
Section 3 during any Marketing Period from the time the Agents shall have
suspended solicitation of purchases of the Notes in their capacity as
agents pursuant to a request from the Company pursuant to Section 2(b)
hereof to the time the Company shall determine that solicitation of
purchases of the Notes should be resumed or shall subsequently enter into
a new Purchase Agreement with an Agent, PROVIDED, HOWEVER, that
compliance with such paragraphs shall be required for any portion of such
period during which any Agent shall hold any Notes as principal purchased
pursuant to the Purchase Agreement.
(j) Downgrading. The Company shall notify the Agents promptly in
writing of any downgrading, or its receipt of any notice of any intended
or potential downgrading or of any review for possible change that does
not indicate the direction of the possible change, in the rating accorded
any of the Company's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
12
(k) During the period beginning the date of any Purchase Agreement
and continuing to and including the Settlement Date with respect to such
Purchase Agreement, the Company will not, without such Agent's prior
written consent, offer, sell, contract to sell or otherwise dispose of
any debt securities of the Company or warrants to purchase debt
securities of the Company substantially similar to such Notes (other than
(i) Notes that are to be sold pursuant to such Purchase Agreement, (ii)
Notes previously agreed to be sold by the Company and (iii) commercial
paper issued in the ordinary course of business), except as may otherwise
be provided in such Purchase Agreement.
SECTION 4. Payment of Expenses. The Company will pay (i) the costs
incident to the authorization, issuance, sale and delivery of the Notes and
any taxes payable in connection therewith, (ii) the costs incident to the
preparation, printing and filing under the Act of the Registration Statement
and any amendments and exhibits thereto and the Prospectus and any amendments
and supplements thereto, (iii) the costs incident to the preparation,
printing and filing of any document and any amendments and exhibits thereto
required to be filed by the Company under the Exchange Act, (iv) the costs of
distributing the Registration Statement, as originally filed, and each
amendment and post-effective amendment thereof (including exhibits), any
preliminary prospectus, the Prospectus, any supplement or amendment to the
Prospectus and any documents incorporated by reference in any of the
foregoing documents, (v) the costs and expenses incident to the preparation,
execution and delivery of the Indenture and the Supplemental Indenture, (vi)
the fees and disbursements of the Trustee, any paying agent, any calculation
agent, and any other agents appointed by the Company, and their respective
counsel, (vii) the costs and fees in connection with the listing of the Notes
on any securities exchange, (viii) the cost of any filings with the National
Association of Securities Dealers, Inc., (ix) the fees and disbursements of
counsel for the Company, counsel for the Agents, counsel for the Trustee and
the Company's accountants, (x) the fees paid to rating agencies in connection
with the rating of the Notes, (xi) the fees and expenses of qualifying the
Notes under the securities laws of the several jurisdictions as provided in
Section 3(f) hereof and of preparing and printing and distributing a Blue Sky
Memorandum, (xii) all advertising expenses in connection with the offering of
the Notes incurred with the consent of the Company, (xiii) all reasonable
out-of-pocket expenses incurred by the Agents in connection with the
transactions contemplated hereunder, (xiv) any expenses incurred by the
Company in connection with a "road show" presentation to potential investors
and (xv) other costs and expenses incident to the performance of the
Company's obligations under this Agreement.
SECTION 5. Conditions of Obligations of Agents. The obligation of the
Agents, as the agents of the Company, under this Agreement to solicit offers
to purchase the Notes, the obligation of any person who has agreed to
purchase Notes to make payment for and take delivery of Notes, and the
obligation of any Agent to purchase Notes pursuant to any Purchase Agreement,
is subject to the accuracy, on each Settlement Date and in the case of an
Agent's obligation to solicit offers to purchase Notes, at the time of such
solicitation, of the representations and warranties of the Company contained
herein, to the accuracy of the statements of the Company's officers made in
any certificate furnished pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
13
(a) Registration Statement. The Registration Statement shall have
become effective under the Act and the Indenture shall have been
qualified under the Trust Indenture Act, and no stop order suspending the
effectiveness of the Registration Statement or the qualification of the
Indenture, or order preventing or suspending the use of any Prospectus,
shall have been issued and no proceeding for that purpose shall have been
initiated or, to the knowledge of the Company or the Agents, contemplated
or threatened by the Commission; any request for additional information
on the part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with;
and no amendment to the Registration Statement or Prospectus shall have
been filed to which the Agents shall have reasonably objected, in
writing, after having received notice pursuant to Section 3(a).
(b) Regulatory Approvals. There shall be in full force and effect
appropriate orders or decrees of the Public Service Commission of Nevada
and the California Public Utilities Commission (or such other regulatory
bodies as may subsequently have jurisdiction) authorizing to the extent
required by law the offering, issuance and sale of the Notes as herein
provided. Any such decision, order or decree issued after the date
hereof shall contain no condition inconsistent with the provisions hereof
or reasonably unacceptable to the Agents (it being understood and agreed
that no such order or decree in effect on the date of this Agreement
contains any such unacceptable provision).
(c) Absence of Certain Changes. Subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any downgrading nor shall any
notice have been given of any intended or potential downgrading or of any
review for possible change that does not indicate the direction of the
possible change, in the ratings accorded the Company's debt securities by
Xxxxx'x Investors Service, Inc., Standard and Poor's Corporation or Duff
& Xxxxxx, Inc., or, except as contemplated in the Prospectus, any change
in the capital stock, short-term debt or long-term debt of the Company,
or any adverse change or any development involving a prospective adverse
change in the condition (financial or other), net worth or results of
operations of the Company and its subsidiaries, considered as one
enterprise, which, in any such event, in the Agents' judgment, is
material and adverse and that makes it, in the judgment of such Agents,
impracticable to market the Notes on the terms and in the manner
contemplated by the Prospectus, as so amended or supplemented, or
materially impairs the investment quality of the Notes.
(d) Legal Matters Satisfactory to Counsel. The authorization and
issuance of the Notes, the Indenture, the Mortgage Indenture, the
Mortgage Bonds, the Registration Statement, the Prospectus and all
corporate proceedings and other legal matters incident thereto shall be
satisfactory in all respects to counsel for the Agents, and the Company
shall have furnished to counsel for the Agents such documents as they may
reasonably request to enable them to be satisfied with respect to the
matters referred to in this subparagraph and to pass upon such matters.
14
(e) Opinion of Xxxxxx, Xxxx & Xxxxxxx. On the Commencement Date,
the Agents shall have received the opinion, addressed to the Agents and
dated the Commencement Date, of Xxxxxx, Xxxx & Xxxxxxx, special counsel
for the Company, in the form set forth in Exhibit D to this Agreement.
(f) Opinion of Xxxxxxxx and Wedge. On the Commencement Date, the
Agents shall have received the opinion, addressed to the Agents and dated
the Commencement Date, of Xxxxxxxx and Wedge, counsel for the Company in
the state of Nevada, in the form set forth in Exhibit E to this Agreement.
(g) Opinion of Xxxxxx & Xxxxx LLP. On the Commencement Date, the
Agents shall have received the opinion, addressed to the Agents and dated
the Commencement Date, of Xxxxxx & Xxxxx XXX, counsel for the Company in
the State of California, in the form set forth in Exhibit F to this
Agreement.
(h) Officers' Certificate. The Company shall have furnished to the
Agents on the Commencement Date a certificate, dated the Commencement
Date as though made at and as of the Commencement Date, of its President
or a Vice President and of a principal financial or accounting officer of
the Company, covering the matters set forth in Exhibit G to this
Agreement.
(i) Accountants' Letters. The Company shall have furnished to the
Agents on the Commencement Date a letter from its independent
accountants, addressed jointly to the Company and the Agents and dated
the Commencement Date, of the type described in the American Institute of
Certified Public Accountants Statement on Auditing Standards No. 72,
covering specified financial statement items and procedures set forth in
Exhibit H to this Agreement.
(j) Additional Conditions. There shall not have occurred: a
suspension or material limitation in trading in securities generally on
or by the New York Stock Exchange, the American Stock Exchange or the
over-the-counter market or the establishment of minimum prices on such
exchanges or market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction; suspension
of trading of any securities of the Company on any exchange or in any
over-the-counter market; a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial
national calamity or emergency; if the effect of any such occurrence in
the judgment of the Agents makes it impracticable or inadvisable to
proceed with the solicitation of offers to purchase Notes or the purchase
of Notes from the Company as principal pursuant to the applicable
Purchase Agreement, as the case may be, on the terms and in the manner
contemplated by the Prospectus, as amended or supplemented.
15
(k) Opinion of Ropes & Gray. At the Commencement Date, the Agent
shall have received the opinion, addressed to the Agents and dated the
Commencement Date of Ropes & Gray, counsel for the Agents, in form and
substance satisfactory to the Agents with respect to the incorporation of
the Company, the validity of the Notes, the Registration Statement, the
Prospectus and other related matters as they may require, and the Company
shall have furnished to such counsel such documents as the Agents may
reasonably request for the purpose of enabling them to pass upon such
matters.
(l) Other Information and Documentation. Prior to the Commencement
Date, the Company shall have furnished to the Agents such further
information, certificates and documents as the Agents or counsel for the
Agents may have reasonably requested.
Xxxxx & Xxxx and Xxxxxx, Xxxx & Xxxxxxx, in giving their opinions
pursuant to this Section 5, may rely upon the opinion of Xxxxxx & Xxxxx XXX
as to all legal conclusions affected by the laws of California, and upon the
opinion of Xxxxxxxx and Xxxxx as to all legal conclusions affected by the
laws of Nevada.
SECTION 6. Additional Covenants of the Company. The Company covenants
and agrees that:
(a) Acceptance of Offer Affirms Representations and Warranties.
Each acceptance by it of an offer for the purchase of Notes shall be
deemed to be an affirmation that the representations and warranties of
the Company contained in this Agreement and in any certificate
theretofore given to the Agents pursuant hereto are true and correct at
the time of such acceptance, and an undertaking that such representations
and warranties will be true and correct at the time of delivery to the
purchaser or his agent of the Notes relating to such acceptance as though
made at and as of each such time (and such representations and warranties
shall relate to the Registration Statement and the Prospectus as amended
or supplemented to each such time).
(b) Subsequent Delivery of Officers' Certificates. The Company
agrees that during each Marketing Period, each time that the Registration
Statement or the Prospectus shall be amended or supplemented (other than
by a Pricing Supplement), each time the Company sells Notes to an Agent
as principal and the applicable Purchase Agreement specifies the delivery
of an officers' certificate under this Section 6(b) as a condition to the
purchase of Notes pursuant to such Purchase Agreement and each time the
Company files with the Commission any document incorporated by reference
into the Prospectus (other than any Current Report on Form 8-K unless an
Agent shall otherwise reasonably request), the Company shall submit to
the Agents and their counsel a certificate of the President or Vice
President or a principal financial or accounting officer of the Company,
(i) as of the date of such amendment, supplement and Time of Delivery
16
relating to such sale or filing or (ii) if such amendment, supplement or
filing was not filed during a Marketing Period, as of the first day of
the next succeeding Marketing Period, representing that the statements
contained in the certificate referred to in Section 5(h) hereof which was
last furnished to the Agents are true and correct at the time of such
amendment, supplement or filing, as the case may be, as though made at
and as of such time (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented at such time) or, in lieu of such certificate, a certificate
of the same tenor as the certificate referred to in said Section 5(h),
modified as necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such
certificate.
(c) Subsequent Delivery of Legal Opinions. The Company agrees that
during each Marketing Period, each time that the Registration Statement
or the Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time the Company sells Notes to an Agent as
principal and the applicable Purchase Agreement specifies the delivery of
legal opinions under this Section 6(c) as a condition to the purchase of
Notes pursuant to such Purchase Agreement and each time the Company files
with the Commission any document incorporated by reference into the
Prospectus (other than any Current Report on Form 8-K unless an agent
shall otherwise reasonably request), the Company shall (i) concurrently
with such amendment, supplement and Time of Delivery relating to such
sale or filing or (ii) if such amendment, supplement or filing was not
filed during a Marketing Period, on the first day of the next succeeding
Marketing Period, furnish the Agents and their counsel with the written
opinions of counsel to the Company, addressed to the Agents and dated the
date of delivery of such opinion, in form satisfactory to the Agents, of
the same tenor as the opinions referred to in Sections 5(e), 5(f) and
5(g) hereof, respectively, but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended or supplemented to
the time of delivery of such opinion; PROVIDED, HOWEVER, that in lieu of
such opinions, such counsel may furnish the Agents and their counsel with
a letter to the effect that the Agents may rely on any prior opinion of
such counsel to the same extent as though it were dated the date of such
letter authorizing reliance (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of delivery of such
letters authorizing reliance).
