Exhibit 1.1
SIERRA PACIFIC RESOURCES
(a Nevada Corporation)
6,000,000 Premium Income Equity Securities(SM) ("PIES(SM)")
Consisting of 6,000,000 Corporate PIES
UNDERWRITING AGREEMENT
Dated: November 12, 2001
TABLE OF CONTENTS
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY................................................2
(a) FILINGS UNDER SECURITIES LAWS...................................................................2
(b) ELIGIBILITY FOR FORM S-3........................................................................3
(c) COMPLIANCE WITH REGISTRATION REQUIREMENTS.......................................................3
(d) INCORPORATED DOCUMENTS..........................................................................3
(e) GOOD STANDING...................................................................................4
(f) CAPITALIZATION..................................................................................4
(g) ABSENCE OF PROCEEDINGS..........................................................................4
(h) ABSENCE OF DEFAULTS.............................................................................5
(i) REGISTRATION RIGHTS.............................................................................5
(j) NO MATERIAL LOSS; NO MATERIAL ADVERSE CHANGE....................................................5
(k) FINANCIAL STATEMENTS............................................................................5
(l) INDEPENDENT ACCOUNTANTS.........................................................................6
(m) TITLE TO PROPERTY...............................................................................6
(n) POSSESSION OF LICENSES AND PERMITS..............................................................6
(o) NO MATERIAL TRANSACTIONS, ETC...................................................................7
(p) AUTHORIZATION AND DESCRIPTION OF UNDERWRITING AGREEMENT.........................................7
(q) AUTHORIZATION AND DESCRIPTION OF PURCHASE CONTRACT AGREEMENT....................................7
(r) AUTHORIZATION AND DESCRIPTION OF CORPORATE PIES.................................................7
(s) AUTHORIZATION AND DESCRIPTION OF TREASURY PIES..................................................8
(t) AUTHORIZATION AND DESCRIPTION OF INDENTURE......................................................8
(u) AUTHORIZATION AND DESCRIPTION OF SENIOR NOTES...................................................8
(v) AUTHORIZATION AND DESCRIPTION OF PLEDGE AGREEMENT...............................................9
(w) AUTHORIZATION AND DESCRIPTION OF REMARKETING AGREEMENT..........................................9
(x) UNISSUED SHARES.................................................................................9
(y) PREEMPTIVE RIGHTS..............................................................................10
(z) ABSENCE OF DEFAULTS AND CONFLICTS..............................................................10
(aa) INVESTMENT COMPANY ACT.........................................................................10
(bb) PUBLIC UTILITY HOLDING COMPANY ACT.............................................................10
(cc) RULE 501(B)....................................................................................11
(dd) OFFICER'S CERTIFICATE..........................................................................11
(ee) CERTAIN ACCOUNTING INFORMATION.................................................................11
2. PURCHASE OF THE CORPORATE PIES BY THE UNDERWRITERS......................................................11
3. OFFERING OF CORPORATE PIES BY THE UNDERWRITERS..........................................................11
4. DELIVERY OF AND PAYMENT FOR THE CORPORATE PIES..........................................................11
5. FURTHER AGREEMENTS OF THE COMPANY.......................................................................12
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.................................12
(b) DELIVERY OF REGISTRATION STATEMENTS............................................................13
(c) DELIVERY OF DOCUMENTS..........................................................................13
(d) FILING OF AMENDMENTS...........................................................................14
(e) DELIVERY TO UNDERWRITERS.......................................................................14
(f) EARNING STATEMENT..............................................................................14
(g) BLUE SKY.......................................................................................14
(h) COMPANY REPORTS................................................................................14
i
(i) LISTING........................................................................................14
(j) PRICE STABILIZATION............................................................................15
(k) DTC............................................................................................15
(l) USE OF PROCEEDS................................................................................15
(m) INVESTMENT COMPANY ACT.........................................................................15
(n) RESTRICTION ON SALE OF SECURITIES..............................................................15
6. EXPENSES................................................................................................15
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.................................................................17
(a) SEC MATTERS....................................................................................17
(b) NO MISSTATEMENTS OR OMISSIONS..................................................................17
(c) CORPORATE PROCEEDINGS..........................................................................17
(d) LOCK-UP AGREEMENTS.............................................................................17
(e) OPINIONS OF COUNSEL FOR COMPANY................................................................18
(f) OPINION OF COUNSEL FOR PURCHASE CONTRACT AGENT AND TRUSTEE.....................................18
(g) OPINION OF COUNSEL FOR COLLATERAL AGENT AND SECURITIES INTERMEDIARY............................18
(h) OPINIONS OF COUNSEL FOR UNDERWRITERS...........................................................18
(i) ACCOUNTANTS' COMFORT LETTER....................................................................18
(j) OFFICERS' CERTIFICATES.........................................................................18
(k) SENIOR NOTES...................................................................................19
(l) CORPORATE PIES.................................................................................19
(m) OTHER INFORMATION..............................................................................19
(n) NO MATERIAL ADVERSE DEVELOPMENTS...............................................................19
(o) NO DOWNGRADE...................................................................................20
(p) GENERAL MARKET OUT.............................................................................20
8. INDEMNIFICATION AND CONTRIBUTION........................................................................20
(a) INDEMNIFICATION OF UNDERWRITERS................................................................20
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS.............................................22
(c) NOTIFICATION; ACTION AGAINST PARTIES; SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE......22
(d) CONTRIBUTION...................................................................................23
(e) INFORMATION FURNISHED BY UNDERWRITERS..........................................................24
9. DEFAULTING UNDERWRITERS.................................................................................24
10. TERMINATION.............................................................................................25
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.................................................................25
12. NOTICES, ETC............................................................................................26
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT................................................................26
14. SURVIVAL................................................................................................27
15. DEFINITION OF THE TERM "BUSINESS DAY"...................................................................27
16. GOVERNING LAW...........................................................................................27
17. CONSENT TO JURISDICTION.................................................................................27
18. COUNTERPARTS............................................................................................27
19. HEADINGS................................................................................................27
20. UNDERWRITERS' COUNSEL...................................................................................27
ii
SCHEDULE 1.....................................................................................................S1-1
SCHEDULE 2.....................................................................................................S2-1
ANNEX A.........................................................................................................A-1
ANNEX B.........................................................................................................B-1
ANNEX C.........................................................................................................C-1
ANNEX D.........................................................................................................D-1
ANNEX E.........................................................................................................E-1
SIERRA PACIFIC RESOURCES
6,000,000 PREMIUM INCOME EQUITY SECURITIESSM ("PIESSM")
CONSISTING OF 6,000,000 CORPORATE PIES
UNDERWRITING AGREEMENT
November 12, 2001
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇ SACHS & CO.
FIRST UNION SECURITIES, INC.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Ladies and Gentlemen:
Sierra Pacific Resources, a Nevada corporation (the "COMPANY"),
proposes, subject to the terms and conditions stated herein, to issue and sell
6,000,000 of its Corporate PIES (the "FIRM CORPORATE PIES") to ▇▇▇▇▇▇ Brothers
Inc. and the other underwriters named in Schedule 1 hereto (the "UNDERWRITERS").
In addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional 900,000 Corporate PIES on the terms and for the
purposes set forth in Section 2 (the "OPTION CORPORATE PIES" and, together with
the Firm Corporate PIES, the "CORPORATE PIES"). This is to confirm the agreement
between the Company and the Underwriters concerning the offer, issue and sale of
the Corporate PIES.
Each Corporate PIES will consist of (a) a stock purchase contract (a
"PURCHASE CONTRACT") to be issued by the Company pursuant to a Purchase Contract
Agreement (the "PURCHASE CONTRACT AGREEMENT") to be entered into between the
Company and The Bank of New York, as Purchase Contract Agent (the "PURCHASE
CONTRACT AGENT"), under which (i) the holder will agree to purchase from the
Company, and the Company will agree to sell to the holder, on November 15, 2005,
for $50, a number of shares of its common stock, par value $1.00 per share (the
"COMMON STOCK"), equal to the settlement rate then in effect and as subject to
adjustment, in each case, as set forth in the Prospectus (as hereinafter
defined), and (ii) the Company will pay to the holder purchase contract
adjustment payments at the annual rate of 1.070% payable quarterly in arrears,
as set forth in the Prospectus, and (b) one of the Company's 7.930% Senior Notes
due 2007 (each, a "SENIOR NOTE"), having a principal amount of $50. The Company
will issue the Senior Notes pursuant to the Indenture, dated as of May 1, 2000
between the Company and The Bank of New York, as Trustee (the "TRUSTEE") (the
"ORIGINAL INDENTURE"), and the Officers' Certificate, dated as of November 16,
2001, establishing the terms and other provisions of the Senior Notes (the
"OFFICERS' CERTIFICATE," and together with the Original Indenture, the
"INDENTURE").
