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Exhibit 1.2
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SIERRA PACIFIC RESOURCES
(a Nevada corporation)
Senior Notes
PURCHASE AGREEMENT
Dated: April 15, 2005
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TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
SECTION 1. Representations and
Warranties................................ 3
SECTION 2. Sale and Delivery to Underwriters;
Closing.................... 10
SECTION 3. Covenants of the
Company...................................... 11
SECTION 4. Payment of
Expenses........................................... 13
SECTION 5. Conditions of Underwriters'
Obligations....................... 14
SECTION 6.
Indemnification...............................................
17
SECTION 7.
Contribution..................................................
19
SECTION 8. Representations, Warranties and Agreements to
Survive......... 20
SECTION 9. Termination of
Agreement...................................... 20
SECTION 10. Default by One or More of the
Underwriters.................... 21
SECTION 11.
Notices.......................................................
22
SECTION 12.
Parties.......................................................
22
SECTION 13. Governing
Law................................................. 22
SECTION 14. Waiver of Trial by
Jury....................................... 22
SECTION 15.
Time..........................................................
22
SECTION 16.
Counterparts..................................................
22
SECTION 17. Effect of
Headings............................................ 22
</TABLE>
Schedule A - Underwriters
Schedule B - Purchase Price
Schedule C - Opinion of Woodburn and Wedge
Schedule D - Opinion of Choate, Hall & Stewart LLP
<PAGE>
SIERRA PACIFIC RESOURCES
(a Nevada corporation)
Senior Notes
PURCHASE AGREEMENT
April 15, 2005
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
LEHMAN BROTHERS INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Sierra Pacific Resources, a Nevada corporation (the "COMPANY")
confirms
its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith
Incorporated ("MERRILL LYNCH") and Lehman Brothers Inc. ("LEHMAN
BROTHERS")
(together, the "Underwriters", which term shall also include any
underwriter
substituted as hereinafter provided in Section 10 hereof), with
respect to the
remarketing by the Remarketing Agents (as hereinafter defined)
and the offer to
purchase by the Underwriters, acting severally and not jointly,
of up to
$235,218,000 in aggregate principal amount of the Company's
Senior Notes (the
"SECURITIES"). The Securities are to be issued under an
indenture, dated as of
May 1, 2000 (the "ORIGINAL INDENTURE"), between the Company and
The Bank of New
York, as trustee (the "TRUSTEE"), as supplemented by an
officer's certificate
establishing the form, terms and provisions of the Securities,
as originally
issued, and as further supplemented by an officer's certificate
containing
modifications thereto effective as of the date of the
consummation of the
aforesaid remarketing of the Securities (each of such officer's
certificates an
"OFFICER'S CERTIFICATE" and the Original Indenture, as so
supplemented, the
"INDENTURE").
The Company understands that, if the Underwriters purchase
Securities as
contemplated herein, the Underwriters may make a public offering
of such
Securities.
The Securities are to be originally issued and delivered as a
component of
the Company's Premium Income Equity Securities ("NEW PIES"). The
Company has
filed with the Securities and Exchange Commission ("THE
COMMISSION") a
registration statement on Form S-4 (No. 333-_______) for the
registration of the
New PIES (including the various components thereof) under the
Securities Act of
1933, as amended (the "1933 ACT"), and the qualification of the
Indenture
(excluding the second Officer's Certificate) under the Trust
Indenture Act of
1939, as amended (the "1939 ACT"). Such registration has not yet
been declared
effective by the Commission. Such registration statement,
including the exhibits
and schedules thereto, at the time it becomes
<PAGE>
effective, is referred to herein as the "S-4 REGISTRATION
STATEMENT"; and each
preliminary prospectus and the final prospectus used in
connection with the
Exchange Offer (as hereinafter defined) are hereinafter referred
to,
collectively, as the "EXCHANGE OFFER PROSPECTUS".
The New PIES are being offered in exchange for outstanding
securities of
the Company (the "EXCHANGE OFFER"), as set forth in the S-4
Registration
Statement. As further described in the S-4 Registration
Statement, the
Securities are to be subject to a remarketing procedure
conducted by Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Lehman
Brothers Inc., as joint
remarketing agents (the "REMARKETING AGENTS"), pursuant to a
remarketing
agreement (the "REMARKETING AGREEMENT") to be entered into among
the Company and
the Remarketing Agents.