(d) Subsequent Delivery of Accountants' Letters. The Company
agrees that during each Marketing Period, each time that the Registration
Statement or the Prospectus shall be amended or supplemented to include
additional financial information derived from the books and records of
the Company, each time the Company sells Notes to an Agent as principal
and the applicable Purchase Agreement specifies the delivery of letters
under this Section 6(d) as a condition to the purchase of Notes pursuant
to such Purchase Agreement and each time the Company files with the
Commission any document incorporated by reference into the Prospectus
which contains additional financial information derived from the books
and records of the Company, the Company shall cause the Company's
independent public accountants to furnish the Agents and their
17
counsel (i) concurrently with such amendment, supplement and Time of
Delivery relating to such sale or filing or (ii) if such amendment,
supplement or filing was not filed during a Marketing Period, on the
first day of the next succeeding Marketing Period, a letter, addressed
jointly to the Company and the Agents and dated the date of delivery of
such letter, in form and substance of the type described in the relevant
statements of auditing standards, currently American Institute of
Certified Public Accountants Statement on Auditing Standards No. 72, and
of the same tenor as the letters referred to in Section 5(i) hereof but
modified to relate to the Registration Statement and the Prospectus, as
amended and supplemented to the date of such letter, with such changes as
may be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company; PROVIDED,
HOWEVER, that if the Registration Statement or the Prospectus is amended
or supplemented solely to include financial information as of and for a
fiscal quarter, said outside auditors may refer to their previously
issued letter, shall reaffirm all statements made in that letter and may
limit the scope of such additional letter to the unaudited consolidated
financial statements included in such amendment or supplement and certain
agreed procedures, if any, of the type described in the American
Institute of Certified Public Accountants Statement on Auditing Standards
No. 72, covering specified financial statement items and procedures set
forth in Exhibit H to this Agreement.
(e) Opinions on Settlement Date. On any Settlement Date, the
Company shall, if requested by the Agent that solicited or received the
offer to purchase any Notes being delivered on such Settlement Date,
furnish such Agent and its counsel with the written opinions of counsel
to the Company, addressed to the Agents and dated such settlement date,
in form satisfactory to the Agents, of the same tenor as the opinions
referred to in Sections 5(e), 5(f) and 5(g) hereof, respectively, but
modified, as necessary, to relate to the Prospectus relating to the Notes
to be delivered on such settlement date; PROVIDED, HOWEVER, that in lieu
of such opinions, such counsel may furnish such Agent and its counsel
with a letter to the effect that such Agent may rely on any prior opinion
of such counsel to the same extent as though it were dated such
settlement date (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented to the time of delivery of such letter
authorizing reliance).
SECTION 7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Agent and
each person, if any, who controls such Agent within the meaning of the
Act or the Exchange Act from and against any losses, claims, damages or
liabilities and any action in respect thereof to which such Agent or such
controlling person may become subject, under the Act or otherwise, with
respect to the Notes, insofar as such losses, claims, damages,
liabilities or actions 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 arise out of or are based upon the omission
18
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse each Agent and each such controlling
person for any legal or other expenses reasonably incurred by such Agent
or such controlling person in connection with investigating or defending
against any such loss, claim, damage, liability or action; 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 any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the
Prospectus, or such amendment or such supplement, in reliance upon and in
conformity with written information furnished to the Company by such
Agent specifically for use in the preparation thereof, or as to any
statement in or omission from the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Indenture; and
provided, further, that, insofar as it relates to the Prospectus, the
indemnity agreement contained in this Section 7(a) shall not inure to the
benefit of any Agent or any person who controls such Agent on account of
any losses, claims, damages or liabilities (or actions in respect
thereof) arising from the sale of Notes by such Agent pursuant to a
Purchase Agreement to any person if a copy of the Prospectus, as amended
or supplemented, shall not have been sent or given to such person with or
prior to the written confirmation of the sale involved to the extent that
the Prospectus, as amended or supplemented, if so sent or delivered,
would have cured the defect in the Prospectus giving rise to such losses,
claims, damages, liabilities or actions in respect thereof; and provided,
further, that if, at any time after the date of filing the Prospectus or
any amendment or supplement to the Prospectus with the Commission, any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented ("Current Prospectus") would include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, and if the Company shall have furnished to any
Agent copies of an amended Prospectus ("Amended Prospectus") or of a
supplement to be attached to or furnished with the Current Prospectus
("Supplement"), to which the Agent shall not have objected pursuant to
Section 5(a) hereof, for delivery in connection with offers and sales of
the Notes, the indemnity agreement contained in this Section 7(a),
insofar as it relates to the Current Prospectus, shall not inure to the
benefit of such Agent on account of any losses, claims, damages,
liabilities or actions in respect thereof arising from the sale of Notes
by such Agent to any person subsequent to the time such copies have been
so furnished to such Agent, if a copy of the Amended Prospectus or the
Supplement, as the case may be, shall not have been sent or given to such
person with or prior to the written confirmation of the sale involved, to
the extent that the Amended Prospectus or the Supplement, if so sent or
delivered, would have cured the defect in the Current Prospectus giving
rise to such losses, claims, damages, liabilities or actions in respect
thereof. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
19
(b) Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, each of its directors, each of its officers
who has signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Act or the Exchange Act,
against any losses, claims, damages or liabilities and any action in
respect thereof to which the Company or any such director, officer or
controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out
of or are based upon (i) 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 arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, the
Prospectus or such amendment or such supplement, in reliance upon and in
conformity with written information furnished to the Company by such
Agent specifically for use therein, (ii) in the case of the sale of Notes
by such Agent pursuant to a Purchase Agreement to any person, the failure
of such Agent to send or give to such person a copy of the Prospectus, as
amended or supplemented, with or prior to the written confirmation of the
sale involved to the extent that the Prospectus, as amended or
supplemented, if so sent or delivered, would have cured the defect in the
Prospectus giving rise to such losses, claims, damages, liabilities or
actions, or (iii) the failure of such Agent to send or deliver to any
person an Amended Prospectus or Supplement, with or prior to the written
confirmation of a sale pursuant to a Purchase Agreement, to which Amended
Prospectus or Supplement the Agent shall not have objected pursuant to
Section 5(a) hereof and which the Company shall have furnished to such
Agent, if any event shall have occurred as a result of which (x) the
Current Prospectus would include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made when such Prospectus is delivered, not misleading and (y) the
Amended Prospectus or Supplement, as the case may be, so sent or
delivered, would have cured the defect in the Current Prospectus giving
rise to such losses, claims, damages, liabilities or actions. This
indemnity agreement will be in addition to any liability which such
Agents may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 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 this Section 7, notify the indemnifying party in
writing 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 this Section 7. 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 in, and, to the extent
that it may wish, jointly with any other indemnifying party, similarly
notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party, and
20
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 7 for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation, unless, in the case of an indemnification obligation
arising under subparagraph (a) of this Section 7, (i) the employment of
additional counsel has been authorized in writing by the Company in
connection with defending such action, or (ii) the Company and such Agent
or controlling person are advised by such additional counsel that such
Agent or controlling person has available defenses involving a potential
conflict with the interests of the Company, in either of which events,
the fees and expenses of such additional counsel shall be borne by the
Company.
(d) If the indemnification provided for in this Section 7 is
unavailable (or insufficient to hold harmless an indemnified party) under
subparagraph (a) or (b) above (by reason of a failure of the indemnified
party to give a notice required by subparagraph (c) above or for any
other reason whatever) to a party that would have been an indemnified
party under subparagraph (a) or (b) above ("indemnified party") in
respect of any losses, claims, damages, liabilities or actions referred
to therein, then each party that would have been an indemnifying party
thereunder ("indemnifying party") shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or actions in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and each
Agent on the other from the offering of the Notes to which such loss,
claim, damage or liability (or action in respect thereof) relates and the
relative fault of the Company on the one hand and each Agent on the other
in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or actions, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and each Agent 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
commissions (or discounts) received by each Agent with respect to such
offering. The relative fault of the Company on the one hand and each
Agent on the other hand 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 by such Agent and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. Each Agent's obligation
to contribute pursuant to this Section 7 shall be several in the
proportion that the principal amount of the Notes the sale of which by or
through such Agent gave rise to such losses, claims, damages or
liabilities bears to the aggregate principal amount of the Notes the sale
of which by or through any Agent gave rise to such losses, claims,
damages or liabilities, and not joint. The Company and the Agents agree
that it would not be just and equitable if contribution pursuant to this
subparagraph (d) were determined by pro rata allocation (even if the
Agents were treated as one entity for such purpose) or by any other
method of allocation which does not take
21
account of the equitable considerations referred to above in this
subparagraph (d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or actions referred
to above in this subparagraph (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim
(which shall be limited as provided in subparagraph (c) above if the
indemnifying party has assumed the defense of any such action in
accordance with the provisions thereof). Notwithstanding the provisions
of this Section 7, no Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes that
were offered and sold to the public through such Agent exceeds the amount
of any damages which such Agent 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.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 8. Status of each Agent. In soliciting offers to purchase the
Notes from the Company pursuant to this Agreement (other than in respect of
any Purchase Agreement), each Agent is acting individually and not jointly
and is acting solely as agent for the Company and not as principal. Each
Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes from the Company
has been solicited by such Agent and accepted by the Company, but such Agent
shall have no liability to the Company in the event any such purchase is not
consummated for any reason. If the Company shall default in its obligations
to deliver Notes to a purchaser whose offer it has accepted, the Company
shall (a) hold the Agents harmless against any loss, claim or damage arising
from or as a result of such default by the Company and (b), in particular,
pay to the Agents any commission to which they would be entitled in
connection with such sale.
SECTION 9. Representations and Warranties to Survive Delivery. All
representations and warranties of the Company contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of
the termination or cancellation of this Agreement or any investigation made
by or on behalf of any Agent or any person controlling such Agent or by or on
behalf of the Company, and shall survive each delivery of and payment for any
of the Notes.
SECTION 10. Termination. The appointment of an Agent and the
obligations of such Agent under this Agreement may be terminated at any time
either by the Company or by such Agent upon the giving of one day's written
notice of such termination to such Agent or the Company, as the case may be.
The provisions of Sections 2(c), 3(d), 3(f), 3(g), 4, 7, 8, 9, 12, 13 and 14
hereof shall survive any such termination.
22
SECTION 11. Additional Agents. The Company may appoint one or more
additional agents for the purpose of soliciting or receiving offers to
purchase the Notes from the Company by others; provided that any such
additional agent shall become a party to this Agreement prior to soliciting
or receiving offers to purchase the Notes.
SECTION 12. Notices. Except as otherwise provided herein, 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 the Agents shall be directed to them as
follows: Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: Medium-Term Note Department, Telephone No.: (000) 000-0000,
Telecopy No.: (000) 000-0000; UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxx, Telephone No.: (000) 000-0000,
Telecopy No.: (000) 000-0000; and X.X. Xxxxxxx & Sons, Inc., Xxx Xxxxx
Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxxx Xxxxxxx,
Telephone No.: (000) 000-0000, Telecopy No.: (000) 000-0000; notices to the
Company shall be directed to it as follows: 0000 Xxxx Xxxx, X.X. Box 30150,
Reno, Nevada 89520, Attention: Xxxxxxx X. Xxxxxxxx, Telephone No.: (702)
000-0000, Telecopy No.: (000) 000-0000; or at such other address as such
party may designate from time to time by notice duly given in accordance with
the terms of this Section 12.
SECTION 13. Binding Effect; Benefits. This Agreement shall be binding
upon each Agent, the Company, and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of
only those persons, except that (a) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall
also be deemed to be for the benefit of the person or persons, if any, who
control any Agent within the meaning of the Act or the Exchange Act, and (b)
the indemnity agreement of the Agents contained in Section 7 hereof shall be
deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of said Act or the Exchange Act. Nothing in
this Agreement is intended or shall be construed to give any person, other
than the persons referred to in this Section, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein. No purchaser of any of the Notes from any Agent shall be
construed as a successor or assign merely by reason of such purchase.
SECTION 14. Governing Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of New York. This
Agreement may be executed by the parties on separate counterparts and the
executed counterparts shall together constitute a single instrument.
23
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
SIERRA PACIFIC POWER COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxx
Senior Vice President, General Counsel
and Corporate Secretary
CONFIRMED AND ACCEPTED, as of the date first
above written:
XXXXXX BROTHERS INC.
By: /s/ Xxxxxx Xxxxxx
------------------------------------------
Xxxxxx Xxxxxx
Managing Director
X.X. XXXXXXX & SONS, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------
Xxxx X. Xxxxxxx
Vice President
UBS SECURITIES LLC
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------------
Xxxxxxx Xxxxxxx
Vice President
24
EXHIBIT A
Sierra Pacific Power Company
Collateralized Medium-Term Notes, Series D
Purchase Agreement
________________, 19__
[Agent's Name]
Dear Sirs:
Sierra Pacific Power Company (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated
February 21, 1997 (the "Distribution Agreement"), between the Company on the
one hand and Xxxxxx Brothers Inc., X.X. Xxxxxxx & Sons, Inc. and UBS
Securities LLC (the "Agents") on the other, to issue and sell to
____________________________ the securities specified in the Schedule hereto
(the "Purchased Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the Agents, as
agents of the Company, of offers to purchase Securities is incorporated
herein by reference in its entirety, and shall be deemed to be part of this
Purchase Agreement to the same extent as if such provisions had been set
forth in full herein. Nothing contained herein or in the Distribution
Agreement shall make any party hereto an agent of the Company or make such
party subject to the provisions therein relating to the solicitation of
offers to purchase securities from the Company, solely by virtue of its
execution of this Purchase Agreement. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of
the date of this Purchase Agreement, except that each representation and
warranty in Section 1 of the Distribution Agreement which makes reference to
the Prospectus shall be deemed a representation and warranty relation to the
Prospectus as amended and supplemented as of the date hereof to relate to the
Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees
to issue and sell to [Agent(s)] and [Agent(s)] agree[s] to purchase from the
Company the Purchased Securities, at the time and place, in the principal
amount and at the purchase price set forth in the Schedule hereto.
