$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
January , 1997
▇▇▇▇▇▇ Brothers Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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 January __, 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 ▇▇▇ ▇. ▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as successor
trustee), as amended and supplemented and as it will be further supplemented by
a Thirty-fifth Supplemental Indenture
dated as of January 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.
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(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
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delivery of, and payment for, such Notes or the Company has accepted an
offer to purchase Notes but the related settlement has not occurred.
(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.
(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
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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
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such action, suit or proceeding is known by the Company to be threatened or
contemplated.
(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.
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(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
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to purchase Notes from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed. For the purpose of the
foregoing sentence, "business day" shall mean any day which is not a Saturday
or Sudnay 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.
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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:
(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
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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
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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. 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
11
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.
(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
13
hereof, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(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 ▇▇▇▇▇'▇
Investors Service, Inc., Standard and Poor's Corporation or Duff & ▇▇▇▇▇▇,
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
14
request to enable them to be satisfied with respect to the matters referred
to in this subparagraph and to pass upon such matters.
(e) OPINION OF ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇. On the Commencement Date, the
Agents shall have received the opinion, addressed to the Agents and dated
the Commencement Date, of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the
Company, in the form set forth in EXHIBIT D to this Agreement.
(f) OPINION OF ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇. On the Commencement Date, the
Agents shall have received the opinion, addressed to the Agents and dated
the Commencement Date, of ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇. On the Commencement Date, the
Agents shall have received the opinion, addressed to the Agents and dated
the Commencement Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇, 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
15
may be, on the terms and in the manner contemplated by the Prospectus, as
amended or supplemented.
(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.
▇▇▇▇▇ & ▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, in giving their opinions pursuant
to this Section 5, may rely upon the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇ as to all
legal conclusions affected by the laws of California, and upon the opinion of
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ 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).
18
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 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
19
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.
(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.
20
(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 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
21
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
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
22
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.
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:
▇▇▇▇▇▇ Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
Attention: Medium-Term Note Department, Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇; UBS Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy No.:
(▇▇▇) ▇▇▇-▇▇▇▇; and ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Attention: ________________, Telephone No.: _________________,
Telecopy No.: ___________________; notices to the Company shall be directed to
it as follows: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇.▇. Box 30150, Reno, Nevada 89520, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy No.: (702) 689-
5462; 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
23
parties on separate counterparts and the executed counterparts shall together
constitute a single instrument.
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:
------------------------------------
(Title)
CONFIRMED AND ACCEPTED, as of the date first
above written:
▇▇▇▇▇▇ BROTHERS INC.
By:
-----------------------------
(Title)
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By:
-----------------------------
(Title)
UBS SECURITIES LLC
By:
-----------------------------
(Title)
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
January __, 1997 (the "Distribution Agreement"), between the Company on the
one hand and ▇▇▇▇▇▇ Brothers Inc., ▇.▇. ▇▇▇▇▇▇▇ & 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 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"). ▇▇▇▇▇▇ Brothers, ▇▇▇▇▇▇
Brothers, Inc., ▇.▇. ▇▇▇▇▇▇▇ & 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 January __,
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
January __, 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 January __, 1997, 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 10
copies of the Pricing Supplement filed with, or transmitted by a means
reasonably calculated to result in the timely filing 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
C-3
offer at the posted rates, it will prepare a Pricing Supplement reflecting such
posted rates, and after approval from the Agents, arrange to have 10 copies of
the Pricing Supplement filed with, or transmitted by means reasonably calculated
result in the timely filing 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.
ACCEPTANCE AND REJECTION OF OFFERS
C-4
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 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
C-5
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.
C-7
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 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
C-8
and legally binding obligation of the Issuer. The Issuer will assign to and
enter on each Note a transaction number.
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,
C-9
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 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 ________ __, 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
C-10
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
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 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
C-12
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.
4. Principal amount of the Notes.
C-13
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.
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
C-14
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. ▇▇▇▇▇▇▇▇▇).