In accordance with the terms of the Purchase Contract Agreement, the
holders of the Corporate PIES will pledge their Senior Notes to ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as Collateral Agent (the "COLLATERAL AGENT"),
pursuant to a Pledge Agreement (the "PLEDGE AGREEMENT") to be entered into among
the Company, the Purchase Contract Agent, ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Securities Intermediary (the "SECURITIES INTERMEDIARY"), and the
Collateral Agent, to secure the holders' obligations to purchase Common Stock
under the Purchase Contracts. Under certain circumstances, holders of Corporate
PIES may substitute certain U.S. Treasury securities for the Senior Notes that
are a part of such holders' Corporate PIES and thereby create Treasury PIES (the
"TREASURY PIES") pursuant to the terms of the Purchase Contract Agreement and
the Pledge Agreement.
In addition, the Senior Notes will be subject to remarketing to satisfy
the Corporate PIES holders' obligations to settle the Purchase Contract under
the Purchase Contract Agreement pursuant to a Remarketing Agreement (the
"REMARKETING AGREEMENT") to be entered into between the Company and ▇▇▇▇▇▇
Brothers Inc., as Remarketing Agent (the "REMARKETING AGENT").
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:
(a) FILINGS UNDER SECURITIES LAWS. (i) A registration statement on
Form S-3 (registration no. 333-72160) setting forth information with respect to
the Company and the Company's senior debt securities, shares of Common Stock,
stock purchase contracts and certain other securities (A) has been prepared by
the Company in conformity with the requirements of the Securities Act of 1933,
as amended, and the rules and regulations of the Securities and Exchange
Commission (the "COMMISSION") thereunder (collectively, the "SECURITIES ACT"),
(B) has been filed with the Commission under the Securities Act and (C) became
effective under the Securities Act on November 7, 2001, and the Indenture has
been qualified under the Trust Indenture Act of 1939, as amended and the rules
and regulations of the Commission thereunder (collectively, the "TRUST INDENTURE
ACT"). Copies of such registration statement and all exhibits thereto have been
delivered by the Company to you. As used in this Agreement, "EFFECTIVE TIME"
means the date and the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared effective by the
Commission; "EFFECTIVE DATE" means the date of the Effective Time; "PRELIMINARY
PROSPECTUS" means each prospectus included in such registration statement, or
amendments thereof, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Company with the consent of ▇▇▇▇▇▇
Brothers Inc. pursuant to Rule 424(a) under the Securities Act; "REGISTRATION
STATEMENT" means such registration statement, as amended as of the Effective
Time, including all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act and deemed to be a
part of the registration statement as of the Effective Time pursuant to Rule
430A of the Securities Act; and "PROSPECTUS" means the prospectus (including any
supplement thereto) in the form first used to confirm sales of Corporate PIES.
The Commission has not issued any order
2
preventing or suspending the use of any Preliminary Prospectus or the
Registration Statement.
(ii) Pursuant to Rule 429 under the Securities Act the Prospectus
will be used as a combined prospectus relating to the Registration Statement and
to the registration statement filed by the Company with the Commission on June
7, 1999 (registration no. 333-80149) which, as subsequently amended, became
effective on May 3, 2000. Unless the context otherwise requires, all references
in this Agreement to the Registration Statement shall be deemed to include such
prior registration statement.
(iii) All references in this Agreement to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include all documents incorporated by reference in the Registration
Statement, any Preliminary Prospectus or the Prospectus, as the case may be (the
"INCORPORATED DOCUMENTS"); and all references in this Agreement to amendments or
supplements to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "EXCHANGE ACT"), which is
incorporated by reference in the Registration Statement, such Preliminary
Prospectus or the Prospectus, as the case may be.
(b) ELIGIBILITY FOR FORM S-3. The conditions for use of Form S-3,
as set forth in the General Instructions thereto, have been satisfied.
(c) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Registration
Statement conforms, and the Prospectus and any further amendments or supplements
to the Registration Statement or the Prospectus will, when they become effective
or are filed with the Commission, as the case may be, conform in all respects to
the requirements of the Securities Act and do not and will not, as of the
applicable Effective Date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; PROVIDED THAT, the Company makes no
representation or warranty as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through ▇▇▇▇▇▇
Brothers Inc. specifically for inclusion therein. The Indenture conforms in all
material respects to the requirements of the Trust Indenture Act.
(d) INCORPORATED DOCUMENTS. (i) The Incorporated Documents when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and none of such documents contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading;
and any further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will conform in
all material respects to the requirements of the Exchange Act and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be
3
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(e) GOOD STANDING. Each of the Company and its Significant
Subsidiaries (as defined below) has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Nevada, is duly
qualified to do business and is in good standing as a foreign business entity in
each jurisdiction in which its ownership or lease of property or the conduct of
its businesses requires such qualification, and has all corporate power and
authority necessary to own, lease or hold its properties and to conduct the
businesses in which it is engaged, except where the failure to so qualify or to
be in good standing would not have a material adverse effect on the business,
affairs, management, condition (financial or otherwise), stockholders' equity or
results of operations of the Company and its subsidiaries considered as a whole
(a "Material Adverse Effect"); and none of the subsidiaries of the Company other
than Nevada Power Company and Sierra Pacific Power Company is a "significant
subsidiary," as such term is defined in Rule 405 of the Securities Act (each, a
"SIGNIFICANT SUBSIDIARY").
(f) CAPITALIZATION. The Company has an authorized capitalization
as set forth in the Company's consolidated statement of capitalization as of
December 31, 2000 incorporated by reference in the Prospectus; all of the issued
shares of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; all of the issued shares of
capital stock or other ownership interests of each subsidiary of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all shares of the issued and outstanding common stock of the
Company's Significant Subsidiaries are owned by the Company; and all shares of
capital stock or other ownership interests of each subsidiary of the Company
which are owned, directly or indirectly, by the Company are so owned free and
clear of all liens, encumbrances, equities, claims or adverse interests
(collectively, "LIENS") of any nature. There has been no change in the
outstanding capital stock of the Company or any of its subsidiaries since
September 30, 2001 in the Prospectus except with respect to changes in
outstanding Common Stock resulting from transactions relating to employee
benefit plans, non-employee director plans or the common stock investment plan
existing on the date hereof.
(g) ABSENCE OF PROCEEDINGS. Except as described in the Prospectus,
there are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if determined adversely
to the Company or such subsidiary, would be reasonably likely to result in a
4
Material Adverse Effect; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(h) ABSENCE OF DEFAULTS. Except circumstances which are not
reasonably likely, individually or in the aggregate, to result in a Material
Adverse Effect, neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is in violation of any
law, ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit relating to
the ownership of its property or to the conduct of its business.
(i) REGISTRATION RIGHTS. Except as described in the Prospectus,
there are no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company owned or to be owned by such person.
(j) NO MATERIAL LOSS; NO MATERIAL ADVERSE CHANGE. Except as set
forth in or contemplated by the Prospectus, (i) neither the Company nor any of
its subsidiaries has sustained, since the date of the latest audited financial
statements included in the Prospectus, any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree (a "MATERIAL LOSS"); and, (ii) since such date, there has not
been any change in the capital stock, short-term debt or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development reasonably likely to result in a material adverse change, in or
affecting the business, general affairs, management, consolidated financial
position, stockholders' equity, or results of operations of the Company and its
subsidiaries considered as a whole (a "MATERIAL ADVERSE CHANGE").
(k) FINANCIAL STATEMENTS. The financial statements (including the
related notes and supporting schedules) incorporated by reference in the
Prospectus (and any supplement thereto) present fairly the financial condition,
the results of operations and the changes in financial position of the Company
and its consolidated subsidiaries on the basis stated therein at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied, except as noted therein,
throughout the periods involved; the supporting schedules, if any, incorporated
by reference in the
5
Prospectus present fairly in accordance with generally accepted accounting
principles the information required to be stated therein; and the other
financial and statistical information and data set forth or incorporated by
reference in the Prospectus (and any supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(l) INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP (the
"ACCOUNTANTS"), who have certified the financial statements of the Company and
whose report is incorporated by reference in the Prospectus are independent
public accountants as required by the Securities Act; and the Accountants were
independent accountants as required by the Securities Act during the periods
covered by the financial statements on which they reported.
(m) TITLE TO PROPERTY. The Company and its Significant
Subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects, except such as are
(i) described or referred to in the Prospectus or (ii) do not, individually or
in the aggregate, affect the value of such property or interfere with the use
made and proposed to be made of such property to such extent as might reasonably
be expected to result in a Material Adverse Effect; and all assets held under
lease by the Company and its Significant Subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions as are not
material to the Company and its subsidiaries considered as a whole, and such
leases do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its Significant Subsidiaries to such
extent as would be reasonably likely to result in a Material Adverse Effect.
(n) POSSESSION OF LICENSES AND PERMITS. Each of the Company and
its Significant Subsidiaries has such permits, licenses, consents, exemptions,
franchises, authorizations and other approvals (each, an "AUTHORIZATION") of,
and has made all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable environmental
law, ordinance, rule, regulation, order, judgment, decree or permit, as are
necessary to own, lease, license and operate its respective properties and to
conduct its business, except where the failure to have any such Authorization or
to make any such filing or notice would not have a Material Adverse Effect.