A-1
If the foregoing is in accordance with your understanding, please sign
and return to us three counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
SIERRA PACIFIC POWER COMPANY
By:________________________________________
Accepted in New York, New York
as of the date hereof:
[Agent]
A-2
Schedule to EXHIBIT A
Title of Purchased Securities:
Collateralized Medium-Term Notes, Series D
Aggregate Principal Amount:
$
[Price to Public:]
Purchase Price by: [Agents]
% of the principal amount of the Purchased Securities [, plus accrued
interest from to ] [and accrued amortization, if any,
from to ]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order
to the Company, in [New York Clearing House] [immediately available] funds
[By wire transfer to a bank account specified by the Company in [next
day] [immediately available] funds]
Date and Time of Delivery:
Closing Location:
[Specified Currency:]
Maturity:
Interest Rate:
%
Interest Payment Dates:
[months and dates]
A-3
Documents to be Delivered:
The following documents referred to in the Distribution Agreement
shall be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to in
Section 5(k).]
[(2) The opinion of counsel to the Company referred to in Section 5
(e).]
[(3) The opinion of counsel to the Company referred to in Section 5
(f).]
[(4) The opinion of counsel to the Company referred to in Section 5
(g).]
[(5) The officers' certificate referred to in Section 5 (h).]
[(6) The accountants' letter referred to in Section 5 (i).]
Other provisions (including Syndicate Provisions, if applicable):
A-4
EXHIBIT B
The Company agrees to pay each Agent a commission equal to the following
percentages of the principal amount of Notes sold to purchase solicited by
such Agent:
Commission
(as a percentage of
Term principal amount)
---- -----------------
From 9 months to less than one 1 year .125%
From 1 year to less than 18 months .150
From 18 months to less than 2 years .200
From 2 years to less than 3 years .250
From 3 years to less than 4 years .350
From 4 years to less than 5 years .450
From 5 years to less than 6 years .500
From 6 years to less than 7 years .550
From 7 years to less than 10 years .600
From 10 years to less than 15 years .625
From 15 years to less than 20 years .675
20 years or more .750
B-1
EXHIBIT C
ADMINISTRATIVE PROCEDURES
The Collateralized Medium-Term Notes, Series D, due from nine months to
40 years from their issue date (the "Notes"), are to be offered on a
continuing basis by Sierra Pacific Power Company (the "Issuer"). Xxxxxx
Brothers, Xxxxxx Brothers, Inc., X.X. Xxxxxxx & Sons, Inc. and UBS Securities
LLC, as agents, have each agreed to use reasonable efforts to solicit offers
to purchase the Notes. No Agent will be obligated to purchase Notes for its
own account. The Notes are being sold pursuant to a Distribution Agreement,
dated February 21, 1997 (the "Agency Agreement"), among the Issuer and
Agents, and will be issued pursuant to an Indenture, dated as of June 1,
1992, as supplemented (the "Indenture"), between the Issuer and Bankers Trust
Company, as trustee (the "Trustee"). The Notes will be secured by one or
more series of first mortgage bonds to be issued to and pledged by the Issuer
with the Trustee and will have been registered under the Securities Act of
1933, as amended (the "Act"). For a description of the terms of the Notes
and the offering and sale thereof, see the sections entitled "Description of
Notes," "Supplemental Plan of Distribution" and "Glossary" in the Prospectus
Supplement relating to the Notes, dated February 28, 1997, attached hereto
and hereinafter referred to as the "Prospectus Supplement," and the sections
entitled "Description of Debt Securities," "United States Taxation" and "Plan
of Distribution" in the Prospectus relating to the Notes, dated December 20,
1996, attached hereto and hereinafter referred to as the "Prospectus."
Defined terms used herein but not defined herein shall have the meanings
assigned to them in the Distribution Agreement, the Prospectus or the
Prospectus Supplement, as appropriate.
The Notes will be represented either by Global Notes delivered to The
Depository Trust Company ("DTC") or its nominee and recorded in the
book-entry system maintained by DTC or such nominee ("Book-Entry Notes") or
by certificates delivered to the Holders thereof or Persons designated by
such Holders ("Certificated Notes"). Notes for which interest is calculated
on the basis of a fixed interest rate are referred to herein as "Fixed Rate
Notes." Notes for which interest is calculated at a rate or rates determined
by reference to an interest rate formula are referred to herein as "Floating
Rate Notes."
Notes which are issued at a price lower than the principal amount thereof
and which provide that upon redemption or acceleration of the Maturity
thereof an amount less than the principal thereof shall become due and
payable are referred to herein as "Original Issue Discount Notes." For
special provisions relating to original Issue Discount Notes and other Notes
issued at a discount for tax purposes, see the section entitled "Certain
United States Federal Income Tax Consequences -- Original Issue Discount" in
the Prospectus.
The Notes will be denominated in U.S. dollars and payments of principal
of and any premium and interest on the Notes will be made in U.S. dollars in
the manner indicated in the Prospectus and the Prospectus Supplement.
C-1
Notes which provide that amounts payable by the Issuer in respect of
principal of or any premium or interest on the Notes shall be determined by
reference to the value, rate or price of one or more specified indices, are
referred to herein as "Indexed Notes." Specific information pertaining to
the method for determining the principal amounts payable, a historical
comparison of the value, rate or price of the specified index, indices and
the face amount of the Indexed Note and certain additional tax considerations
will be described in the applicable Pricing Supplement.
Administrative procedures and specific terms of the offering are
explained below. Part I indicates procedures applicable to all Notes; Part
II indicates specific procedures for Certificated Notes; and Part III
indicates specific procedures for Book-Entry Notes. Administrative and
record-keeping responsibilities will be handled for the Issuer by its Finance
Division. The Issuer will advise the Agents in writing of those persons
handling administrative responsibilities with whom the Agents are to
communicate regarding offers to purchase Notes and the details of their
delivery.
PART I: PROCEDURES APPLICABLE TO ALL NOTES
ISSUE DATE
Each Note will be dated the date of its authentication. Each Note will
also bear an original issue date (the "Issue Date") which, with respect to
any such Note (or portion thereof), shall mean the date of its original
issuance and shall be specified therein. The Issue Date will remain the same
for all Notes subsequently issued upon transfer, exchange or substitution of
a Note, regardless of their dates of authentication.
PRICE TO PUBLIC
Except as otherwise specified in a Pricing Supplement, each Note will be
issued at 100% of principal amount.
MATURITIES
Each Note will mature on a date, selected by the purchaser and agreed to
by the Issuer, which will be at least nine months but not more than 40 years
after its Issue Date.
INTEREST PAYMENTS
Interest on each interest-bearing Note will be calculated and paid in the
manner described in such Note and in the Prospectus Supplement and the
applicable Pricing Supplement. Unless otherwise set forth therein, interest
on Fixed Rate Notes (including interest for partial periods) will be
calculated on the basis of a 360-day year of twelve 30-day months and will
not accrue on the 31st day of any month. Interest on Floating Rate Notes,
except as otherwise set forth therein, will be calculated on the basis of
actual days elapsed and a year of 360 days, except that
C-2
in the case of a Floating Rate Note for which the Base Rate is the Treasury
Rate, interest will be calculated on the basis of the actual number of days
in the year.
On the fifth Business Day immediately preceding each Interest Payment
Date, the Trustee will furnish the Issuer with the total amount of interest
payments to be made on such Interest Payment Date. The Trustee will provide
monthly, to the Issuer's Finance Division, a list of the principal and any
premium and interest to be paid on Notes maturing in the next succeeding
month. The Trustee will assume responsibility for withholding taxes on
interest paid as required by law.
REDEMPTION/REPAYMENT
If indicated in the applicable Pricing Supplement, the Notes of a
particular tenor will be subject to redemption in whole or in part (subject
to applicable minimum denominations), at the option of the Issuer on and
after an initial redemption date as set forth in the applicable Pricing
Supplement and in the applicable Note. The redemption price will be set
forth in the applicable Pricing Supplement and in the applicable Note.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Issuer and the Agents will discuss from time to time the rates to be
borne by the Notes that may be sold as a result of the solicitation of offers
by the Agents. Once any Agent has recorded any indication of interest in
Notes upon certain terms, and communicated with the Issuer, if the Issuer
plans to accept an offer to purchase Notes upon such terms, it will prepare a
Pricing Supplement to the Prospectus, as then amended or supplemented,
reflecting the terms of such Notes and, after approval from the Agents, will
arrange to have the Pricing Supplement filed electronically with the
Securities and Exchange Commission (the "Commission") pursuant to Rule 424(b)
under the Act. The Issuer will supply at least 10 copies of the Prospectus,
as then amended or supplemented, and bearing such Pricing Supplement, to the
Agent who presented the offer (the "Presenting Agent") and will provide one
copy thereof to the Trustee by facsimile transmission. No settlements with
respect to Notes upon such terms may occur prior to such transmitting or
filing and the Agents will not, prior to such transmitting or filing, mail
confirmations to customers who have offered to purchase Notes upon such
terms. After such transmitting or filing, sales, mailing of confirmations
and settlements may occur with respect to Notes upon such terms, subject to
the provisions of "Delivery of Prospectus" below.
If the Issuer decides to post rates and a decision has been reached to
change interest rates, the Issuer shall promptly notify each Agent. Each
Agent will forthwith suspend solicitation of purchases. At that time, the
Agents will recommend and the Issuer will establish rates to be so "posted."
Following establishment of posted rates and prior to the transmitting or
filing described in the preceding paragraph, the Agents may only record
indications of interest in purchasing Notes at the posted rates. Once any
Agent has recorded any indication of interest in Notes at the posted rates
and communicated with the Issuer, if the Issuer plans to accept an offer at
the posted rates, it will prepare a Pricing Supplement reflecting such posted
rates, and after approval from
C-3
the Agents, arrange to have the Pricing Supplement filed electronically with
the Commission and will supply at least 10 copies of the Prospectus, as then
amended or supplemented, and bearing such Pricing Supplement, to the
Presenting Agent. No settlements at the posted rates may occur prior to such
transmitting or filing and the agents will not, prior to such transmitting or
filing, mail confirmations to customers who have offered to purchase Notes at
the posted rates. After such transmitting or filing, sales, mailing of
confirmations and settlements may resume, subject to the provisions of
"Delivery of Prospectus, below.
Outdated Pricing Supplements, and copies of the Prospectus to which they
are attached (other than those retained for files), will be destroyed.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
As provided in the Distribution Agreement, the Issuer may instruct the
Agents to suspend solicitation of offers to purchase at any time, and upon
receipt of at least one Business Day's prior notice from the Issuer, the
Agents will each forthwith suspend solicitation until such time as the Issuer
has advised it that solicitation of offers to purchase may be resumed.
If the Agents receive the notice from the Issuer contemplated by the
second paragraph of Section 2(b) or by 3(c) of the Distribution Agreement,
they will promptly suspend solicitation and will only resume solicitation as
provided in the Distribution Agreement. If the Issuer is required, pursuant
to Section 3(c) of the Distribution Agreement, to prepare an amendment or
supplement, it will promptly furnish each Agent with the proposed amendment
or supplement; if the Issuer decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes, it will promptly advise
each Agent and will furnish each Agent with the proposed amendment or
supplement in accordance with the terms of the Distribution Agreement. The
Issuer will file such amendment or supplement with the Commission, provide
the Agents and the Trustee with copies of any such amendment or supplement,
confirm to the Agents that such amendment or supplement has been filed with
the Commission and advise the Agents that solicitation may be resumed.
Any such suspension shall not affect the Issuer's obligations under the
Distribution Agreement; and in the event that at the time the Issuer suspends
solicitation of offers to purchase there shall be any offers already accepted
by the Issuer outstanding for settlement, the Issuer will have the sole
responsibility for fulfilling such obligations. The Issuer will in addition
promptly advise the Agents and the Trustee if such offers are not to be
settled and if copies of the Prospectus as in effect at the time of the
suspension may not be delivered in connection with the settlement of such
offers.
C-4
ACCEPTANCE AND REJECTION OF OFFERS
Each Agent will promptly advise the Issuer, at its option orally or in
writing, of each reasonable offer to purchase Notes received by it, other
than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, without notice to the Issuer, reject any offer received
by it, in whole or in part. The Issuer will have the sole right to accept
offers to purchase Notes and may reject any such offer, in whole or in part.