The Company has filed with the Commission a registration
statement on Form
S-3 (No. 333-123835), for the registration of various
securities, including the
Securities, under the 1933 Act, and the offer and sale thereof
from time to time
in accordance with Rule 415 of the rules and regulations of the
Commission under
the 1933 Act (the "1933 ACT REGULATIONS"), and for the
qualification of the
Indenture under the 1939 Act. Such registration statement has
not yet been
declared effective by the Commission. Such registration
statement, including the
exhibits and schedules thereto, at the time it becomes
effective, is referred to
herein as the "REGISTRATION STATEMENT"; the final prospectus and
the final
prospectus supplement relating to the remarketing of the
Securities by the
Remarketing Agents, in the forms first furnished to the
Remarketing Agents by
the Company for use in connection with the remarketing of the
Securities by the
Remarketing Agents, are collectively referred to herein as the
"REMARKETING
PROSPECTUS"; and the final prospectus and the final prospectus
supplement
relating to the offering of the Securities by the Underwriters,
in the forms
first furnished to the Underwriters by the Company for use in
connection with
the offering of the Securities by the Underwriters, are
collectively referred to
herein as the "PROSPECTUS".
Notwithstanding the foregoing, all references herein to the
"S-4
Registration Statement" and the "Registration Statement" shall
also be deemed to
include all documents filed pursuant to the Securities Exchange
Act of 1934 (the
"1934 ACT") at the respective times such registration statements
become
effective, and all references herein to the Prospectus and the
Exchange Offer
Prospectus shall also be deemed to include all documents filed
pursuant to the
1934 Act prior to the date thereof or, in the case of a
prospectus filed
pursuant to Rule 424(b) of the 1933 Act Regulations, prior to
the time of such
filing, and, in any case which are incorporated therein by
reference pursuant to
Item 12 of Form S-3 under the 1933 Act. A "preliminary
prospectus" shall be
deemed to refer to (i) any prospectus used before the related
registration
statement becomes effective and (ii) any prospectus that omits
information to be
included upon pricing in a form of prospectus filed with the
Commission pursuant
to Rule 424(b) of the 1933 Act Regulations and is used after the
registration
statement becomes effective and prior to the filing of the
related Prospectus
pursuant to Rule 424(b) by the Company. For purposes of this
Purchase Agreement,
all references to any registration statement, prospectus or
preliminary
prospectus or to any amendment or supplement to any of the
foregoing shall be
deemed to include the copy of such document filed with the
Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Agreement to financial statements and
schedules and
other information which is "contained," "included" or "stated"
in any
registration statement, prospectus or the preliminary prospectus
(or other
references of like import) shall be deemed to mean and include
all such
financial statements and schedules and other information which
is incorporated
by reference in such registration statement, prospectus or
preliminary
prospectus, as the case may
2
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be; and all references in this Agreement to amendments or
supplements to any
registration statement, prospectus or preliminary prospectus
shall be deemed to
mean and include the filing of any document under the 1934 Act
which is
incorporated by reference in such registration statement,
prospectus or
preliminary prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The
Company
represents and warrants to each Underwriter as of the date of
this Agreement,
the Remarketing Commencement Date (as defined in Section 5(d)),
the Remarketing
Date (as defined in Section 5(h)) and the Closing Time (as
defined in Section
2(c)) (unless a particular date, or another date, is
specifically referenced in
which case such specific date), and agrees with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. (A) The
Company
meets the requirements for use of Form S-3 under the 1933 Act.
Prior to
the Remarketing Commencement Date, the Registration Statement
will have
become effective under the 1933 Act and no stop order suspending
the
effectiveness of the Registration Statement will have been
issued under
the 1933 Act and no proceedings for that purpose will have been
instituted
or be pending or, to the knowledge of the Company, be
contemplated by the
Commission, and any request on the part of the Commission for
additional
information will have been complied with.