Except for circumstances which are not reasonably likely to result in a Material
Adverse Effect, (i) each such Authorization is valid and in full force and
effect and each of the Company and its Significant Subsidiaries, as the case may
be, is in compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; (ii) no event has occurred (including,
without limitation, the receipt of any notice from any authority or governing
body) which allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such
6
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and (iii) except as disclosed in the Prospectus, such Authorizations contain no
restrictions that are burdensome to the Company or any of its Significant
Subsidiaries.
(o) NO MATERIAL TRANSACTIONS, ETC.. Since the date as of which
information is given in the Prospectus and except as otherwise disclosed in the
Prospectus, (i) neither the Company nor any of its Significant Subsidiaries has
incurred any liability or obligation, direct or contingent, or entered into any
transaction which liability, obligation or transaction is (A) not in the
ordinary course of business and (B) material with respect to the Company and its
subsidiaries considered as a whole, and (ii) the Company has not declared or
paid any dividend on any of its capital stock except for dividends on the Common
Stock in amounts per share that are consistent with past practice.
(p) AUTHORIZATION AND DESCRIPTION OF UNDERWRITING AGREEMENT. The
Company has all power and authority necessary to execute and deliver this
Agreement and perform its obligations hereunder; this Agreement and the
transactions contemplated hereby have been duly authorized by the Company; this
Agreement has been duly executed and delivered by the Company, and this
Agreement conforms in all material respects to the description thereof contained
in the Prospectus.
(q) AUTHORIZATION AND DESCRIPTION OF PURCHASE CONTRACT AGREEMENT.
The Company has all power and authority necessary to execute and deliver the
Purchase Contract Agreement and perform its obligations thereunder; the Purchase
Contract Agreement and the transactions contemplated thereby have been duly
authorized by the Company; the Purchase Contract Agreement has been duly
executed and delivered by the Company and, assuming due authorization, execution
and delivery by the Purchase Contract Agent, it constitutes a legally valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing; and the Purchase Contract Agreement will conform, when
executed and delivered, in all material respects to the description thereof
contained in the Prospectus.
(r) AUTHORIZATION AND DESCRIPTION OF CORPORATE PIES. The Corporate
PIES, when duly executed and delivered by the Company (assuming due execution by
the Purchase Contract Agent as attorney-in-fact for the holders thereof and due
authentication by the Purchase Contract Agent) and, upon payment therefor as set
forth herein, will be duly and validly issued and outstanding, and will
constitute legally valid and binding obligations of the Company, entitled to the
benefits of the Purchase Contract Agreement and
7
enforceable against the Company in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing; and
the Corporate PIES will conform, when issued, in all material respects to the
description thereof contained in the Prospectus.
(s) AUTHORIZATION AND DESCRIPTION OF TREASURY PIES. The Treasury
PIES, when duly executed and delivered by the Company (assuming due execution by
the Purchase Contract Agent as attorney-in-fact for the holders thereof and due
authentication by the Purchase Contract Agent) and, if there is a substitution
of the requisite number of Treasury Securities for the applicable Senior Notes
as set forth in the Prospectus, will be duly and validly issued and outstanding,
and will constitute legally valid and binding obligations of the Company,
entitled to the benefits of the Purchase Contract Agreement and enforceable
against the Company in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing; and the Treasury PIES
will conform, when issued, to the description thereof contained in the
Prospectus.
(t) AUTHORIZATION AND DESCRIPTION OF INDENTURE. The Company had
all necessary power and authority to execute and deliver the Original Indenture,
has all necessary power and authority to execute and deliver the Officers'
Certificate, and had and continues to have all necessary power and authority to
perform its obligations under the Indenture; the Indenture and the transactions
contemplated thereby have been duly authorized by the Company; the Indenture has
been duly executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, it constitutes a legally valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing; the Indenture has been duly qualified under the Trust
Indenture Act; and the Indenture conforms in all material respects to the
description thereof contained in the Prospectus.
(u) AUTHORIZATION AND DESCRIPTION OF SENIOR NOTES. The Senior
Notes, when duly executed, authenticated, issued and delivered as contemplated
by the Indenture against payment of the agreed consideration therefor, will be
duly and validly issued and outstanding, and will constitute legally valid and
binding obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms, subject to
the
8
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing; and
the Senior Notes will conform, when issued, in all material respects to the
description thereof contained in the Prospectus.
(v) AUTHORIZATION AND DESCRIPTION OF PLEDGE AGREEMENT. The Company
has all necessary power and authority to execute and deliver the Pledge
Agreement and perform its obligations thereunder; the Pledge Agreement and the
transactions contemplated thereby have been duly authorized by the Company; the
Pledge Agreement has been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery by the Purchase Contract
Agent, the Securities Intermediary and the Collateral Agent, it constitutes a
legally valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; and the Pledge Agreement will
conform, when executed and delivered, in all material respects to the
description thereof contained in the Prospectus.
(w) AUTHORIZATION AND DESCRIPTION OF REMARKETING AGREEMENT. The
Company has all necessary power and authority to execute and deliver the
Remarketing Agreement and perform its obligations thereunder; the Remarketing
Agreement and the transactions contemplated thereby have been duly authorized by
the Company and, assuming due authorization, execution and delivery by the
Remarketing Agent, it constitutes a legally valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to the effect of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing, and
except with respect to the rights of indemnification and contribution hereunder,
where enforcement hereof may be limited by federal or state securities laws or
the policies underlying such laws; the Remarketing Agreement has been duly
executed and delivered by the Company; and the Remarketing Agreement will
conform, when executed and delivered, in all material respects to the
description thereof contained in the Prospectus.
(x) UNISSUED SHARES. The unissued shares of common stock to be
issued and sold by the Company upon settlement of the Purchase Contracts have
been duly authorized and reserved for issuance and, when issued and delivered in
accordance with the provisions of the Purchase Contracts, will be duly and
validly issued, fully paid and non-assessable and will conform in all material
respects to the description thereof contained in the Prospectus.
9
(y) PREEMPTIVE RIGHTS. Except as described in the Prospectus,
there are no preemptive or other rights to subscribe for or to purchase, nor is
there any restriction on the voting or transfer of, any of the Corporate PIES,
the Treasury PIES, the Stock Purchase Contracts, the Senior Notes or any shares
of Common Stock (collectively, the "SECURITIES") pursuant to the Company's
articles of incorporation or by-laws or any agreement or instrument, except such
preemptive or other rights and/or restrictions as relate to the transactions
contemplated by the Stock Purchase Agreement, the Pledge Agreement and the
Indenture.
(z) ABSENCE OF DEFAULTS AND CONFLICTS. The execution, delivery and
performance of this Underwriting Agreement, the Purchase Contract Agreement, the
Indenture, the Pledge Agreement and the Remarketing Agreement (collectively, the
"TRANSACTION AGREEMENTS") and the consummation by the Company of the
transactions contemplated hereby and thereby, including without limitation the
issuance, delivery and sale of the Securities (collectively, the
"TRANSACTIONS"), do not and will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is subject, which
would be reasonably likely to result in a Material Adverse Effect, (ii) result
in any violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries, (iii) result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets, which would be reasonably likely to result in a
Material Adverse Effect or (iv) require any material consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body for the consummation of the Transactions except for
(A) the registration of the Securities under the Securities Act, (B) the
qualification of the Indenture under the Trust Indenture Act and (C) such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase of the Corporate PIES (and the securities which are
components of the Corporate PIES as set forth above) by the Underwriters
pursuant to this Underwriting Agreement.
(aa) INVESTMENT COMPANY ACT. Neither the Company nor any
subsidiary is or, as of the applicable Delivery Date after giving effect to the
issuance of the Corporate PIES and the application of the net proceeds therefrom
as described in the Prospectus, will be an "investment company" as defined under
the Investment Company Act of 1940, as amended, and the rules and regulations of
the Commission thereunder.
(bb) PUBLIC UTILITY HOLDING COMPANY ACT. The Company is a "holding
company" under the Public Utility Holding Company Act of 1935, as amended (the
"HOLDING COMPANY ACT"), but, pursuant to Section 3(a)(1) of the Holding Company
Act, is exempt from all provisions of the Holding
10
Company Act except Section 9(a)(2) thereof.
(cc) RULE 501(B). Neither the Company, nor to its knowledge, any
of its Affiliates (as defined in Rule 501(b) of Regulation D, an "AFFILIATE"),
has taken, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Corporate PIES to facilitate
the sale or resale of such securities.
(dd) OFFICER'S CERTIFICATE. Each certificate signed by any officer
of the Company and delivered to the Underwriters or counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
(ee) CERTAIN ACCOUNTING INFORMATION. The information under
"Accounting Treatment" in the Prospectus, insofar as such information purports
to state generally accepted accounting principles, is correct in all material
respects.