If the Issuer accepts or rejects an offer, in whole or in part, the Issuer
will promptly so notify the Presenting Agent.
CONFIRMATION
For each accepted offer, the Presenting Agent will issue a confirmation
to the purchaser, with a separate confirmation to the Issuer's Finance
Division, setting forth the Purchase Information (as defined under II below
with respect to Certificated Notes and III below with respect to Book-Entry
Notes) and delivery and payment instructions; PROVIDED, HOWEVER, that, in the
case of the confirmation issued to the purchaser, no confirmation shall be
delivered to the purchaser prior to the delivery of the Prospectus referred
to below.
DETERMINATION OF SETTLEMENT DATE
The receipt of immediately available funds by the Issuer in payment for a
Note and (i) in the case of Certificated Notes, the authentication and
issuance of such Note and (ii) in the case of Book-Entry Notes, entry by the
Presenting Agent of an SDFS (defined in III below) deliver order through
DTC's Participant Terminal System to credit such Note to the account of a
Participant purchasing, or acting for the purchaser of, such Note, shall,
with respect to such Note, constitute "settlement." All offers accepted by
the Issuer will be settled on the third Business Day next succeeding the date
of acceptance in accordance with the "Details of Settlement" set forth below,
unless otherwise agreed by the purchaser and the Issuer. The settlement date
shall be specified upon receipt of an offer to purchase. Prior to 11:00
a.m., New York City time, on the settlement date, the Issuer will instruct
the Trustee to authenticate and deliver the Notes no later than 2:15 p.m.,
New York City time, on that date.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or supplemented on the
date of delivery thereof (except as provided below) must be delivered to a
purchaser prior to or together with the earlier of the delivery of (i) the
written confirmation provided for above, and (ii) any Note purchased by such
purchaser. (For this purpose, entry of an SDFS deliver order through DTC's
Participant Terminal System to credit a Note to the account of a Participant
purchasing, or acting for the purchaser of, a Note shall be deemed to
constitute delivery of such Note.) Subject to the foregoing, it is
anticipated that delivery of the Prospectus, confirmation and Notes to the
purchaser will be made simultaneously at settlement. The Issuer shall ensure
that the Presenting Agent receives copies of the Prospectus and each
amendment or supplement thereto (including appropriate Pricing Supplements)
in such quantities and within such time limits as will
C-5
enable the Presenting Agent to deliver such confirmation or Note to a
purchaser as contemplated by these procedures and in compliance with the
first sentence of this paragraph. If, since the date of acceptance of a
purchaser's offer, the Prospectus shall have been supplemented solely to
reflect any sale of Notes on terms different from those agreed to between the
Issuer and such purchaser or a change in posted rates not applicable to such
purchaser, such purchaser shall not receive the Prospectus as supplemented by
such new supplement, but shall receive the Prospectus as supplemented to
reflect the terms of the Notes being purchased by such purchaser and
otherwise as most recently amended or supplemented on the date of delivery of
the Prospectus.
AUTHENTICITY OF SIGNATURES
The Issuer will cause the Trustee to furnish the Agents from time to time
with the specimen signatures of each of the Trustee's officers, employees or
agents who have been authorized by the Trustee to authenticate Notes, but no
Agent will have any obligation or liability to the Issuer or the Trustee in
respect of the authenticity of the signature of any officer, employee or
agent of the Issuer or the Trustee on any Note or the Global Note (as defined
in Part III).
ADVERTISING EXPENSES
The Issuer will determine with the Agents the amount of advertising that
may be appropriate in offering the Notes. Advertising expenses will be paid
by the Issuer.
BUSINESS DAY; LONDON MARKET DAY
"Business Day" means any day which is not a Saturday or Sunday and is not
a day on which banking institutions are generally authorized or obligated by
law or executive order to close in The City of New York and, with respect to
LIBOR notes, a London Market Day. "London Market Day" means any day on which
dealings in deposits in U.S. Dollars are transacted in the London interbank
market.
TRUSTEE NOT TO RISK FUNDS
Nothing herein shall be deemed to require the Trustee to risk or expend
its own funds in connection with any payment made to the Issuer, the Agent,
DTC or any Noteholder, it being understood by all parties that payments made
by the Trustee to the Issuer, the Agent, DTC or any holder of a Note shall be
made only to the extent that funds are provided to the Trustee for such
purpose.
C-6
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
FORM AND DENOMINATIONS
The Certificated Notes shall be issued only in fully registered form in
denominations of $10,000 and integral multiples of $1,000 in excess thereof.
TRANSFERS AND EXCHANGES
A Certificated Note may be presented for transfer or exchange at the
principal corporate trust office of the Trustee in The City of New York.
Certificated Notes will be exchangeable for other Certificated Notes of any
authorized denominations and of like tenor and in a like aggregate principal
amount, upon surrender of the Certificated Notes to be exchanged at the
corporate trust office of the Trustee. Certificated Notes will not be
exchangeable for Book-Entry Notes.
PAYMENT AT MATURITY
Upon presentation of each Certificated Note at Maturity, the Trustee (or
a duly authorized Paying Agent) will pay the principal amount thereof,
together with any premium and accrued interest due at Maturity. Such payment
will be made in immediately available funds, PROVIDED, that the Certificated
Note is presented in time for the Paying Agent to make payment in such funds
in accordance with its normal procedures. The Issuer will provide the
Trustee (and any Paying Agent) with funds available for immediate use for
such purpose. Certificated Notes presented at Maturity will be canceled by
the Trustee as provided in the Indenture.
DETAILS FOR SETTLEMENT
For each offer for Certificated Notes accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer's Finance Division prior to
1:00 p.m., New York City time, on the Business Day preceding the settlement
date, by telephone, telex, facsimile transmission or other acceptable means,
the following information (the "Purchase Information"):
1. Exact name in which the Note or Notes are to be registered
("registered owner").
2. Exact address of registered owner and, if different, the address for
delivery, notices and payment of principal and any premium and
interest.
3. Taxpayer identification number of registered owner.
4. Principal amount of each Note in authorized denominations to be
delivered to registered owner.
5. In the case of Fixed Rate Notes, the interest rate of each Note; in
the case of Floating Rate Notes, the interest rate formula, the
Spread or Spread Multiplier (if
C-7
any), the maximum or minimum interest rate limitation (if any), the
Calculation Agent, the Calculation Dates, the Initial Interest Rate,
the Interest Payment Dates, the Regular Record Dates, the Index
Maturity, the Interest Determination Dates and the Interest Reset
Dates, in each case, to the extent applicable with respect to each
Note.
6. Stated Maturity of each Note.
7. Redemption and/or repayment provisions, if any, of each Note,
including:
a. Initial Redemption Date;
b. Initial Redemption Price (% of par);
c. Amount (% of par) of decline and date;
d. Redemption Limitation Date.
8. Trade date of each Note.
9. Settlement date (Issue Date) of each Note.
10. Presenting Agent's commission (to be paid in the form of a discount
from the proceeds remitted to the Issuer upon settlement).
11. Price.
12. Any additional applicable terms of each Note.
The Issue Date of, and the settlement date for, Certificated Notes will
be the same. Before accepting any offer to purchase Certificated Notes to be
settled in less than three Business Days, the Issuer shall verify that the
Trustee will have adequate time to prepare and authenticate the Notes.
Immediately after receiving the details for each offer for Certificated
Notes from the Presenting Agent, the Issuer will, after recording the details
and any necessary calculations, communicate the Purchase Information by
telephone, telex, facsimile transmission or other acceptable means, to the
Trustee. Each such instruction given by the Issuer to the Trustee shall
constitute a continuing representation and warranty by the Issuer to the
Trustee and the Agents that (i) the issuance and delivery of such Notes have
been duly and validly authorized by the issuer and (ii) such Notes, when
completed, authenticated and delivered, shall constitute the valid and
legally binding obligation of the Issuer. The Issuer will assign to and
enter on each Note a transaction number.
C-8
The Issuer will deliver to the Trustee a Certificated Note. The Trustee
will complete such Certificated Note and will authenticate such Certificated
Note and deliver it (with the confirmation) to such Agent, and such Agent
will acknowledge receipt of the Note in writing delivered to the Trustee.
SETTLEMENT: NOTE DELIVERIES AND CASH PAYMENT
The Issuer will deliver to the Trustee at the commencement of the program
and from time to time thereafter a supply of duly executed Certificated Notes
with preprinted control numbers adequate to implement the program. Upon the
receipt of appropriate documentation and instructions from the Issuer in
accordance with the applicable Officers' Certificate and verification
thereof, the Trustee will cause the Certificated Notes to be completed and
authenticated and hold the Certificated Notes for delivery against payment.
The Trustee will deliver the Certificated Notes, in accordance with
instructions from the Issuer, to the Presenting Agent, as the Issuer's agent,
for the benefit of the purchaser only against receipt. The Presenting Agent
will acknowledge receipt of the Notes through a broker's receipt. Delivery
of the Certificated Notes by the Trustee will be made only against such
acknowledgment of receipt from the Presenting Agent. Upon the Presenting
Agent's determination that such Note has been authenticated, delivered and
completed as aforesaid, the Presenting Agent will make, or cause to be made,
payment to the Issuer at such account of the Issuer as it may specify in
writing, in immediately available funds, of an amount equal to the principal
amount of such Notes, less the applicable commission. If the Presenting
Agent in any instance advances its own funds, the Issuer shall not use any of
the proceeds of such sale to acquire securities.
The Presenting Agent, as the Issuer's agent, will deliver the Notes (with
the written confirmation provided for above) to the purchaser thereof against
payment therefor by such purchaser in immediately available funds. Delivery
of any confirmation or Note will be made in compliance with "Delivery of
Prospectus" in Part I above.
FAILS
In the event that a purchaser shall fail to accept delivery of and make
payment for a Certificated Note on the settlement date, the Presenting Agent
will notify the Trustee and the Issuer, by telephone, confirmed in writing.
If such Certificated Note has been delivered to the Presenting Agent, as the
Issuer's agent, the Presenting Agent stall return such Note to the Trustee.
If funds have been advanced for the purchase of such Note, the Trustee will,
immediately upon receipt of such Note, debit the account of the Issuer for
the amount so advanced and the Trustee shall refund the payment previously
made by the Presenting Agent in immediately available funds. Such payments,
will be made on the settlement date, if possible, and in any event not later
than the Business Day following the settlement date. If the fail shall have
occurred for any reason other than the failure of the Presenting Agent to
provide the Purchase Information to the Issuer or to provide a confirmation
to the purchaser, the Issuer will reimburse the Presenting
C-9
Agent on an equitable basis for its loss of the use of funds during the
period when the funds were credited to the account of the Issuer.
Immediately upon receipt of the Certificated Note in respect of which the
fail occurred, the Trustee will make appropriate entries in its records to
reflect the fact that the Note was never issued and the Note will be canceled
and disposed of as provided in the Indenture.
PART III: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions
described below, in accordance with its obligations under a Letter of
Representations (the "Letter") from the Issuer and the Trustee to DTC dated
as of March __, 1997 and a Medium-Term Note Certificate Agreement between
the Trustee and DTC dated as of October 21, 1988 and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System
("SDFS").
FORM, DENOMINATIONS AND REGISTRATION
All Book-Entry Notes of the same tenor and having the same Issue Date,
will be represented initially by a single note (a "Global Note") in fully
registered form without coupons. Book-Entry Notes will represent Notes
denominated in U.S. dollars. Global Notes will be issued in denominations of
$10,000 and integral multiples of $1,000 in excess thereof. Each Global Note
will be registered in the name of Cede & Co., as nominee for DTC, on the
Security Register maintained under the Indenture. The beneficial owner of a
Book-Entry Note (or one or more indirect participants in DTC designated by
such owner) will designate one or more participants in DTC (with respect to
such Notes, the "Participants") to act as agent or agents for such owner in
connection with the book-entry system maintained by DTC, and DTC will record
in book-entry form, in accordance with instructions provided by such
Participants, a credit balance with respect to such Note in the account of
such Participants. The ownership interest of such beneficial owner in such
Note will be recorded through the records of such Participants or through the
separate records of such Participants and one or more indirect participants
in DTC.
CUSIP NUMBERS
The Issuer has arranged with the CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP Service Bureau") for the reservation of a
series of CUSIP numbers (including tranche numbers), such series consisting
of approximately 900 CUSIP numbers and relating to Global Notes representing
Book-Entry Notes. The Issuer has obtained from the CUSIP Service Bureau a
written list of such reserved CUSIP numbers and has delivered it to the
Trustee and DTC. The Trustee will assign CUSIP numbers serially to Global
Notes as described below under "Details for Settlement." DTC will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has
assigned to Global Notes. The Trustee will notify the Issuer at the time
when fewer than 100 of the reserved CUSIP numbers remain unassigned to the
Global
C-10
Notes; and the Issuer will reserve an additional 900 CUSIP numbers for
assignment to Global Notes representing Book-Entry Notes. Upon obtaining
such additional CUSIP numbers, the Issuer shall deliver a list of such
additional CUSIP numbers to the Trustee and DTC.