At the time the Registration Statement becomes effective and at
the
Closing Time, the Registration Statement will comply in all
material
respects with the requirements of the 1933 Act and the 1933
Act
Regulations and the 1939 Act and the rules and regulations of
the
Commission under the 1939 Act (the "1939 ACT REGULATIONS"), and
will not
contain an untrue statement of a material fact or omit to state
a material
fact required to be stated therein or necessary to make the
statements
therein not misleading. Neither the Remarketing Prospectus nor
any
amendments or supplements thereto, at the time the Remarketing
Prospectus
or any such amendment or supplement is first furnished to the
Remarketing
Agents or at the Closing Time, will include an untrue statement
of a
material fact or omit to state a material fact necessary in
order to make
the statements therein, in the light of the circumstances under
which they
were made not misleading. Neither the Prospectus nor any
amendments or
supplements thereto, at the time the Prospectus or any such
amendment or
supplement was issued or at the Closing Time, will include an
untrue
statement of a material fact or omit to state a material fact
necessary in
order to make the statements therein, in the light of the
circumstances
under which they were made, not misleading. The representations
and
warranties in this subsection shall not apply to statements in
or
omissions from the Registration Statement, the Remarketing
Prospectus or
the Prospectus made in reliance upon and in conformity with
written
information furnished to the Company by any Underwriter
specifically for
use with respect to such documents.
Each preliminary prospectus and the prospectus filed as part of
the
Registration Statement as originally filed or as part of any
amendment
thereto will comply when so filed in all material respects with
the 1933
Act Regulations and each preliminary prospectus and the
Prospectus
delivered to the Underwriters for use in connection with the
offering of
the Securities by the Underwriters will, at the time of such
delivery, be
identical to the electronically transmitted copies thereof filed
with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation
S-T.
3
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(ii) Incorporated Documents. The documents incorporated or
deemed
to be incorporated by reference in the Registration Statement
and the
Prospectus, at the time they were or hereafter are filed with
the
Commission, complied and will comply in all material respects
with the
requirements of the 1934 Act and the 1934 Act Regulations, and,
when read
together with the other information in the Prospectus, at the
time the
Registration Statement becomes effective, at the time the
Prospectus is
issued and at the Closing Time, did not and will not contain an
untrue
statement of a material fact or omit to state a material fact
required to
be stated therein or necessary to make the statements therein,
in the
light of the circumstances under which they were made, not
misleading.
(iii) Independent Auditors. Deloitte & Touche LLP, which
certified
certain of the financial statements and supporting schedules
included in
the Registration Statement and the Prospectus (i) is a
registered public
accounting firm and is independent with respect to the Company
and its
subsidiaries, each within the meaning of the 1934 Act and (ii)
is in
compliance with its obligations under the 1934 Act with respect
to the
Company and its subsidiaries.
(iv) Financial Statements. The financial statements included in
the
Registration Statement and the Prospectus, together with the
related
schedules and notes, present and will present fairly the
financial
position of the Company and its consolidated subsidiaries at the
dates
indicated and the statement of operations, stockholders' equity
and cash
flows of the Company and its consolidated subsidiaries for the
periods
specified; such financial statements have been and will be
prepared in
conformity with generally accepted accounting principles
("GAAP") applied
on a consistent basis, except as noted therein, throughout the
periods
involved. The supporting schedules, if any, included in the
Registration
Statement and the Prospectus present and will present fairly in
accordance
with GAAP the information required to be stated therein. The
selected
financial data and the summary financial information included in
the
Registration Statement and the Prospectus present and will
present fairly
the information shown therein and have been and will be compiled
on a
basis consistent with that of the audited financial statements
included in
the Registration Statement and the Prospectus. The financial
statements
included in the Registration Statement and the Prospectus do not
and will
not contain non-GAAP financial measures within the meaning of
Regulation G
or Item 10 of Regulation S-K of the Commission. Except as
disclosed in the
Registration Statement and the Prospectus, neither the Company
nor any of
its subsidiaries has or will have any off-balance sheet
arrangements of
the character contemplated by Item 303 of Regulation S-K or
otherwise by
Section 13(j) of the 1934 Act, or has any other contingent
obligation or
liability, which, in any case, is material, or is reasonably
likely to be
material, to the Company and its consolidated subsidiaries
considered as
one enterprise.