2. PURCHASE OF THE CORPORATE PIES BY THE UNDERWRITERS. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to issue and sell 6,000,000
Firm Corporate PIES to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of Firm Corporate PIES
set forth opposite that Underwriter's name in Schedule 1 hereto.
In addition, the Company grants to the Underwriters an option to purchase
up to 900,000 Option Corporate PIES. Such option is granted for the purpose of
covering over-allotments in the sale of Firm Corporate PIES and is exercisable
as provided in Section 4 hereof. The number of Option Corporate PIES may be
purchased severally for the account of the Underwriters in proportion to the
number of Firm Corporate PIES set forth opposite the name of such Underwriters
in Schedule 1 hereto.
The price of both the Firm Corporate PIES and any Option Corporate PIES
shall be 97% of the stated amount thereof plus an amount equal to any purchase
contract adjustment payments under the Purchase Contracts, and any interest on
the Senior Notes, accrued after November 16, 2001.
The Company shall not be obligated to deliver any of the Corporate PIES to
be delivered on any Delivery Date (as hereinafter defined), except upon payment
for all the Corporate PIES to be purchased on such Delivery Date as provided
herein.
3. OFFERING OF CORPORATE PIES BY THE UNDERWRITERS. The several
Underwriters propose to offer the Firm Corporate PIES for sale upon the terms
and conditions set forth in the Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE CORPORATE PIES. At 10:00 a.m.,
Eastern Standard Time, on the fourth full business day following the date of
this Agreement, or at such other time or date as shall be determined by
agreement between ▇▇▇▇▇▇ Brothers Inc. and the
11
Company (such time and date being referred to as the "FIRST DELIVERY DATE"), the
Company shall deliver or cause to be delivered, against payment, the Firm
Corporate PIES in the form of one or more global securities ("GLOBAL
SECURITIES") deposited with the Trustee, as custodian for The Depository Trust
Company ("DTC"), and registered in the name of Cede & Co., as nominee for DTC,
to be held by DTC initially for the accounts of the several Underwriters.
Contemporaneously, ▇▇▇▇▇▇ Brothers Inc., on behalf of the several Underwriters,
shall make payment of the purchase price of the Firm Corporate PIES by wire
transfer, in immediately available funds, to or upon the order of the Company.
Delivery of such Global Securities, as set forth above, shall be made to the
Trustee at the offices of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇. The Company shall make the Global Securities representing the
Firm Corporate PIES available for inspection by the Underwriters at such offices
of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP specified above not later than 2:00 p.m., Eastern
Standard Time, on the business day prior to the First Delivery Date.
The option granted in Section 2 must be consummated within 13 days after
the date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Company by ▇▇▇▇▇▇ Brothers Inc. Such
notice shall set forth the number (which shall be an integral multiple of 20) of
Option Corporate PIES as to which the option is being exercised and the date and
time, as determined by ▇▇▇▇▇▇ Brothers Inc., when the Option Corporate PIES are
to be delivered; PROVIDED, HOWEVER, that this date and time shall not be earlier
than the First Delivery Date nor earlier than the second business day after the
date on which the option shall have been exercised nor later than the fifth
business day after the date on which the option shall have been exercised. The
date and time the Option Corporate PIES are delivered are referred to as a
"SECOND DELIVERY DATE" and the First Delivery Date and any Second Delivery Date
are sometimes each referred to as a "DELIVERY DATE."
At 10:00 a.m., Eastern Standard Time on the Second Delivery Date, or at
such other time as shall be determined by agreement between ▇▇▇▇▇▇ Brothers Inc.
and the Company, the Company shall deliver or cause to be delivered, against
payment, the Option Corporate PIES in the form of one or more Global Securities
deposited with the Trustee, as custodian for DTC, and registered in the name of
Cede & Co., as nominee for DTC, to be held by DTC initially for the accounts of
the several Underwriters. Contemporaneously, ▇▇▇▇▇▇ Brothers Inc., on behalf of
the several Underwriters, shall make payment of the purchase price of the Option
Corporate PIES by wire transfer, in immediately available funds, to or upon the
order of the Company. Delivery of such Global Securities, as aforesaid, shall be
made at the offices of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP specified above.
Time shall be of the essence, and delivery of Corporate PIES at the times
and place specified in this Agreement are further conditions of the obligations
of each Underwriter hereunder.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. To prepare the Prospectus in a form approved by ▇▇▇▇▇▇ Brothers Inc.
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than Commission's close of business on the second business day following
12
the execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus prior to the last Delivery Date except as permitted herein; to advise
the Underwriters, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective
or any supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Underwriters with copies thereof; to file timely all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Corporate PIES; to advise the Underwriters, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Corporate PIES for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending any such qualification, to use promptly its
reasonable best efforts to obtain its withdrawal;
(b) DELIVERY OF REGISTRATION STATEMENTS. To furnish promptly to
the Underwriters and to counsel for the Underwriters a signed copy of the
Registration Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) DELIVERY OF DOCUMENTS. To deliver promptly to the Underwriters
such number of the following documents as the Underwriters shall reasonably
request: (i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding exhibits)
and (ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required at any
time after the Effective Time in connection with the offering or sale of the
Corporate PIES or any other securities relating thereto and if at such time any
events shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply with the Securities
Act, to notify the Underwriters and, upon their request, to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as the Underwriters may from time to time reasonably request
13
of an amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) FILING OF AMENDMENTS. To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or any supplement to
the Prospectus that may, in the judgment of the Company or ▇▇▇▇▇▇ Brothers Inc.,
be required by the Securities Act or is requested by the Commission;
(e) DELIVERY TO UNDERWRITERS. Prior to filing with the Commission
any amendment to the Registration Statement or supplement to the Prospectus or
any Prospectus any document incorporated by reference in the Prospectus pursuant
to Rule 424 of the Securities Act, to furnish a copy thereof to the Underwriters
and counsel for the Underwriters and obtain the consent of ▇▇▇▇▇▇ Brothers Inc.
to the filing (which consent shall not be unreasonably withheld);
(f) EARNING STATEMENT. As soon as practicable after the Effective
Date, to make generally available to the Company's security holders and to
deliver to the Underwriters an earning statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158 of the
Securities Act);
(g) BLUE SKY. Promptly from time to time, to take such action as
▇▇▇▇▇▇ Brothers Inc. may reasonably request to qualify the Corporate PIES for
offering and sale under the securities laws of such jurisdictions as ▇▇▇▇▇▇
Brothers Inc. may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of the Corporate PIES; PROVIDED
THAT, in connection therewith, the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(h) COMPANY REPORTS. For a period of two years following the First
Delivery Date, to furnish to the Underwriters copies of all materials furnished
by the Company to its stockholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act; PROVIDED, HOWEVER, that the Company shall not be required
to provide the Underwriters with any such reports or similar forms that have
been filed with the Commission by electronic transmission pursuant to ▇▇▇▇▇;
(i) LISTING. To use its best efforts to have the Corporate PIES
and the shares of Common Stock to be issued and sold upon settlement of the
Purchase Contracts approved by the New York Stock Exchange ("NYSE") for listing
prior to the First Delivery Date; and, if either the Treasury PIES or the Senior
Notes are traded at a volume that satisfies applicable exchange listing
requirements, to use
14
its reasonable best efforts to list such securities on the national securities
exchanges or associations on which the Corporate PIES are then listed;
(j) PRICE STABILIZATION. Not to take, directly or indirectly, any
action which is designed to stabilize or manipulate, or which constitutes or
which might reasonably be expected to cause or result in stabilization or
manipulation, of the price of any security of the Company in connection with the
offering of the Corporate PIES;
(k) DTC. To use its best efforts to cause the Corporate PIES to be
accepted for clearance and settlement through the facilities of DTC;
(l) USE OF PROCEEDS. To apply the net proceeds from the issuance
of the Corporate PIES as set forth under "Use of Proceeds" in the Prospectus;
and
(m) INVESTMENT COMPANY ACT. To take such steps as shall be
necessary to ensure that neither the Company nor any of its subsidiaries shall
become an "investment company" as defined, and subject to regulation, under the
Investment Company Act.
(n) RESTRICTION ON SALE OF SECURITIES. Without the prior written
consent of ▇▇▇▇▇▇ Brothers Inc., on behalf of the Underwriters, the undersigned
will not, directly or indirectly, (i) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or any securities convertible into or
exchangeable for Common Stock or substantially similar securities (other than
the shares of Common Stock to be issued and sold upon settlement of the Purchase
Contracts and shares issued in the ordinary course pursuant to employee benefit
plans, non-employee director plans or the common stock investment plan or
options, warrants or rights outstanding on the date hereof, Treasury PIES or
Corporate PIES that may be created or recreated upon substitution of pledged
securities or Common Stock issuable upon early settlement of the Corporate PIES
or Treasury PIES) or sell or grant options, warrants or rights with respect to
any shares of Common Stock, securities convertible into or exchangeable for
Common Stock or substantially similar securities (other than the grant of
options, warrants or rights pursuant to option plans existing on the date
hereof), or (ii) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such shares of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, for a period of 90 days after
the date of the Prospectus.