TRANSFERS; AND EXCHANGES FOR THE PURPOSE OF CONSOLIDATION
Transfers of a Book-Entry Note will be accomplished by book entries made
by DTC and, in turn, by Participants (and, in certain cases, one or more
indirect participants in DTC) acting on behalf of beneficial transferors and
transferees of such Note.
The Trustee may upon notice to the Issuer deliver to DTC and the CUSIP
Service Bureau at any time a written notice (a copy of which shall be
attached to the Global Note resulting from such exchange) specifying (i) the
CUSIP numbers of two or more outstanding Global Notes that represent
Book-Entry Notes of the same tenor and having the same Issue Date, and for
which interest (if any) has been paid to the same date, (ii) a date occurring
at least 30 days after such written notice is delivered and at least 30 days
before the next Interest Payment Date (if any) for such Notes, on which such
Global Notes shall be exchanged for a single replacement Global Note and
(iii) a new CUSIP number to be assigned to such replacement Global Note.
Upon receipt of such a notice, DTC will send to its Participants (including
the Trustee) a written reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange date, the Trustee
will deliver to the CUSIP Service Bureau a written notice setting forth such
exchange date and the new CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Notes to be exchanged will no longer be
valid. On the specified exchange date, the Trustee will exchange such Global
Notes for a single Global Note bearing the new CUSIP number and the CUSIP
numbers of the exchanged Global Notes will, in accordance with CUSIP Service
Bureau procedures, be canceled and not immediately reassigned.
NOTICE OF INTEREST PAYMENT DATES AND REGULAR RECORD DATES
To the extent then known, on the first Business Day of March, June,
September and December of each year, the Trustee will deliver to the Issuer
and DTC a written list of Record Dates and Interest Payment Dates that will
occur with respect to Floating Rate Book-Entry Notes during the six-month
period beginning on such first Business Day.
C-11
PAYMENTS OF PRINCIPAL AND INTEREST
(a) PAYMENTS OF INTEREST ONLY. Promptly after each Regular Record Date,
the Trustee will deliver to the Issuer and DTC a written notice specifying by
CUSIP number the amount of interest to be paid on each Global Note on the
following Interest Payment Date (other than an Interest Payment Date
coinciding with Maturity) and the total of such amounts. The Issuer will
confirm with the Trustee the amount payable on each Global Note on such
Interest Payment Date. DTC will confirm the amount payable on each Global
Note on such Interest Payment Date by reference to the daily or weekly bond
reports published by Standard & Poor's Corporation. The Issuer will pay to
the Trustee the total amount of interest due on such Interest Payment Date
(other than at Maturity), and the Trustee will pay such amount to DTC at
times and in the manner set forth below under "Manner of Payment."
(b) PAYMENTS AT STATED MATURITY. On or about the first Business Day of
each month, the Trustee will deliver to the Issuer and DTC a written list of
principal and interest to be paid on each Global Note maturing in the
following month. The Issuer, the Trustee and DTC will confirm the amounts of
such principal and interest payments with respect to each such Global Note on
or about the third Business Day preceding the Stated Maturity of such Global
Note. The Issuer will pay to the Trustee, as the paying agent, the principal
amount of such Global Note, together with interest due at such Stated
Maturity. Upon surrender of a Global Note, the Trustee will pay such amounts
to DTC at the times and in the manner set forth below under "Manner of
Payment." If any Stated Maturity of a Global Note representing Book-Entry
Notes is not a Business Day, the payment due on such day shall be made on the
next succeeding Business Day and no interest shall accrue on such payment for
the period from and after such Stated Maturity. Promptly after payment to
DTC of the principal and any interest due at the Stated Maturity of such
Global Note, the Trustee will cancel such Global Note in accordance with the
terms of the Indenture.
(c) PAYMENT UPON REDEMPTION. The Trustee will comply with the terms of
the Letter with regard to redemptions or repayments of the Book-Entry Notes.
In the case of Book-Entry Notes stated by their terms to be redeemable prior
to Stated Maturity, at least 60 calendar days before the date fixed for
redemption (the "Redemption Date"), the Issuer shall notify the Trustee of
the Issuer's election to redeem such Book-Entry Notes in whole or in part and
the principal amount of such Book-Entry Notes to be so redeemed. At least 30
calendar days but not more than 60 calendar days prior to the Redemption
Date, the Trustee shall notify DTC of the Issuer's election to redeem such
Book-Entry Notes. The Trustee shall notify the Issuer and DTC of the CUSIP
numbers of the particular Book-Entry Notes to be redeemed either in whole or
in part. The Issuer, the Trustee and DTC will confirm the amounts of such
principal and any premium and interest payable with respect to each such
Book-Entry Note on or about the third Business Day preceding the Redemption
Date of such Book-Entry Note. The Issuer will pay the Trustee, in accordance
with the terms of the Indenture, the amount necessary to redeem each such
Book-Entry Note or the applicable portion of each such Book-Entry Note. The
Trustee will pay such amount to DTC at the times and in the manner set forth
herein. Promptly after payment to DTC of the amount due on the Redemption
Date for such Book-Entry Note, the Trustee shall cancel
C-12
any such Book-Entry Note redeemed in whole in accordance with the Indenture.
If a Global Note is to be redeemed in part, the Trustee will cancel such
Global Note and issue a Global Note which shall represent the remaining
portion of such Global Note and shall bear the CUSIP number of the canceled
Global Note.
(d) MANNER OF PAYMENT. The total amount of any principal and interest
due on Global Notes on any Interest Payment Date or at Maturity shall be paid
by the Issuer to the Trustee in immediately available funds on such date.
The Issuer will make such payment on such Global Notes by wire transfer to
the Trustee. The Issuer will confirm instructions regarding payment in
writing to the Trustee. Upon receipt of funds from the Issuer, on each date
of Maturity of a Book-Entry Note or as soon as possible thereafter, the
Trustee will pay by separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to an account at the
Federal Reserve Bank of New York previously specified by DTC in funds
available for immediate use by DTC, each payment of principal (together with
interest thereon) due at Maturity on Book-Entry Notes. On each interest
Payment Date, the interest payment shall be made to DTC in same day funds in
accordance with existing arrangements between the Trustee and DTC.
Thereafter, on each such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in funds available for
immediate use to the respective Participants in whose names the Book-Entry
Notes represented by such Global Notes are recorded in the book-entry system
maintained by DTC. NEITHER THE ISSUER NOR THE TRUSTEE SHALL HAVE ANY DIRECT
RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH PARTICIPANTS OF
THE PRINCIPAL OF AND ANY PREMIUM AND INTEREST ON THE BOOK-ENTRY NOTES.
(e) WITHHOLDING TAXES. The amount of any taxes required under
applicable law to be withheld from any interest payment on a Book-Entry Note
will be determined and withheld by the Participant, indirect participant in
DTC or other person responsible for forwarding payments and material directly
to the beneficial owner of such Note.
DETAILS FOR SETTLEMENT
For each offer for Book-Entry Notes accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer's Finance Division prior to
11:00 a.m., New York City time, on the first Business Day after the sale date
(or on the sale date if such sale is to be settled within one Business Day),
by telephone, telex, facsimile transmission or other acceptable means, the
following information (the "Purchase Information"):
1. Exact name in which the Notes are to be registered ("registered
owner").
2. Exact address of registered owner and, if different, the address for
delivery, notices and payment of principal and any premium and
interest.
3. Taxpayer identification number of registered owner.
C-13
4. Principal amount of the Notes.
5. Stated Maturity of the Notes.
6. In the case of Fixed Rate Notes, the interest rate of the Notes; in
the case of Floating Rate Notes, the interest rate formula, the
Spread or Spread Multiplier (if any), the maximum or minimum
interest rate limitation (if any), the Calculation Agent, the
Calculation Dates, the Initial Interest Rate, the Interest Payment
Dates, the Regular Record Dates, the Index Maturity, the Interest
Determination Dates and the Interest Reset Dates, in each case, to
the extent applicable with respect to the Notes.
7. Redemption and/or repayment provisions, if any, of the Notes,
including
a. Initial Redemption Date;
b. Initial Redemption Price (% of par);
c. Amount (% of par) of decline and date;
d. Redemption Limitation Date.
8. Trade date of the Notes.
9. Settlement date (Issue Date) of the Notes.
10. Presenting Agent's commission (to be paid in the form of a discount
from the proceeds remitted to the issuer upon settlement).
11. Price.
12. Any additional applicable terms of the Notes.
The Issue Date of, and the settlement date for, Book-Entry Notes will be
the same. Before accepting any offer to purchase Book-Entry Notes to be
settled in less than three Business Days, the Issuer shall verify that the
Trustee will have adequate time to prepare and authenticate the Global Notes.
If the initial interest rate for a Floating Rate Book-Entry Note has not
been determined at the time that the foregoing procedure is completed, the
procedures described in the following two paragraphs shall be completed as
soon as such rate has been determined but no later than 12:00 Noon and 2:00
p.m., as the case may be, on the Business Day before the settlement date.
C-14
Immediately after receiving the details for each offer for Book-Entry
Notes from the Presenting Agent and in any event no later than 12:00 Noon on
the first Business Day after the sale date (or on the sale date if such sale
is to be settled within one Business Day), the Issuer will, after recording
the details and any necessary calculations, communicate the Purchase
Information by telephone, telex, facsimile transmission or other acceptable
means, to the Trustee. Each such instruction given by the Issuer to the
Trustee shall constitute a continuing representation and warranty by the
Issuer to the Trustee and the Agents that (i) the issuance and delivery of
such Notes have been duly and validly authorized by the Issuer and (ii) such
Notes, when completed, authenticated and delivered, shall constitute the
valid and legally binding obligations of the Issuer.
Immediately after receiving the Purchase Information from the Issuer and
in any event no later than 2:00 p.m. on the First Business Day after the sale
date (or on the sale date if such sale is to be settled within one Business
Day), the Trustee will assign a CUSIP number to the Global Note representing
such Book-Entry Note and will telephone the Issuer and advise the Issuer of
such CUSIP number and, as soon thereafter as practicable, the Issuer shall
notify the Agent of such CUSIP number. The Trustee will enter a pending
deposit message through DTC's Participant Terminal System, providing the
following settlement information to DTC (which shall route such information
to Standard & Poor's Corporation) and the relevant Agent:
1. The applicable Purchase Information.
2. Initial Interest Payment Date for each Book-Entry Note, number of
days by which such date succeeds the Regular Record Date which shall
be the Regular Record Date (as defined in the Note), and, if known,
the amount of interest payable on such Interest Payment Date per
$1,000 principal amount of Book-Entry Notes.
3. Identification as either a Fixed Rate Note or a Floating Rate Note.
4. CUSIP number of the Global Note representing such Note.
5. Whether such Global Note will represent any other Book-Entry Note (to
the extent known at such time).
6. Interest payment periods.
7. Numbers of the participant accounts maintained by DTC on behalf of
the Trustee and the Agents.
Standard & Poor's Corporation will use the information received in the
pending deposit message to include the amount of any interest payable and
certain other information regarding the related Global Note in the
appropriate daily or weekly bond report published by Standard & Poor's
Corporation.
C-15
SETTLEMENT; GLOBAL NOTE DELIVERY AND CASH PAYMENT
The Issuer will deliver to the Trustee at the commencement of the program
and from time to time thereafter a supply of duly executed Global Notes with
preprinted control numbers adequate to implement the program. Upon the
receipt of appropriate documentation and instructions from the Issuer in
accordance with the applicable Officers' Certificate and verification
thereof, the Trustee will cause the Global Note to be completed and
authenticated and hold the Global Note for delivery against payment.
Prior to 10:00 a.m. on the Settlement Date, DTC will credit such Note to
the Trustee's participant account at DTC. At or prior to 2:00 p.m. on the
Settlement Date, the Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such Note to the Presenting Agent's
participant account and (ii) debit the Presenting Agent's settlement account
and credit the Trustee's settlement account for an amount equal to the price
of such Note less such Agent's commission (in accordance with SDFS operating
procedures in effect on the Settlement Date). The entry of such a deliver
order shall constitute a representation and warranty by the Trustee to DTC
that (i) the Global Note representing such Note has been executed, delivered
and authenticated and (ii) the Trustee is holding such Global Note pursuant
to the Medium Term Note Certificate Agreement between the Trustee and DTC.
Simultaneously with the giving of such instructions by the Trustee, the
Presenting Agent will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such Note to such Agent's
participant account and credit such Note to the Participant accounts of the
Participants with respect to such Note and (ii) to debit the settlement
accounts of such Participants and credit the settlement account of such Agent
for an amount equal to the price of such Note (in accordance with SDFS
operating procedures in effect on the settlement date).
Transfers of funds are subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified in
the SDFS operating procedures in effect on the settlement date.
The Trustee, upon confirming receipt of such funds, will wire transfer
the amount transferred to the Trustee, in funds available for immediate use,
for the account of Sierra Pacific Power Company, to account no. 470017880 at
Bank of America, Reno, Nevada (ABA No. 000000000).