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 ▇▇▇▇▇▇▇ (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 ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇]
January __, 1997
▇▇▇▇▇▇ Brothers Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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 January __, 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 January __, 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
D-1
January __, 1997
Page 2
Mortgage dated as of December 1, 1940, from the Company's predecessor to The New
England Trust Company and ▇▇▇ ▇. ▇▇▇▇▇▇ (State Street Bank and Trust Company and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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 listing the charter documents of the Company on file in his
office; 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 listed in said certificate of the Secretary of State of
Nevada;
(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 January 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, filed November 27, 1996, and all exhibits
thereto,
D-2
January __, 1997
Page 3
as filed with the Commission;
(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
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, and as to all matters governed by the laws of the State of
California, upon the letter of even date herewith addressed to you by ▇▇▇▇▇▇ &
▇▇▇▇▇ ▇▇▇, 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
January __, 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 at the closing of the sale of the Notes (other than the Notes).
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,
D-4
January __, 1997
Page 5
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, 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
January __, 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
January __, 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 court
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 other purpose or by any other person for any
D-7
January __, 1997
Page 8
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,
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇
D-8
EXHIBIT E
[LETTERHEAD OF ▇▇▇▇▇▇▇▇ AND WEDGE]
January __, 1997
▇▇▇▇▇▇ Brothers Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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 January __, 1997 (the "Distribution Agreement')
between the Company and each of ▇▇▇▇▇▇ Brothers, Inc., ▇.▇. ▇▇▇▇▇▇▇ & 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
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 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 January 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
January __, 1997 (the "Prospectus"); and
(k) Such other records, instruments and agreements as we have deemed
appropriate for the purposes of this opinion.
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
E-2
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 3
New England Trust Company (State Street Bank and Trust Company, as successor
trustee) and ▇▇▇ ▇. ▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as successor trustee), as
trustees (the "1940 Indenture of Mortgage") and the First through the Thirty-
fifth 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 State of Nevada (excluding therefrom
principles of conflicts of laws, securities or blue sky laws, and laws of
political subdivisions of such State).
E-3
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 4
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 that they
have been duly authorized, executed and delivered 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 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
E-4
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 5
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, the Fourth
Supplemental Indenture, the Mortgage Bonds or the Thirty-fifth Supplemental
Indenture, except in accordance with the terms of its authorizing orders.
E-5
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 6
(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.
(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
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, 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,
▇▇▇▇▇▇▇▇ AND WEDGE
By
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
E-6
EXHIBIT F
[LETTERHEAD OF ▇▇▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇]
January __, 1997
▇▇▇▇▇▇ Brothers Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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 January __, 1997 (the "Distribution Agreement")
between the Company and each of ▇▇▇▇▇▇ Brothers, Inc., ▇.▇. ▇▇▇▇▇▇▇ & 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, in an initial aggregate principal
amount of $35 million (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
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 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 January __, 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 ▇▇▇ ▇. ▇▇▇▇▇▇ (State Street Bank and Trust Company and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, 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 January 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), an Officer's Certificate
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 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 Certificate.
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
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 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
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 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
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 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 ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇, 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,
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
F-5
EXHIBIT G
OFFICER'S CERTIFICATE
Each of the undersigned, ▇▇▇▇ ▇. ▇▇▇▇▇▇, Controller, and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Senior Vice President, Corporate Secretary and General Counsel, of
Sierra Pacific Power Company (the "Company"), does hereby certify, to the
best of his or her knowledge, that:
(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.
Terms not otherwise defined herein having the meanings set forth in the
Distribution Agreement dated January __, 1997 between the Company and each of
▇▇▇▇▇▇ Brothers Inc., ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. and UBS Securities LLC (the
"Distribution Agreement").
IN WITNESS WHEREOF, we have hereunto set our hands this ___ day of January,
1997.
______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, Controller
______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice
President, Corporate Secretary and
General Counsel