6. EXPENSES. The Company agrees to pay the following expenses, whether
or not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated (other than pursuant to Section 10):
15
(a) the costs incident to the authorization, issuance, sale and
delivery of the Corporate PIES and their components and any taxes payable in
that connection;
(b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto;
(c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, in each case, as
provided in this Agreement;
(d) the costs of distributing the terms of any agreement relating
to the organization of the underwriting syndicate and selling group to the
members thereof, by mail, telex or other means of communication;
(e) the filing fees incident to securing any review by the
National Association of Securities Dealers, Inc. of the terms of sale of the
Corporate PIES and any applicable listing or other fees including all fees and
expenses in connection with the application for the listing on the NYSE of the
Corporate PIES and the shares of Common Stock to be issued and sold by the
Company upon the settlement of the Purchase Contracts, as well as the fees and
expenses in connection with any application for the listing on any national
securities exchange of the Treasury PIES or the Senior Notes;
(f) the fees and expenses of qualifying the Corporate PIES and
their components under the securities laws of the several jurisdictions as
provided in Section 5(g) and of preparing, printing and distributing a U.S. and
a Canadian Blue Sky memorandum (including related fees and expenses of counsel
to the Underwriters);
(g) all costs and expenses incident to the preparation of "road
show" presentation or comparable marketing materials and the road show
travelling expenses of the Company in connection with the offering of the
Corporate PIES;
(h) all fees and expenses incurred in connection with obtaining
ratings of the Corporate PIES by securities rating agencies;
(i) all expenses of the Company (including the fees and
disbursements of counsel to the Company) and all fees and expenses of the
Accountants, the Trustee and the Purchase Contract Agent (including the costs
and charges of any registrar, transfer agent or paying agent under the Indenture
or the Purchase Contract Agreement), the Collateral Agent and the Securities
Intermediary, and the Remarketing Agent; and
16
(j) all other costs and expenses incident to the performance of
the obligations of the Company under this Agreement;
PROVIDED THAT, except as provided in this Section 6 and in Section 11 the
Underwriters shall pay their own costs and expenses, including the fees and
disbursements of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
co-counsel to the Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder and to
each of the following additional terms and conditions:
(a) SEC MATTERS. The Prospectus shall have been timely filed with
the Commission in accordance with Section 5(a) of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) NO MISSTATEMENTS OR OMISSIONS. No Underwriter shall have
discovered and disclosed to the Company on or prior to such Delivery Date that
the Registration Statement, the Prospectus or any amendment or supplement
thereto, in the view of either ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, co-counsel for the Underwriters, contains an untrue statement of any
fact which is material or omits to state a fact which is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(c) CORPORATE PROCEEDINGS. All corporate proceedings and other
legal matters incident to the authorization, form and validity of the
Registration Statement, the Prospectus, the Transaction Agreements, the
Corporate PIES, and all other legal matters relating to the offering, issuance
and sale of the Corporate PIES and the transactions contemplated hereby and
thereby shall be reasonably satisfactory in all material respects to co-counsel
to the Underwriters; and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters.
(d) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Underwriters shall have received (i) an agreement substantially in the form of
Annex A hereto signed by the persons listed on Schedule 2 hereto and (ii) a copy
of the waiver by ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as
representative of the several underwriters named in the Purchase Agreement,
dated August 9, 2001, among the Company and such underwriters, of the provisions
of Section 3(j) of such Purchase Agreement insofar as such provisions would
prohibit the Company from entering into the transactions contemplated by this
Agreement.
17
(e) OPINIONS OF COUNSEL FOR COMPANY. ▇▇▇▇▇▇ Hall & ▇▇▇▇▇▇▇,
special counsel to the Company, and ▇▇▇▇▇▇▇▇ and Wedge, Nevada counsel to the
Company, shall have furnished to the Underwriters their written opinions, as
counsel to the Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to ▇▇▇▇▇▇ Brothers Inc. and
substantially to the effect set forth in the composite form of opinion contained
in Annex B.
(f) OPINION OF COUNSEL FOR PURCHASE CONTRACT AGENT AND TRUSTEE.
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the Purchase Contract Agent and the Trustee,
shall have furnished to the Underwriters their written opinion addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to ▇▇▇▇▇▇ Brothers Inc. and substantially to the effect set forth
in Annex C.
(g) OPINION OF COUNSEL FOR COLLATERAL AGENT AND SECURITIES
INTERMEDIARY. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Collateral Agent and the
Securities Intermediary, shall have furnished to the Underwriters their written
opinion addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to ▇▇▇▇▇▇ Brothers Inc. and substantially to
the effect set forth in Annex D.
(h) OPINIONS OF COUNSEL FOR UNDERWRITERS. ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have furnished to the Underwriters their
written opinions, as counsel to the Underwriters, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory to
▇▇▇▇▇▇ Brothers Inc.
(i) ACCOUNTANTS' COMFORT LETTER. The Underwriters shall have
received from the Accountants a letter, in form and substance reasonably
satisfactory to ▇▇▇▇▇▇ Brothers Inc., addressed to the Underwriters and dated
such Delivery Date and substantially to the effect set forth in Annex E.
(j) OFFICERS' CERTIFICATES. The Company shall have furnished to
the Underwriters a certificate, dated such Delivery Date, of the President, the
Treasurer or any Vice President of the Company together with its chief financial
officer, in form and substance reasonably satisfactory to ▇▇▇▇▇▇ Brothers Inc.
stating that:
(i) the representations, warranties and agreements of the
Company in Section 1 of this Agreement are true and correct as of the date of
this Agreement and as of such Delivery Date; the Company has complied in all
material respects with all its agreements contained herein to be performed prior
to or on such Delivery Date; and no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission;
18
(ii) since the respective dates as of which information is
given in the Prospectus and other than as set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement), (A) there has not occurred any Material Adverse Change or any
development that is reasonably likely to result in a Material Adverse Change,
(B) there has not been any change in the capital stock, the short-term debt, or
the long-term debt of the Company or any of its subsidiaries that is reasonably
likely to result in a Material Adverse Effect, (C) neither the Company nor any
of its subsidiaries has incurred any liability or obligation, direct or
contingent, which is material with respect to the Company and its subsidiaries
considered as a whole and (D) no Material Loss has occurred; and
(iii) they have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and (B) since
the Effective Date no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the Prospectus.
(k) SENIOR NOTES. The Senior Notes shall have been duly executed
and delivered by the Company and duly authenticated by the Trustee.
(l) CORPORATE PIES. The Corporate PIES and the Treasury PIES shall
have been duly executed and delivered by the Company and duly authenticated by
the Purchase Contract Agent.
(m) OTHER INFORMATION. The Company shall have furnished to the
Underwriters such further information, certificates and documents as the
Underwriters may reasonably request to evidence compliance with the conditions
set forth in this Section 7.
(n) NO MATERIAL ADVERSE DEVELOPMENTS. Except as disclosed in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (A) neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial statements
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree and (B) since such date there shall not have been any change or any
development reasonably likely result in a change, in or affecting the business,
general affairs, management, condition (financial or otherwise), stockholders'
equity or results of operations of the Company and its subsidiaries, the effect
of which, in any such case described in clause (A) or (B), is, in the judgment
of ▇▇▇▇▇▇ Brothers Inc., so material (with respect to the Company and its
19
subsidiaries taken as a whole) and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Corporate
PIES being delivered on the applicable Delivery Date on the terms and in the
manner contemplated in the Prospectus and this Agreement.
(o) NO DOWNGRADE. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded the
debt securities or preferred stock of the Company or any of its Significant
Subsidiaries by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Securities Act and (ii) no such organization shall have publicly announced, or
privately informed the Company, that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities or preferred stock.