FAILS
If settlement of a Book-Entry Note is rescheduled or canceled, the Issuer
shall notify the Trustee, and upon receipt of such notice, the Trustee will
deliver to DTC, through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled settlement date.
C-16
If the Trustee has not entered an SDFS deliver order with respect to a
Book-Entry Note, then upon written request (which may be evidenced by
telecopy transmission) of the Issuer, the Trustee shall deliver to DTC,
through DTC's Participant Terminal System, as soon as practicable, but no
later than 2:00 p.m. on any Business Day, a withdrawal message instructing
DTC to debit such Note to the Trustee's participant account. DTC will
process the withdrawal message, provided that the Trustee's participant
account contains a principal amount of the Global Note representing such Note
that is at least equal to the principal amount to be debited. If withdrawal
messages are processed with respect to all the Book-Entry Notes represented
by a Global Note, the Trustee will mark such Global Note "canceled" in
accordance with the Indenture, and make appropriate entries in the Trustee's
records. The CUSIP number assigned to such Global Note shall, in accordance
with CUSIP Service Bureau procedures, be canceled and not immediately
reassigned. If withdrawal messages are processed with respect to one or
more, but not all, of the Book-Entry Notes represented by a Global Note, the
Trustee will exchange such Global Note for two Global Notes, one of which
shall represent such Book-Entry Note or Notes and shall be canceled
immediately after issuance and the other of which shall represent the
remaining Book-Entry Notes previously represented by the surrendered Global
Note and shall bear the CUSIP number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in DTC, acting on behalf of
such purchaser), such participants and, in turn, the Presenting Agent may
enter an SDFS deliver order through DTC's Participant Terminal System
debiting such Note to such Agent's participant account and crediting such
Note free to the participant account of the Trustee and shall notify the
Trustee and the issuer thereof. Thereafter, the Trustee (i) will immediately
notify the Issuer, once the Trustee has confirmed that such Note has been
credited to its participant account, and the Issuer shall immediately
transfer by Xxxxxxx (in immediately available funds) to the Presenting Agent
an amount equal to the price of such Note which was previously sent by wire
transfer to the account of the Issuer and (ii) the Trustee will deliver the
withdrawal message and take the related actions described in the preceding
paragraph. Such debits and credits will be made on the Settlement Date, if
possible, and in any event no later than 5:00 p.m. on the following Business
Day. If the fail shall have occurred for any reason other than failure of
the Presenting Agent to provide the Purchase Information to the Issuer or to
provide a confirmation to the purchaser, the Issuer will reimburse the
Presenting Agent on an equitable basis for its loss of the use of funds
during the period when the funds were credited to the account of the Issuer.
Notwithstanding the foregoing, upon any failure to settle with respect to
a Book-Entry Note, DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Notes to have
been represented by a Global Note, the Trustee will provide for the
authentication and issuance of a Global Note representing the other
Book-Entry Notes to have been represented by such Global Note and will make
appropriate entries in its records.
C-17
EXHIBIT D
---------
[LETTERHEAD OF XXXXXX, XXXX & XXXXXXX]
February 21, 1997
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Bankers Trust Company
0 Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Re: Sierra Pacific Power Company (the "Company")
$35,000,000 of Collateralized Medium-Term Notes, Series D
---------------------------------------------------------
Gentlemen:
This opinion is delivered to you pursuant to Section 5(e) of the
Distribution Agreement dated as of February 21, 1997 (the "Distribution
Agreement") between each of you and the Company relating to the issuance and
sale from time to time of Collateralized Medium-Term Notes, Series D, in an
initial aggregate principal amount of $35,000,000 (the "Notes"). The Notes
are to be issued pursuant to a Collateral Trust Indenture dated as of June 1,
1992 (the "Indenture") between the Company and Bankers Trust Company, as
Trustee (the "Indenture Trustee"), as supplemented by a Fourth Supplemental
Indenture dated as of February 1, 1997 between the Company and the Indenture
Trustee (the "Fourth Supplemental Indenture") and to be secured by the
Company's first mortgage bonds to be issued pursuant to an Indenture of
Mortgage dated as of December 1, 1940, from the Company's predecessor to The
New England Trust Company and Xxx X. Xxxxxx (State
D-1
February 21,1997
Page 2
Street Bank and Trust Company and Xxxxxx X. Xxxxxxx, respectively, by
succession), as Trustees, as heretofore supplemented and modified and assumed
by the Company (collectively, the "Mortgage Indenture"). This opinion is
being delivered on the Commencement Date referred to in the Distribution
Agreement (the "Commencement Date").
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Distribution Agreement.
In connection with rendering this opinion, we have examined such
corporate records, certificates and other documents as we have considered
necessary for the purposes of this opinion, including:
(a) A certificate of recent date of the Secretary of State of Nevada
as to the corporate existence and good standing of the Company as a
Nevada corporation; and a certificate of recent date of the Secretary of
State of California as to the qualification and good standing of the
Company as a foreign corporation in that State;
(b) The Restated Articles of Incorporation of the Company, and all
amendments thereto;
(c) The By-Laws of the Company as now in effect;
(d) Resolutions adopted by the Board of Directors of the Company on
November 13, 1996, relating to the issuance and sale of the Notes and
matters related thereto;
(e) The Indenture, the Fourth Supplemental Indenture and the proposed
form of fixed-rate note to be issued under the Fourth Supplemental
Indenture;
(f) The Mortgage Indenture, including the Thirty-fifth Supplemental
Indenture thereto dated as of February 1, 1997 (the "Thirty-fifth
Supplemental Indenture");
(g) The applications of the Company to the PSCN and the CPUC with
respect to the issuance and sale of the Notes and related matters, and
the order of the PSCN thereon dated October 19, 1995 and the opinion of
the CPUC thereon dated August 11, 1995;
(h) The Registration Statement and all exhibits thereto, as filed with
the Commission on November 27, 1996, and as amended by a Pre-Effective
Amendment No. 1 filed with the Commission on December 18, 1996, and
declared effective by the Commission on December 20, 1996;
D-2
February 21,1997
Page 3
(i) The documents incorporated by reference in the Prospectus (the
"Incorporated Documents");
(j) The First Mortgage Bond of the NN Series issued under the Mortgage
Indenture in connection with the Notes (the "Bond");
(k) Such other documents as are to be delivered on the Commencement
Date, including certificates of officers of the Company.
In such examination, we have assumed the genuineness of all signatures
other than the signatures of the Company, the authenticity of all documents
submitted to us as originals, the conformity to the original documents of all
documents submitted to us as copies and the authenticity of the originals of
such latter documents. As to any facts material to our opinion, we have,
when relevant facts were not independently established, relied upon the
aforesaid records, certificates and documents.
Although we have examined the Restated Articles of Incorporation, as
amended, of the Company, we have ourselves made no independent examination as
to the organization, existence or standing of the Company, its authority to
do business in California, its titles to properties, the lien of the Mortgage
Indenture, the recording of the Mortgage Indenture and the Thirty-fifth
Supplemental Indenture and matters of Nevada and California law affecting the
enforceability of the obligations of the Company in respect of the Notes, the
Indenture, the Fourth Supplemental Indenture, the Mortgage Indenture, the
Thirty-fifth Supplemental Indenture and the Mortgage Bonds, or the
jurisdiction and approvals of State regulatory commissions or requirements of
the laws of Nevada or California with respect to action by or documents
required to be filed with State officials. We have, therefore, in connection
with the opinions set forth below, relied with your consent as to all matters
governed by the laws of the State of Nevada, upon a letter of even date
herewith addressed to you by Xxxxxxxx and Xxxxx, and as to all matters
governed by the laws of the State of California, upon a letter of even date
herewith addressed to you by Xxxxxx & Xxxxx XXX, and, as to such matters, our
opinions are subject to all of the qualifications and assumptions set forth
in such letters. We refer you to said letters for the matters covered
thereby and believe that you and we are entitled to rely thereon.
We are not passing in any way upon any computations or financial
statements, including the notes or schedules thereto, or upon any other
financial or accounting information set forth or referred to in the
Registration Statement or the Incorporated Documents, and have not reviewed
the financial records or books of account of the Company.
D-3
February 21,1997
Page 4
Prior to November 27, 1996, we participated in conferences with officers
and other representatives of the Company and its accountants in which the
affairs of the Company and the contents of the Registration Statement and
Incorporated Documents were discussed at length. Subsequent to November 27,
1996, we made inquiries of certain officers of the Company and
representatives of its auditors as to whether there had been any material
change in the affairs of the Company since that date and we examined, among
other documents, those to be delivered on the Commencement Date. However,
there is no assurance that all possible material facts as to the Company were
disclosed at such conferences, in response to our inquiries, or in such
documents, and we have to a large extent relied upon the statements of
officers and other representatives of the Company as to the materiality of
those facts disclosed to us. Except with respect to the descriptions
specifically referred to in paragraphs (d) and (j), we are not passing upon
and do not assume any responsibility for the accuracy or completeness of the
statements contained in the Registration Statement or the Incorporated
Documents.
Based on the foregoing and, to the extent indicated above on said
opinions of other counsel for the Company, we are of the opinion that:
(a) The Company is a corporation duly organized and existing in good
standing under the laws of the State of Nevada, with corporate power and
authority to own its properties and conduct its business as described in
the Registration Statement; and the Company is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties;
(b) The Indenture and the Fourth Supplemental Indenture have been duly
authorized, executed and delivered by the Company and are duly qualified
under the Trust Indenture Act and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(c) The creation, issuance and sale of the Notes have been duly
authorized by the Company in conformity with the Indenture, and, when
the terms of a particular Debt Security and of its issuance and sale
have been duly authorized and established by all necessary corporate
action in conformity with the Indenture, and such Debt Security has been
duly completed, executed, authenticated and issued in accordance with
the Indenture and delivered against payment as contemplated by the
Distribution Agreement, such Debt Security will be entitled to the
benefits of the Indenture and will constitute a valid and legally
binding obligation of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer,
D-4
February 21,1997
Page 5
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, it being assumed
that (i) at the time of the issuance, sale and delivery of each Debt
Security the authorization of such series will not have been modified or
rescinded and there will not have occurred any change in law affecting
the validity, legally binding character or enforceability of such Debt
Security, and (ii) for purposes of this subparagraph (c), neither the
issuance, sale and delivery of any Debt Security, nor any of the terms
of such Debt Security, nor compliance by the Company with such terms,
will violate any applicable law, any agreement or instrument then
binding upon the Company or any restriction imposed by any court or
governmental body having jurisdiction over the Company, in each case
effected after the date hereof;
(d) The Registration Statement has become effective under the Act, the
Prospectus has been or will be transmitted by a means reasonably
calculated to result in filing with the Commission in conformity with
the provisions of Rule 424(b)(5) under the Act and no stop order
suspending the effectiveness of the registration statement or of any
part thereof has been issued and no proceedings for that purpose have
been instituted or, to the best of our knowledge are pending or
contemplated under the Act; and the registration statement relating to
the Registered Securities, as of its effective date, and the
Registration Statement and the Prospectus, as of the Commencement Date,
complied and complies as to form in all material respects with the
requirements of the Act, the Exchange Act, the Trust Indenture Act and
the rules and regulations under such Acts; we have no reason to believe
that such Registration Statement, as of its effective date, or the
Registration Statement, as of the Commencement Date, contained or
contains any untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of
the Commencement Date, contains or contained any untrue statement of a
material fact or omits or omitted to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the
descriptions and statements in the Prospectus and reviewed by us and
made on our authority as stated under the caption "Experts" are accurate
and fairly present the information required to be shown; and we do not
know of any legal or governmental proceedings required to be described
in the Registration Statement which are not described as required or of
any contracts or documents of a character required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement which are not described and filed as
required; provided, however, that we do not express any belief as to any
information contained in the Registration Statement, the Prospectus or
the Incorporated Documents which is specified therein to have been
obtained from The Depository Trust Company, or as to any
D-5
February 21,1997
Page 6
statements contained in the Statements of Eligibility (Form T-l) under
the Trust Indenture Act of the Trustee filed as an exhibit to the
Registration Statement;
(e) The Mortgage Indenture has been duly authorized, executed and
delivered by the Company and has been qualified under the Trust
Indenture Act. The Thirty-fifth Supplemental Indenture has been duly
authorized, executed and delivered by the Company. Each of the Mortgage
Indenture and the Thirty-fifth Supplemental Indenture is a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors' rights and
general equity principles;
(f) Upon the deposit of the Mortgage Bonds with the Trustee as the
basis for the issuance of the Notes, to the extent that such Mortgage
Bonds shall have been designated as Designated Mortgage Bonds, the
Mortgage Bonds shall be duly pledged to the Trustee, and the Indenture
will, upon payment for the Notes issued upon the basis of the Designated
Mortgage Bonds so deposited, constitute a valid first lien thereupon; no
registration, recording or filing of the Indenture (or notices or
financing statements in respect thereof) is required by law to make
effective and to maintain the lien on the Designated Mortgage Bonds so
deposited intended to be created by the Indenture;
(g) The Mortgage Bonds to be deposited with the Trustee and the
Designated Mortgage Bonds to be pledged with the Trustee as the basis
for the issuance of the Notes, have been duly authorized and, upon the
deposit and pledge thereof in the manner contemplated by the Indenture,
will be validly issued in conformity with the Mortgage Indenture, and
constitute legal, valid and binding obligations of the Company, subject
to bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or
affecting creditors' rights and general equity principles and will be
entitled to the security afforded by the Mortgage Indenture equally and
ratably with the securities outstanding thereunder;
(h) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Distribution
Agreement in connection with the issuance and sale of the Notes by the
Company, except with the Commission and except such as may be required
under state securities laws (we assume, with your permission, that with
respect to each particular Debt Security, inclusion of any alternative
or additional terms in such Debt Security that are not currently
specified in the forms of Notes examined by us would not require the
Company to obtain any regulatory consent, authorization or
D-6
February 21,1997
Page 7
approval or make any regulatory filing in order for the Company to
issue, sell and deliver such Security), and except for filings with and
the orders from the PSCN and the CPUC authorizing the issuance and sale
by the Company of the Notes, subject to certain conditions set forth
therein, which orders have been obtained and are in full effect;
(i) The execution, delivery and performance of the Indenture, the
Fourth Supplemental Indenture, the Thirty-fifth Supplemental Indenture
and the Distribution Agreement, the issuance of the Mortgage Bonds, the
pledge of the Designated Mortgage Bonds and the issuance and sale of the
Notes, and compliance with the terms, conditions and provisions thereof,
will not result in a breach or violation of any of the terms, conditions
and provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court
having jurisdiction over the Company or any subsidiary of the Company or
any of their properties or any agreement or instrument known to us to
which the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary. The Company
has full power and authority to authorize, issue and sell the Notes as
contemplated by the Distribution Agreement (it being understood that we
have assumed with respect to each particular Debt Security that the
inclusion of any alternative or additional terms in such Debt Security
that are not currently specified in the form of Notes examined by us
will not cause the issuance, sale or delivery of such Debt Security, the
terms of such Debt Security, or the compliance by the Company with such
terms, to violate any of the orders or laws specified in this paragraph
or to result in a default under or breach of any of the agreements
specified in this paragraph);
(j) The forms of the Notes and the Mortgage Bonds conform as to legal
matters in all material respects with the statements concerning them in
the Registration Statement and Prospectus;
(k) The Distribution Agreement has been duly authorized, executed and
delivered by the Company; and
(l) The Company is not a holding company or a subsidiary of a
registered holding company within the meaning of the Public Utility
Holding Company Act of 1935.