(p) GENERAL MARKET OUT. Subsequent to the execution and delivery
of this Agreement, there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange, the NASDAQ or the over-the-counter market, or trading in any
securities of the Company on any exchange, shall have been suspended or the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States, (iii) the United States shall have become engaged in hostilities, there
shall have been an escalation in hostilities involving the United States, there
shall have been a declaration of a national emergency or war by the United
States, an act of terrorism shall have been committed against the United States
or any of its nationals or properties or (iv) there shall have occurred such a
calamity or crisis or such a material adverse change in general domestic or
international economic, political or financial conditions, including without
limitation as a result of terrorist activities (or the effect of international
conditions on the financial markets in the United States shall be such) as to
make it, in the judgment of ▇▇▇▇▇▇ Brothers Inc., impracticable or inadvisable
to proceed with the public offering or delivery of the Corporate PIES being
delivered on such Delivery Date on the terms and in the manner contemplated in
the Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel to the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company shall indemnify
and hold harmless each Underwriter, its officers and employees, each of its
20
directors, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of the Corporate PIES), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any (A) Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B)
any blue sky application or other document prepared or executed by the Company
(or based upon any written information furnished by the Company) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Corporate PIES under the securities laws of any state or other jurisdiction
(such application, document or information being hereinafter called a "BLUE SKY
APPLICATION"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or in any amendment or
supplement thereto or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Corporate PIES
or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (PROVIDED THAT, the
Company shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failure to act undertaken or omitted to be taken by such Underwriter through its
gross negligence or willful misconduct), and shall reimburse each Underwriter
and each such officer, employee, director or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with the
written information concerning such Underwriter furnished to the Company through
▇▇▇▇▇▇ Brothers Inc. by or on behalf of any Underwriter specifically for
inclusion therein which information consists solely of the information specified
in Section 8(e); and provided, further, that the Company shall not be liable to
indemnify any Underwriter or any person who controls such Underwriter on account
of any such loss, liability, claim, damage or expense arising out of any such
defect or alleged defect in any Preliminary Prospectus if a copy of the
Prospectus (exclusive of the Incorporated Documents) shall not have been given
21
or sent by such Underwriter with or prior to the written confirmation of the
sale involved to the extent that (i) the Prospectus would have cured such defect
or alleged defect and (ii) sufficient quantities of the Prospectus were timely
made available to such Underwriter. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each
Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, its officers and employees, each of its directors, and each person, if
any, who controls the Company within the meaning of the Securities Act from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or in any Blue Sky
Application or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto or in any Blue Sky Application, any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the written information furnished to the Company through ▇▇▇▇▇▇
Brothers Inc. by or on behalf of that Underwriter specifically for inclusion
therein and described in Section 8(c), and shall reimburse the Company and any
such director, officer or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which any Underwriter may otherwise have to the Company or any
such director, officer, employee or controlling person.
(c) NOTIFICATION; ACTION AGAINST PARTIES; SETTLEMENT WITHOUT
CONSENT IF FAILURE TO REIMBURSE. Promptly after receipt by an indemnified party
under this Section 8 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, PROVIDED, FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying
22
party thereof, the indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; PROVIDED, HOWEVER, that the Underwriters shall have the
right to employ separate counsel to represent jointly the Underwriters and their
respective officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Underwriters against the Company under this Section 8 if, in the
reasonable judgment of such Underwriters, it is advisable for such Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. No indemnifying party shall, (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party shall indemnify and hold harmless any indemnified party from
and against any loss or liability by reason of such settlement or judgment.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 8 shall for any reason be unavailable or insufficient to hold harmless
an indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each 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 loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Corporate PIES or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same
23
proportion as the total net proceeds from the offering of the Corporate PIES
purchased under this Agreement (before deducting expenses) received by the
Company, on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the Corporate PIES purchased under
this Agreement, on the other hand, bear to the total gross proceeds from the
offering of the Corporate PIES under this Agreement, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for purposes of
this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Corporate PIES underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
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 Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
(e) INFORMATION FURNISHED BY UNDERWRITERS. The Underwriters
severally confirm that the statements in the last paragraph on the cover page of
the Prospectus and the third, seventh, eighth, eleventh and fifteenth paragraphs
under the caption "Underwriting" in the Prospectus are correct; and the
Underwriters severally further confirm, and the Company acknowledges, that such
statements constitute the only information concerning such Underwriters
furnished in writing to the Company through ▇▇▇▇▇▇ Brothers Inc. by or on behalf
of the Underwriters specifically for inclusion in the Registration Statement and
the Prospectus.
9. DEFAULTING UNDERWRITERS. If, on any Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the
principal amount of Corporate PIES which the defaulting Underwriter agreed but
failed to purchase on such Delivery Date in the
24
respective proportions which the principal amount of the Firm Corporate PIES set
forth opposite the name of each remaining non-defaulting Underwriter in Schedule
1 hereto bears to the aggregate principal amount of Firm Corporate PIES set
forth opposite the names of all the remaining non-defaulting Underwriters in
Schedule 1 hereto; PROVIDED, HOWEVER, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Corporate PIES on
such Delivery Date if the total aggregate principal amount of the Corporate PIES
which the defaulting Underwriter or Underwriters agreed but failed to purchase
on such date exceeds 9.09% of the total aggregate principal amount of the
Corporate PIES to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the total aggregate principal amount of the Corporate PIES which it agreed to
purchase on such Delivery Date pursuant to the terms of Section 3. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to ▇▇▇▇▇▇ Brothers Inc. who so agree,
shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, the total aggregate principal
amount of Corporate PIES to be purchased on such Delivery Date. If the remaining
Underwriters or other underwriters satisfactory to ▇▇▇▇▇▇ Brothers Inc. do not
elect to purchase on such Delivery Date the aggregate principal amount of
Corporate PIES which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such Delivery Date, this Agreement (or, with respect to
the Option Delivery Date, the obligation of the Underwriters to purchase, and of
the Company to sell, the Option Corporate PIES) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 6 and 11. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 9, purchases Corporate PIES which a defaulting Underwriter agreed
but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Corporate PIES of a
defaulting or withdrawing Underwriter, either ▇▇▇▇▇▇ Brothers Inc. or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel to the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
10. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Corporate PIES if, prior to that time,
any of the events described in Sections 7(n), 7(o) or 7(p) shall have occurred
or if the Underwriters shall decline to purchase the Firm Corporate PIES for any
reason permitted under this Agreement.
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company shall
fail to tender the Corporate PIES for delivery to the Underwriters by reason of
any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company
(including, without limitation, with respect to the transactions) is not
fulfilled or (b) the Underwriters shall decline to purchase the Corporate PIES
for any reason permitted under
25
this Agreement (including the termination of this Agreement pursuant to Section
10), the Company shall reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Corporate PIES, and upon demand the Company shall pay the full amount
thereof to the Underwriters. If this Agreement is terminated pursuant to Section
9 by reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
12. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇),
with a copy, in the case of any notice pursuant to Section 8(c), to the ▇▇▇▇▇▇
Brothers Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: Office of
the General Counsel (Fax: ▇▇▇-▇▇▇-▇▇▇▇) with copies to ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP,
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇; Telephone: ▇▇▇-▇▇▇-▇▇▇▇) and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇; Telephone: ▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, (Fax: ▇▇▇-▇▇▇-▇▇▇▇)
Telephone: (▇▇▇-▇▇▇-▇▇▇▇); with a copy to ▇▇▇▇▇▇ Hall & ▇▇▇▇▇▇▇, Exchange Place,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(Fax: ▇▇▇-▇▇▇-▇▇▇▇; Telephone: ▇▇▇-▇▇▇-▇▇▇▇);
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to ▇▇▇▇▇▇ Brothers
Inc., which address will be supplied to any other party hereto by ▇▇▇▇▇▇
Brothers Inc. upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Company shall be entitled
to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, 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 directors,
officers and employees of the Underwriters and the person or persons, if any,
who control any Underwriter within the meaning of Section 15 of the Securities
Act and (B) any indemnity agreement of the Underwriters contained in Section
8(b) of this Agreement shall be deemed to be for the benefit of directors,
officers and employees of the Company, and any person controlling the Company
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement
26
is intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. SURVIVAL. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Corporate PIES and shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any of them or any person
controlling any of them.
15. DEFINITION OF THE TERM "BUSINESS DAY". For purposes of this
Agreement, "BUSINESS DAY" means any day on which the New York Stock Exchange,
Inc. is open for trading.
16. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
17. CONSENT TO JURISDICTION . Each of the Underwriters and the Company
hereby submits to the jurisdiction of the courts of the State of New York and
the courts of the United States of America located in the State of New York over
any suit, action or proceeding with respect to this Agreement or the
transactions contemplated hereby.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
20. UNDERWRITERS' COUNSEL. The Company and the Underwriters acknowledge
that ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP (a) has acted or will act as counsel to the
Underwriters in connection with this agreement and the transactions contemplated
hereby and (b) has acted, and will continue to act, as counsel to Sierra Pacific
Resources and its utility subsidiaries in connection with certain federal income
tax matters, and each of the Company and the Underwriters consents to such dual
representation.
27
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
SIERRA PACIFIC RESOURCES
By:
-----------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇ SACHS & CO.
FIRST UNION SECURITIES, INC.
By ▇▇▇▇▇▇ BROTHERS INC.
By:
----------------------------------
AUTHORIZED REPRESENTATIVE
28
SCHEDULE 1
NUMBER OF FIRM
CORPORATE PIES TO BE
UNDERWRITER PURCHASED
▇▇▇▇▇▇ Brothers Inc...................................... 3,300,000
---------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated............................. 1,200,000
---------
▇▇▇▇▇▇▇ Sachs & Co....................................... 900,000
---------
First Union Securities, Inc.............................. 600,000
---------
TOTAL........................................... 6,000,000
=========
S2-1
SCHEDULE 2
LIST OF PERSONS SUBJECT TO LOCK-UP
NAME TITLE
---- -----
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Director
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Director
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Director
▇▇▇▇▇▇▇▇ ▇. Day Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Director
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III Director, President and Chief
Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Director
▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Director
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Treasurer and Investor Relations Officer
▇▇▇▇ ▇. ▇▇▇▇▇ Controller
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ President, Sierra Pacific Power Company
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Senior Vice President Transmission and
Strategic Development
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Senior Vice President, General Counsel and
Corporate Secretary
▇▇▇▇ ▇. ▇▇▇▇▇▇ President, Nevada Power Company
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Senior Vice President and Chief Financial
Officer
S2-1
ANNEX A
LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇ SACHS & CO.
FIRST UNION SECURITIES, INC.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that you propose to enter into an
underwriting agreement (the "UNDERWRITING AGREEMENT") providing for the purchase
by you and such other firms (the "UNDERWRITERS") of 6,000,000 Corporate PIES
(the "CORPORATE PIES") of Sierra Pacific Resources, a Nevada corporation (the
"COMPANY"), and that the Underwriters propose to reoffer the Corporate PIES to
the public pursuant to the Underwriting Agreement (the "OFFERING").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of ▇▇▇▇▇▇
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of the Company's common stock, par value $1.00 per share (the "COMMON
STOCK") or any securities convertible into or exchangeable for Common Stock or
substantially similar securities (other than the shares of Common Stock to be
issued and sold upon settlement of the Purchase Contracts (as defined in the
Underwriting Agreement) and shares issued in the ordinary course pursuant to
employee benefit plans, non-employee director plans or the common stock
investment plan or options, warrants or rights outstanding on the date hereof,
Treasury PIES or Corporate PIES that may be created or recreated upon
substitution of pledged securities or Common Stock issuable upon early
settlement of the Corporate PIES or Treasury PIES) or sell or grant options,
warrants or rights with respect to any shares of Common Stock, securities
convertible into or exchangeable for Common Stock or substantially similar
securities (other than the grant of options, warrants or rights pursuant to
option plans existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
for a period of 90 days after the date of the Prospectus (as defined in the
Underwriting Agreement) offering; PROVIDED, HOWEVER, that, the restrictions set
forth above shall not apply to (i) sales of shares of Common Stock made to
satisfy loans incurred to finance the purchase of such shares of Common Stock,
if that satisfaction is required by the lender pursuant
A-1
to margin regulations and (ii) charitable donations of shares of Common Stock
that are consistent with the prior years' practice.
In furtherance of the foregoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement. Whether
or not the Offering actually occurs depends on a number of factors, including
market conditions. Any Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation between the Company and
the Underwriters. In addition, it is understood that, if the Company notifies
you that it does not intend to proceed with the Offering, if the Underwriting
Agreement does not become effective or if the Underwriting Agreement (other than
the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Corporate PIES, the
undersigned will be released from our obligations under this Lock-Up Letter
Agreement.
This Agreement shall be governed by, and construed in accordance with,
the laws of New York.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
----------------------------
Name:
Title:
A-2
Dated: November __, 2001
ANNEX B
CONTENTS OF OPINIONS OF COUNSEL FOR THE COMPANY
1. The Company and each of its Significant Subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of the State of Nevada, are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses
requires such qualification and have all corporate power and authority necessary
to own or hold their respective properties and conduct the businesses in which
they are engaged, except where the failure to so qualify or to be in good
standing would not have a Material Adverse Effect.
2. The Company has all power and authority necessary to execute and
deliver each of the Transaction Agreements, to perform its obligations
thereunder and to issue the Securities; and the Company has duly authorized,
executed and delivered each of the Transaction Agreements.
3. The execution, delivery and performance of the Transaction
Agreements, the issuance and sale of the Securities and the consummation by the
Company of the transactions contemplated thereby, including without limitation
the issuance, delivery and sale of the Securities, do not and will not (a)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its Significant Subsidiaries is a party or by which the Company or any of
its Significant Subsidiaries is bound or to which any of the properties or
assets of the Company or any of its Significant Subsidiaries is subject, which
would be reasonably likely to result in a Material Adverse Effect, (b) result in
any violation of the provisions of the charter or by-laws of the Company or any
of its Significant Subsidiaries, (c) result in any violation of any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Significant Subsidiaries or any of
their respective properties or assets, which would be reasonably likely to
result in a Material Adverse Effect, or (d) require any material consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body for the consummation of the Transactions or
the issuance and sale or exchange of the Securities, as the case may be, except
for (x) the registration of the Securities under the Securities Act, (y) the
qualification of the Indenture under the Trust Indenture Act and (z) such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase of the Corporate PIES (and the securities which are
components of the Corporate PIES as set forth above) by the Underwriters
pursuant to the Underwriting Agreement.
4. Assuming due authorization, execution and delivery of the Purchase
Contract Agreement by the Purchase Contract Agent, the Purchase Contract
Agreement constitutes a legally valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing; the
Purchase Contract
B-1
Agreement is not required to be qualified as an indenture under the Trust
Indenture Act; and the Purchase Contract Agreement conforms in all material
aspects to the description thereof contained in the Prospectus.
5. The Corporate PIES, when duly executed and delivered by the Company
(assuming due execution by the Purchase Contract Agent as attorney-in-fact for
the holders thereof and due authentication by the Purchase Contract Agent) and,
upon payment therefor as set forth in the Underwriting Agreement, will be duly
and validly issued and outstanding, and will constitute valid and binding
obligations of the Company, entitled to the benefits of the Purchase Contract
Agreement and enforceable against the Company in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing; and the Corporate PIES will conform, when issued, in all material
respects to the description thereof contained in the Prospectus.
6. The Treasury PIES, when duly executed and delivered by the Company
(assuming due execution by the Purchase Contract Agent as attorney-in-fact for
the holders thereof and due authentication by the Purchase Contract Agent) and,
if there is a substitution of the requisite number of Treasury Securities for
the applicable Senior Notes as set forth in the Prospectus Supplement, will be
duly and validly issued and outstanding, and will constitute valid and binding
obligations of the Company, entitled to the benefits of the Purchase Contract
Agreement and enforceable against the Company in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing; and the Treasury PIES will conform, when issued, to the description
thereof contained in the Prospectus.
7. Assuming due authorization, execution and delivery of the Indenture
by the Trustee, the Indenture constitutes a legally valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing; the Indenture has been duly qualified under the Trust Indenture Act;
and the Indenture conforms in all material respects to the description thereof
contained in the Prospectus.
8. The Senior Notes, when duly executed, authenticated, issued and
delivered as contemplated by the Indenture against payment of the agreed
consideration therefor, will be duly and validly issued and outstanding, and
will constitute legally valid and binding obligations of the Company, entitled
to the benefits of the Indenture and enforceable against the Company in
accordance with their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; and the Senior Notes, when
issued,
B-2
will conform in all material respects with the description thereof contained
in the Prospectus Supplement.
9. Assuming due authorization, execution and delivery of the Pledge
Agreement by the Purchase Contract Agent, the Securities Intermediary and the
Collateral Agent, the Pledge Agreement constitutes a legally valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing; and the Pledge Agreement conforms in all material respects to the
description thereof contained in the Prospectus.
10. Assuming due authorization, execution and delivery of the
Remarketing Agreement by the Remarketing Agent, the Remarketing Agreement
constitutes a legally valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing, and except with respect
to the rights of indemnification and contribution under the Underwriting
Agreement, where enforcement hereof may be limited by federal or state
securities laws or the policies underlying such laws; and the Remarketing
Agreement conforms in all material respects to the description thereof contained
in the Prospectus.
11. The provisions of the Pledge Agreement will be, on the First
Delivery Date, effective to create, in favor of the Collateral Agent for the
benefit of the Company, a valid security interest under the Uniform Commercial
Code as in effect on the date of such opinion in the State of New York (the "NEW
YORK UCC") in the Pledged Senior Notes, Applicable Ownership Interests (as
specified in clause (A) of the definition thereof in the Indenture) of the
Treasury Portfolio and Pledged Treasury Securities from time to time credited to
the Collateral Account in accordance with the Pledge Agreement. For purposes of
this opinion, capitalized terms used in this paragraph, which are not defined in
the Underwriting Agreement, shall have the meanings ascribed to such terms in
the Pledge Agreement.
12. The unissued shares of Common Stock to be issued and sold by the
Company upon settlement of the Purchase Contracts have been duly authorized and
reserved for issuance and, when issued, sold and delivered, against payment, in
accordance with the provisions of the Purchase Contracts, will be duly and
validly issued, fully paid and non-assessable and will conform in all material
respects to the description thereof contained in the Prospectus.
13. Except to the extent described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor is there any
restriction on the voting or transfer of, any of the Securities pursuant to the
Company's articles of incorporation or by-laws or any agreement or instrument,
except such preemptive or other rights and/or restrictions as relate to
B-3
the transactions contemplated by the Stock Purchase Agreement, the Pledge
Agreement and the Indenture.
14. The Registration Statement was declared effective under the
Securities Act, and the Indenture was qualified under the Trust Indenture Act at
10:00 a.m. on November 7, 2001, the Prospectus was filed with the Commission
pursuant to Rule 424(b)(1) under the Securities Act specified in such opinion on
the date specified therein; and no stop order suspending the effectiveness of
the Registration Statement has been issued and, to the best knowledge of such
counsel, no proceeding for that purpose is pending or threatened by the
Commission.