This opinion is rendered to you solely in connection with the
consummation of the transactions contemplated by the Distribution Agreement
and, without our express written consent, may not be relied upon by you for
any
D-7
February 21,1997
Page 8
other purpose or by any other person for any purpose whatsoever. This
opinion is given as of the date hereof and imposes no obligation upon us to
update this opinion. We specifically disclaim any undertaking or obligation
to advise the addressees hereof or any other party expressly permitted hereby
to rely upon this opinion of any facts or circumstances that may hereafter be
brought to out attention or any change in any laws that may hereafter occur
which may alter or affect the opinions expressed herein.
Very truly yours,
XXXXXX, XXXX & XXXXXXX
D-8
EXHIBIT E
[LETTERHEAD OF XXXXXXXX AND WEDGE]
February 21, 1997
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Bankers Trust Company
0 Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Re: Sierra Pacific Power Company
$35,000,000 of Collateralized Medium-Term Notes, Series D
----------------------------------------------------------
Ladies and Gentlemen:
As special Nevada counsel for Sierra Pacific Power Company (the
"Company"), we are furnishing this opinion to you pursuant to Section 5(f) of
the Distribution Agreement dated February 21, 1997 (the "Distribution
Agreement") between the Company and each of Xxxxxx Brothers, Inc., X.X.
Xxxxxxx & Sons, Inc. and UBS Securities LLC as Agents in connection with the
issuance of Collateralized Medium Term Notes, Series D, in an initial
aggregate principal amount of $35,000,000 (the "Notes"), to be issued from
time to time by the Company and secured by $35,000,000 of First Mortgage
Bonds, 9%, Series NN due 2037 to be issued by the Company. All capitalized
terms used herein without definition and defined in the Distribution
Agreement are used herein as therein defined.
E-1
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 2
In connection with rendering this opinion, we have examined the following
documents:
(a) A Certificate of Corporate Existence issued by the Secretary of
State of Nevada;
(b) The Restated Articles of Incorporation of the Company and all
amendments thereto (the "Charter");
(c) The By-laws of the Company as now in effect;
(d) Resolutions adopted by the Board of Directors of the Company on
November 13, 1996, relating to the issuance and sale of the notes and matters
related thereto;
(e) The Indenture, including the Fourth Supplemental Indenture and the
proposed form of fixed-rate note to be issued under the Fourth Supplemental
Indenture;
(f) The Mortgage Indenture, including the Thirty-fifth Supplemental
Indenture thereto dated as of February 1, 1997 (the "Thirty-fifth
Supplemental Indenture");
(g) Fully executed counterparts or copies of the order of the Public
Service Commission of Nevada issued on October 19, 1995, Docket No. 95-6034
(the "Order");
(h) The Mortgage Bonds;
(i) The Distribution Agreement;
(j) The Registration Statement of the Company on Form S-3 as filed with
the Securities and Exchange Commission (File No. 333-17041) under the Securities
Act of 1933, as amended, including the Prospectus relating to the Notes dated
December 20, 1996 (the "Prospectus"); and
(k) Such other records, instruments and agreements as we have deemed
appropriate for the purposes of this opinion.
E-2
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 3
We have also examined evidence satisfactory to us relating to the
recordation and filing of the Indenture of Mortgage dated as of December 1,
1940, between the Company and The New England Trust Company (State Street
Bank and Trust Company, as successor trustee) and Xxx X. Xxxxxx (Xxxxxx X.
Xxxxxxx, as successor trustee), as trustees (the "1940 Indenture of
Mortgage") and the First through the Thirty-fourth supplements thereto.
In our examination, we have assumed the genuineness and authenticity of
all signatures other than the signatures of the Company; the accuracy and
authenticity of all records, instruments and agreements submitted to us as
originals; the conformity to the original documents of all documents
submitted to us as copies; the authenticity of the originals of such copies;
the accuracy, completeness and authenticity of all certificates of public
officials and others as of the date hereof; and the due execution and
delivery pursuant to due authorization thereof by, and the validity and
binding effect thereof on, each party thereto other than the Company. As to
any facts material to our opinion, we have, when relevant facts were not
independently established, relied upon certificates of the Company or its
officers or of public officials.
We have not examined the Notes or the Mortgage Bonds, except specimens
thereof, and we have assumed with respect to each particular Note and
Mortgage Bond that the inclusion of any alternative or additional terms in
such Note or Mortgage Bond that are not currently specified in the form of
Note or Mortgage Bond examined by us will not cause the issuance or sale of
such Note, the issuance and delivery of such Mortgage Bond, the terms of such
Note or Mortgage Bond, or the compliance by the Company with such terms, to
breach or violate any of the terms of the Order.
As used in this opinion, the expression "to the best of our knowledge"
with reference to matters of fact means that, after an examination of the
documents made available to us by the Company and after inquiries of
officers, managers or employees of the Company, we find no reason to believe
that the opinions expressed herein are factually inaccurate; but beyond that,
we have not made an independent factual investigation for the purpose of
rendering this opinion.
We have made such examination of law as in our judgment is necessary or
appropriate for purposes of this opinion. We do not, however, purport to be
qualified to pass upon, and express no opinion as to, federal law or the laws
of any jurisdiction other than the laws of the
E-3
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 4
State of Nevada (excluding therefrom principles of conflicts of laws,
securities or blue sky laws, and laws of political subdivisions of such
State).
Based upon and subject to the foregoing, we are of the opinion that:
(A) The Company is a corporation duly organized and existing and
in good standing under the laws of the State of Nevada, duly qualified to
hold property and to transact an electric, gas and water public utility
business in the State of Nevada, and with powers adequate for the
execution and delivery of Distribution Agreement, the Indenture, the
Notes, the Fourth Supplemental Indenture, the Mortgage Bonds and the
Thirty-fifth Supplemental Indenture;
(B) The Mortgage Indenture, and all supplements thereto (including
the Thirty-fifth Supplemental Indenture), has been duly authorized,
executed and delivered on behalf of the Company and (assuming the due
authorization, execution and delivery on behalf of the other parties
thereto) is enforceable in accordance with its terms under the laws of
Nevada except that the enforcement of the rights and remedies created
thereby is subject to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general application affecting the rights and remedies
of creditors and that the availability of the remedy of specific
performance or of injunctive relief is subject to the discretion of the
court before which any proceedings therefor may be brought and except that
the provisions of the Mortgage Indenture subjecting to the lien thereof
after-acquired property of the Company may not be effective in some cases
prior to the execution, delivery and recording of a supplemental indenture
specifically subjecting such after-acquired property to the lien of the
Mortgage Indenture.
Without limiting the generality of the foregoing qualifications, we
call your attention to certain laws of the State of Nevada of general
application affecting the rights and remedies of creditors, including
without limitation the prohibition against unilateral right of entry in
the event of default of the debtor, limitations on the form of action
necessary to enforce a debt secured by real property, anti-deficiency
judgment laws, the rights of debtors and junior lien holders to
redemption following judicial foreclosure, and the effect of court cases
that have held that certain provisions of agreements are unenforceable
where enforcement would violate the creditor's implied covenant of good
faith and fair dealing or where it cannot be demonstrated that
enforcement is reasonably
E-4
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 5
necessary for the protection of the security. In addition, we call your
attention to the fact that any purchaser at foreclosure sale or any other
party other than the Company would probably have to qualify as a public
utility under the laws of the State of Nevada and/or qualify as an
assignee of the Company under its governmental franchises, permits and
licenses in order to own or operate the properties of the Company as a
public utility.
(C) The Mortgage Bonds to be deposited with the Trustee and the
Designated Mortgage Bonds pledged with the Trustee as the basis for the
issuance of the Notes, have been duly authorized and executed by the
Company and, upon the deposit and pledge thereof in the manner
contemplated by the Indenture, will constitute legal, valid and binding
obligations of the Company, subject, as to enforcement, to laws relating
to or affecting generally the enforcement of creditors' rights,
including, without limitation, bankruptcy, insolvency, reorganization,
moratorium and similar laws of general application affecting the rights
and remedies of creditors and to general principles of equity including
the availability of the remedy of specific performance or of injunctive
relief and will be entitled to the security afforded by the Mortgage
Indenture equally and ratably with the securities outstanding thereunder.
(D) The creation, issuance and sale of the Notes have been duly
authorized by the Company; and the Indenture and Fourth Supplemental
Indenture have been duly authorized, executed and delivered on behalf of
the Company.
(E) The Indenture, the Notes, the Fourth Supplemental Indenture, the
Mortgage Bonds and the Thirty-fifth Supplemental Indenture will not result
in a breach or violation of any of the terms, conditions and provisions
of, or constitute a default under, (i) the Charter or the By-laws of the
Company; (ii) any statute, rule or regulation of the State of Nevada; or
(iii) any order of any court or governmental agency of the State of
Nevada having jurisdiction over the Company or any of its properties,
which order is material to the Company taken as a whole.
(F) The Order remains in full force and effect in the form issued
and no other authorization, approval or other action by, and no notice to
or filing or registration with, any governmental authority or regulatory
body of the State of Nevada is required for the due execution, delivery
and performance by the Company of the Indenture, the Notes,
E-5
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 6
the Fourth Supplemental Indenture, the Mortgage Bonds or the Thirty-fifth
Supplemental Indenture, except in accordance with the terms of its
authorizing orders.
(G) To the best of our knowledge and except as set forth in the
Prospectus, there is no pending or threatened action or proceeding before
any court, governmental agency or arbitrator against, directly involving
or affecting the Company or any of its subsidiaries which, in any case,
may materially and adversely affect the ability of the Company to perform
its obligations under the Indenture, the Notes, the Fourth Supplemental
Indenture, the Mortgage Bonds or the Thirty-fifth Supplemental Indenture.
(H) The Mortgage Indenture and all supplements thereto (including
the Thirty-fifth Supplemental Indenture) (or appropriate financing
statements) have been duly recorded or filed in all places in the State
of Nevada where such recording or filing is necessary to perfect the
lien of the Mortgage Indenture as a lien on and security interest in
both real and personal property of the Company subjected thereto.
Notwithstanding the foregoing, (i) we express no opinion regarding the
lien of the Mortgage Indenture as against franchises, permits and other
personal property, which, under Nevada law, may not be made subject to a
personal property lien, and (ii) we express no opinion as to the
perfection of the security interest in any Personal Property in which,
under the provisions of the Nevada Uniform Commercial Code, a security
interest cannot be perfected by filing a financing statement.