15. The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to such Delivery
Date, the Incorporated Documents and any further amendment or supplement to any
such incorporated document made by the Company prior to such Delivery Date
(other than the financial statements and related schedules therein, as to which
we express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the requirements of the Securities Act or the Exchange Act, as applicable,
and the Trust Indenture Act; and the Indenture conforms in all material respects
to the requirements of the Trust Indenture Act.
16. The statements made in the Prospectus under the captions
"Description of Debt Securities," "Description of the Common Stock,"
"Description of Stock Purchase Contracts and Stock Purchase Units," "Prospectus
Supplement Summary--The Offering," "Description of the PIES, "Description of the
Purchase Contracts," "Certain Provisions of the Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement," and "Description of the Senior
Notes," insofar as they purport to constitute summaries of certain terms of
documents referred to therein, and considered together, constitute accurate
summaries of the terms of such documents in all material respects.
17. The statements in the Prospectus Supplement under the captions
"United States Federal Income Tax Consequences" and "Certain ERISA
Considerations," insofar as they purport to constitute summaries of matters of
United States federal statutes or regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in all
material respects.
18. The Company is not, and will not be after the application of the
proceeds from the offering of the Corporate PIES, an "investment company" within
the meaning of and subject to regulation under the Investment Company Act of
1940, as amended.
19. The Company is a "holding company" under the Holding Company Act,
but, pursuant to Section (3)(a)(1) of the Holding Company Act, is exempt from
all provisions of the Holding Company Act except Section 9(a)(2) thereof.
20. To the best knowledge of such counsel, there are no contracts or
other documents which are required by the Securities Act to be described in the
Prospectus or filed as exhibits to the Registration Statement which have not
been so described or filed as required.
B-4
21. To the best knowledge of such counsel, after due inquiry, and
except as set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property or assets of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or such subsidiary,
would be reasonably likely to result in a Material Adverse Effect; and, to the
best knowledge of such counsel, no such proceedings are overtly threatened or
contemplated by governmental authorities or threatened by others.
22. To the best knowledge of such counsel, after due inquiry, and
except as set forth in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Securities Act.
23. Nothing has come to the attention of such counsel, after due
inquiry, which lead such counsel to believe that the Registration Statement
(except for the financial statements and financial data included or incorporated
by reference therein, as to which such counsel need express no belief), as of
the Effective Date, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus (except as
stated above), as of the applicable Delivery Date, includes any untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
ALLOCATION OF OPINIONS OF COUNSEL FOR THE COMPANY
▇. ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇ will make all the statements set forth above
relying on ▇▇▇▇▇▇▇▇ and Wedge as to the matters governed by or relating to the
law of the State of Nevada.
▇. ▇▇▇▇▇▇▇▇ & Wedge will make the statements set forth in paragraphs 1,
2, 3, 5, 6, 8 and 12 to the extent the matters set forth therein are governed by
or relate to the law of the State of Nevada or instruments governed thereby, or
relate to the State of Nevada or agencies thereof. In addition, ▇▇▇▇▇▇▇▇ and
Wedge will state, in customary fashion, their belief that a Nevada court, or a
federal court applying Nevada choice of law principles, would give effect to the
choice of law provisions of the Indenture and the Offered Securities.
B-5
ANNEX C
CONTENTS OF OPINIONS TO BE DELIVERED BY COUNSEL TO THE
PURCHASE CONTRACT AGENT AND THE TRUSTEE
1. The Bank has been duly incorporated and is validly existing as a
banking corporation in good standing under the laws of the State of New York.
2. The Bank has the corporate power and authority to execute, deliver
and perform its duties, as Purchase Contract Agent, under the Purchase Contract
Agreement and the Pledge Agreement, has duly executed and delivered the Purchase
Contract Agreement and the Pledge Agreement, and, insofar as the laws governing
the trust powers of the Bank are concerned and assuming due authorization,
execution and delivery thereof by the other parties thereto, each of the
Purchase Contract Agreement and the Pledge Agreement constitutes a legal, valid
and binding agreement of the Purchase Contract Agent, enforceable against the
Purchase Contract Agent in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
3. The execution and delivery by the Bank, and performance by the Bank,
as Purchase Contract Agent, of the Purchase Contract Agreement and the Pledge
Agreement do not conflict with or constitute a breach of the charter or by-laws
of the Bank.
4. No, approval, authorization or other action by, or filing with, any
governmental authority of the United States of America, or the State of New
York, in each case, having jurisdiction over the trust powers of the Bank is
required in connection with the execution and delivery by the Bank of, or as a
condition precedent to the performance by the Bank, as the Purchase Contract
Agent, of its duties under, the Purchase Contract Agreement or the Pledge
Agreement, except such as have been obtained, taken or made.
5. Based upon an examination of the certificate of authentication on
the Corporate PIES Certificate evidencing the Corporate PIES issued on the date
hereof, such Corporate PIES Certificate has been duly authenticated by the Bank,
as Purchase Contract Agent, pursuant to the Purchase Contract Agreement.
C-1
ANNEX D
CONTENTS OF OPINIONS TO BE DELIVERED BY COUNSEL TO THE COLLATERAL
AGENT AND THE SECURITIES INTERMEDIARY TO THE UNDERWRITERS
1. The Bank has been duly organized and is validly existing as a
natural banking association in good standing under the laws of the United States
of America.
2. The Bank has the power and authority to execute, deliver and perform
its duties under the Pledge Agreement, has duly executed and delivered the
Pledge Agreement, and, insofar as the laws governing the trust powers of the
Bank are concerned and assuming due authorization, execution and delivery
thereof by the other parties thereto, the Pledge Agreement constitutes a legal,
valid and binding agreement of the Bank, enforceable against the Bank in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
3. The execution, delivery and performance by the Bank of the Pledge
Agreement do not conflict with or constitute a breach of the charter or by-laws
of the Bank.
4. No, approval, authorization or other action by, or filing with, any
governmental authority of the United States of America or any State having
jurisdiction over the trust powers of the Bank is required in connection with
the execution and delivery by the Bank of the Pledge Agreement or the
performance by the Bank of its duties thereunder, except such as have been
obtained, taken or made.
D-1
ANNEX E
CONTENTS OF LETTER OF ACCOUNTANTS
The letter, dated as of Closing Time, of Deloitte & Touche LLP shall be
in agreed form and shall confirm that they are independent public accountants
within the meaning of the Securities Act and shall be further to the effect
that:
(i) in their opinion the financial statements examined by them and
included in the Incorporated Documents comply as to form in all material
respects with the applicable accounting requirements of the Securities Act;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited financial statements included in the
Incorporated Documents;
(iii) on the basis of the review referred to in clause (ii) above,
a reading of the latest available interim financial statements of the Company,
inquiries of officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements included in the
Incorporated Documents do not comply as to form in all material respects with
the applicable accounting requirements of the Securities Act or that any
material modifications should be made to such unaudited financial statements for
them to be in conformity with generally accepted accounting principles;
(B) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than three business
days prior to the date of such letter, there was any change in the capital stock
or any increase in long-term debt or any decreases in net current assets or
stockholders' equity of the Company and its consolidated subsidiaries as
compared with amounts shown on the latest balance sheet included in the
Incorporated Documents; or
(C) for the period from the closing date of the latest income
statement included in the Incorporated Documents to the closing date of the
latest available income statement read by such accountants, there were any
decreases, as compared with the corresponding period of the previous year and
with the period of corresponding length ended the date of the latest income
statement included in the Incorporated Documents, in consolidated operating
revenue, net income and basic and diluted net income per share;
E-1
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Incorporated Documents disclose have occurred
or may occur or which are described in such letter;
(iv) in addition to their examination referred to in their report
contained in the Incorporated Documents, they have carried out certain other
specified procedures, not constituting an audit, with respect to the dollar
amounts, percentages, ratios and other financial information, (in each case to
the extent that such dollar amounts, percentages and other financial
information, either directly or by analysis or computation, are derived from
general accounting records of the Company) which appear in the Company's Annual
Report on Form 10-K for the year 2000 in Item 1, "Business," Item 6, "Selected
Financial Data" and Item 7, "Management Discussion and Analysis," in its
Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, June 30
and September 30, 2001 in Item 2, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," in its Current Report on Form
8-K dated September 19, 2001 in the Prospectus under "Consolidated Ratio of
Earnings to Fixed Charges" and in the Prospectus Supplement under "Prospectus
Supplement Summary-- Sierra Pacific Resources," "Risk Factors-- Risk Factors
Relating to Sierra Pacific," "Recent Developments," "The Company," "Regulatory
Matters," "Selected Consolidated Financial Data," "Capitalization," "Price Range
of Common Shares and Dividend History" and "Description of the Senior Notes--
Ranking" and have found such dollar amounts, percentages and financial
information to be in agreement with the accounting records of the Company.
E-2