(I) No taxes (as distinguished from filing and recordation fees)
are payable to the State of Nevada or any subdivision or agency thereof
in connection with the execution and delivery of the Notes, the Mortgage
Bonds or the Thirty-fifth Supplemental Indenture.
This letter is intended for your information only as to the parties to
whom it is addressed in connection with the transactions described herein and
for Xxxxxx, Xxxx & Xxxxxxx, counsel for the Company, and Ropes & Gray,
counsel for the Agents, and is not to be used, circulated, quoted or
otherwise referred to for any other purpose without our prior written
permission.
Very truly yours,
XXXXXXXX AND WEDGE
By
--------------------------------
XXXXXX X. XxXXXXX
E-6
EXHIBIT F
[LETTERHEAD OF XXXXXX AND XXXXX XXX]
February 21, 1997
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Bankers Trust Company
0 Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Re: Collateralized Medium-Term Notes, Series D, in an Initial Aggregate
Principal Amount of $35,000,000
--------------------------------------------------------------------
Ladies and Gentlemen:
As special California counsel for Sierra Pacific Power Company (the
"Company"), we are furnishing this opinion to you pursuant to Section 5(g) of
the Distribution Agreement dated February 21, 1997 (the "Distribution
Agreement") between the Company and each of Xxxxxx Brothers, Inc., X.X.
Xxxxxxx & Sons, Inc., and UBS Securities LLC as agents (each, an "Agent" and,
collectively, the "Agents") in connection with the proposed issuance and sale
from time to time of Collateralized Medium-Term Notes, Series D (the "Notes").
The Notes are to be issued pursuant to a Collateral Trust Indenture dated as
of June 1, 1992 between the Company and Bankers Trust Company, as Trustee
(the "Indenture Trustee"), as supplemented by the First Supplemental
Indenture dated
F-1
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 2
as of June 1, 1992, the Second Supplemental Indenture, dated as of October 1,
1993, the Third Supplemental Indenture, dated as of February 1, 1996, and
the Fourth Supplemental Indenture, dated as of February 1, 1997 (as so
supplemented, the "Indenture"), and are to be secured by the Company's first
mortgage bonds (the "First Mortgage Bonds") to be issued pursuant to an
Indenture of Mortgage dated as of December 1, 1940 from the Company's
predecessor to The New England Trust Company and Xxx X. Xxxxxx (State Street
Bank and Trust Company and Xxxxxx X. Xxxxxxx, respectively, by succession),
as Trustees, as heretofore supplemented and modified and as to be further
supplemented by a Thirty-fifth Supplemental Indenture dated as of February 1,
1997 (the "Supplemental First Mortgage Indenture" and such Indenture of
Mortgage, as so supplemented and modified, the "First Mortgage Indenture").
As counsel for the Company, we advise you as follows:
We have examined the restated Articles of Organization of the Company and
all amendments thereto (the "Charter"), the Bylaws of the Company as now in
effect, resolutions of the Board of Directors of the Company, the final form of
each of the First Mortgage Bonds, the First Mortgage Indenture, the Supplemental
First Mortgage Indenture, the Indenture, the Distribution Agreement, the
Decision and Order issued by the California Public Utilities Commission (the
"CPUC") on August 11, 1995 (Decision ("D.") 95-08-045), Officer's Certificates
duly executed by an officer of the Company, and such other records, instruments
and agreements as we have deemed appropriate for purposes of this opinion.
In issuing the opinions expressed herein, we have also assumed (1) that
the total aggregate principal amount of issuances of debt securities and
guaranties, including the Debt Securities, to be issued by the Company
pursuant to the authority granted to it by Decision No. 00-00-000 of the
Public Utilities Commission of the State of California (the "CPUC") will
not exceed One Hundred Fifteen Million Dollars ($115,000,000), and (2) that
the Debt Securities are being issued pursuant to the authority granted to the
Company under CPUC Decision No. 00-00-000.
In our examination of the records, instruments and agreements referred to
above, we have assumed the genuineness and authenticity of all signatures; the
accuracy and authenticity of all records, instruments, and agreements submitted
to us as originals; the conformity to originals of all documents submitted to us
as copies; the authenticity of the originals of such copies; the accuracy,
completeness, and authenticity of certificates of public officials and others as
of the date hereof; and the due execution and delivery pursuant to due
authorization thereof by, and the validity and binding effect thereof on, each
party thereto other than the Company. As to certain issues of fact, we have
relied upon the above-mentioned Officer's Certificates.
We have made such examination of law as in our judgment is necessary or
appropriate for purposes of this opinion. We do not, however, for the purposes
of this opinion, purport to be qualified to pass upon, and express no opinion as
to, the laws of any jurisdiction other than the State of California and the
United States of America.
F-2
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 3
Based upon and subject to the foregoing, and subject to the qualifications
set forth herein, we are of the opinion that:
1. The Company is duly qualified and in good standing as a foreign
corporation under the laws of the State of California and is duly qualified to
hold property and to transact an electric public utility business in the State
of California.
2. The Decision and Order dated August 11, 1995 (D. 95-08-045) of the
CPUC remain in full force and effect in the form issued and no other
authorization, approval or other action by, and no notice to or filing or
registration with, any governmental authority or regulatory body of the State of
California is required for the due execution, delivery and performance by the
Company of the First Mortgage Bonds, the Indenture, the Supplemental First
Mortgage Indenture, or the Distribution Agreement.
3. The First Mortgage Bonds, the First Mortgage Indenture and the
Supplemental First Mortgage Indenture (the "First Mortgage Documents") are
enforceable in accordance with their terms and under the laws of California.
However, no opinion is given with respect to the effect of applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
rights of creditors generally; and no opinion is given with respect to the
effect of rules of law governing specific performance, injunctive relief and
other equitable remedies whether or not equitable remedies are sought, including
without limitation the effect of court cases that have held that certain
provisions of agreements are unenforceable where enforcement would violate the
creditor's implied covenant of good faith and fair dealing or where it cannot be
demonstrated that enforcement is reasonably necessary for the protection of the
security. However, in our opinion, such rules of law and court cases do not
render the First Mortgage Documents invalid as a whole and there exist, in the
First Mortgage Documents or pursuant to applicable law, legally adequate
remedies for a realization of the principal benefits and/or security intended to
be provided by the First Mortgage Documents.
We call your attention to certain laws of general application in California
affecting the rights and remedies of creditors, which include, without
limitation, the prohibition against unilateral right of entry in the event of
default of the debtor, limitations on the form of action necessary to enforce a
debt secured by real property, anti-deficiency judgment laws and the rights of
debtors and junior lien holders to redemption following judicial foreclosure.
We also call to your attention that the provisions of the First Mortgage
Indenture subjecting to the lien
F-3
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 4
thereof after-acquired property of the Company may not be effective in some
cases prior to the execution, delivery and recording of a supplemental
indenture specifically subjecting such after-acquired property to the lien of
the First Mortgage Indenture. In addition, we call your attention to the
fact that a purchaser at foreclosure sale or anyone other than the Company
would probably have to qualify under California law in order to own and
operate the property of the Company as a public entity.
4. The First Mortgage Bonds deposited with the Indenture Trustee and a
new series of bonds designated "First Mortgage Bonds 9% Series NN due 2037"
pledged with the Indenture Trustee as the basis for the issuance of the Notes
constitute legal, valid and binding obligations of the Company, subject, as to
enforcement, to laws relating to or affecting generally the enforcement of
creditors' rights, including, without limitation, bankruptcy and insolvency
laws, and to general principles of equity and will be entitled to the security
afforded by the First Mortgage Indenture equally and ratably with the securities
outstanding thereunder.
5. The First Mortgage Indenture (or appropriate financing statements)
have been duly recorded or filed in all places in the State of California where
such recording or filing is necessary to perfect the lien of the First Mortgage
Indenture as a lien on the security interest in both real and personal property
of the Company subjected thereto that is located in the State of California.
Notwithstanding the foregoing, (i) we express no opinion regarding the lien of
the First Mortgage Indenture as against franchises, permits and other personal
property which, under California law, may not be made subject to a personal
property lien, and (ii) we express no opinion as to the perfection of the
security interest in any Personal Property in which, under the provisions of the
California Uniform Commercial Code, a security interest cannot be perfected by
filing a financing statement.
6. No taxes (as distinguished from filing and recordation fees) are
payable to the State of California or any subdivision or agency thereof in
connection with the execution and delivery of the First Mortgage Bonds or the
Supplemental First Mortgage Indenture.
The opinions set forth above are given in our capacity as California
counsel to the Company only. We do not opine as to matters of New York or
Nevada law, nor as to matters of federal public utilities or environmental law,
nor as to matters of law of any other State.
F-4
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
February 21, 1997
Page 5
This opinion is furnished by us as counsel for the Company in connection
with the proposed issuance and sale of the Notes and is solely for the benefit
of the addressees hereto, of their counsel and of Xxxxxx, Xxxx & Xxxxxxx,
counsel for the Company, and is not to be used, circulated, quoted or otherwise
referred to for any other purpose without our express written permission.
Very truly yours,
XXXXXX & XXXXX LLP
F-5
EXHIBIT G
---------
OFFICER'S CERTIFICATE
Each of the undersigned, Xxxx X. Xxxxxx, Controller, and Xxxxxxx X.
Xxxxxxxx, Senior Vice President, General Counsel and Corporate Secretary, of
Sierra Pacific Power Company (the "Company"), does hereby certify, to the best
of his or her knowledge, that (with terms not otherwise defined herein having
the meanings set forth in the Distribution Agreement dated February 21, 1997
between the Company and each of Xxxxxx Brothers Inc., X.X. Xxxxxxx & Sons, Inc.
and UBS Securities LLC (the "Distribution Agreement")):
(1) the representations and warranties of the Company in the Distribution
Agreement are true and correct;
(2) the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under the
Distribution Agreement at or prior to the date hereof;
(3) no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are contemplated by the
Commission; and
(4) subsequent to the date of the most recent audited financial statements
incorporated by reference in the Prospectus, neither the Company nor
any of its subsidiaries has sustained any material adverse change, or
any development involving a prospective material adverse change, in or
affecting particularly the capital stock or long-term debt of the
Company or any of its subsidiaries or the business, financial
position, results of operations or properties of the Company or any of
its subsidiaries other than as set forth in or contemplated by the
Prospectus or as described herein.
IN WITNESS WHEREOF, we have hereunto set our hands this 21st day of
February, 1997.
---------------------------------
Xxxx X. Xxxxxx, Controller
---------------------------------
Xxxxxxx X. Xxxxxxxx, Senior Vice
President, Corporate Secretary and
General Counsel
EXHIBIT H
---------
The letter of the Company's independent accountants will state in effect
that:
(1) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the Rules
and Regulations.
(2) In their opinion, the financial statements audited by them and
incorporated by reference in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations.
(3) On the basis of procedures referred to in such letter, including a
reading of the latest available interim financial statements of the Company
and inquiries of officials of the Company responsible for financial and
accounting matters, nothing caused them to believe that:
(a) any material modifications should be made to the
unaudited condensed consolidated financial statements incorporated
by reference in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(b) the unaudited condensed consolidated financial
statements incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Exchange Act of 1934 as
it applies to Form 10-Q and the related published rules and
regulations;
(c) at the date of the latest available internal balance
sheet of the Company, there was any change in the capital stock,
notes payable or long-term debt or any decrease in the net assets
of the Company, or, at a subsequent specified date not more than
five days prior to the date of such letter, there was a change in
the capital stock, notes payable or long-term debt of the Company,
in each case as compared with the amounts shown in the most recent
balance sheet of the Company incorporated by reference in the
Prospectus, except for (i) increases in capital stock resulting
from the issuance of shares pursuant to employee benefit plans and
the Company's Common Stock Investment Plan, (ii) decrease in
long-term debt resulting from amortization of debt premium or
increases in long-term debt premium or increases in long-term debt
resulting from draw-downs of funds held in trust, (iii) decreases
in net assets resulting from the declaration of dividends, (iv)
changes or decreases which the Prospectus discloses have occurred
or may occur and (v) such other changes or decreases as may be set
forth in such letter; or
(d) at the date of the latest available internal balance
sheet of the Company, there was any decrease, as compared with the
most recent twelve-month period for which operating revenues and
net income are included or incorporated by reference in the
Prospectus, in such amounts, except in all cases for changes or
decreases which the Prospectus discloses have occurred or as may be
set forth in such letter.
(4) In addition to their examination referred to in their report in
the Registration Statement and Prospectus and the procedures referred to in
(3) above, they have carried out certain other specified procedures, not
constituting an audit, with respect to the dollar amounts, percentages and
other financial information (in each case to the extent that such dollar
amounts, percentages and other financial information, either directly or by
analysis or computation, are derived from the general accounting records of
the Company) as requested by the Agents (or Agents' counsel), which appear in
the Company's annual report on Form 10-K for its most recent fiscal year
under the caption "Business" in Item 1 and Item 7 "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and have found
such dollar amounts, percentages and financial information to be in agreement
with the accounting records of the Company.