(v) No Material Adverse Change in Business. Since the
respective
dates as of which information is given in the Registration
Statement and
the Prospectus, except as otherwise stated therein, (i) there
has been or
will have been no material adverse change, or any development
which is
reasonably likely to result in a material adverse change, in
the
condition, financial or otherwise, results of operations or
business
affairs of the Company and its subsidiaries considered as one
enterprise
(any such change or development, a "MATERIAL ADVERSE CHANGE"),
(ii) there
have been or will have been no transactions entered into by the
Company or
any of its subsidiaries, other than those in the ordinary course
of
business, which are material with respect to the Company and
its
subsidiaries considered as one enterprise and (iii) there has
been or will
have been no
4
<PAGE>
dividend or distribution of any kind declared, paid or made by
the Company
on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good
standing under
the laws of the State of Nevada and has corporate power and
authority to
own, lease and operate its properties and to conduct its
business as
described in the Registration Statement and the Prospectus and
to enter
into and perform its obligations under this Agreement; and the
Company is
duly qualified as a foreign corporation to transact business and
is in
good standing in each other jurisdiction in which such
qualification is
required, whether by reason of the ownership or leasing of
property or the
conduct of business, except where the failure so to qualify or
to be in
good standing would not have a material adverse effect, and
would not
result in any development which is reasonably likely to have a
material
adverse effect, on the condition, financial or otherwise,
results of
operations or business affairs of the Company and its
subsidiaries
considered as one enterprise, whether or not arising in the
ordinary
course of business (any such effect or development, a "MATERIAL
ADVERSE
EFFECT").
(vii) Good Standing of Subsidiaries. Each Significant Subsidiary
(as
defined below) of the Company has been duly organized and is
validly
existing as a corporation in good standing under the laws of
its
jurisdiction of organization, has corporate power and authority
to own,
lease and operate its properties and to conduct its business as
described
in the Registration Statement and the Prospectus; and each
Significant
Subsidiary is duly qualified as a foreign corporation to
transact business
and is in good standing in each jurisdiction in which such
qualification
is required, whether by reason of the ownership or leasing of
property or
the conduct of business, except where the failure so to qualify
or to be
in good standing would not result in a Material Adverse Effect.
The shares
of issued and outstanding capital stock of each Significant
Subsidiary
have been duly authorized and validly issued and are fully paid
and
non-assessable; none of the issued and outstanding shares of
capital stock
of either Significant Subsidiary was issued in violation of any
preemptive
or other similar rights of any securityholder of such
Significant
Subsidiary; and all shares of common stock of each Significant
Subsidiary
are owned by the Company, free and clear of any security
interests and
other liens and encumbrances and of any equities, claims and
other adverse
interests. Nevada Power Company and Sierra Pacific Power
Company, each a
Nevada corporation (and each a "SIGNIFICANT SUBSIDIARY"), are
each a
"significant subsidiary" within the meaning of Rule 405 under
the 1933
Act, and the Company has no other such significant
subsidiary.
(viii) Capitalization. The authorized, issued and
outstanding
capital stock of the Company is as set forth in the Registration
Statement
and the Prospectus. The shares of issued and outstanding capital
stock of
the Company have been duly authorized and validly issued and are
fully
paid and non-assessable; and none of the issued and outstanding
shares of
capital stock of the Company was issued in violation of any
preemptive or
other similar rights of any securityholder of the Company.
(ix) Authorization of this Agreement. The Company has all
corporate
power and authority necessary to execute and deliver this
Agreement, to
perform its obligations hereunder and to consummate the
transactions
contemplated hereby. This Agreement has been duly authorized,
executed and
delivered by the Company.
5
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(x) Authorization and Description of Indenture. The Indenture
and
the transactions contemplated thereby have been duly authorized
by the
Company; the Indenture (excluding the Officer's Certificates)
has been
duly executed and delivered by the Company; at the Closing Time,
the
Indenture will have been duly executed and delivered by the
Company and
will constitute 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 (excluding the
Officer's
Certificates) has been and, at the Closing Time, the Indenture
will have
been duly qualified under the 1939 Act and the 1939 Act
Regulations; and
the Indenture conforms and will conform in all material respects
to the
description thereof contained in the Registration Statement and
the
Prospectus.
(xi) Authorization of the Securities. The Securities have been
duly
authorized; and, at the Exchange Date, the Notes will have been
duly
executed and delivered by the Company and when authenticated by
the
Trustee and incorporated into the New PIES, and further upon the
issuance
and delivery of the New PIES against the securities to be
surrendered in
exchange therefor, as contemplated in the S-4 Registration
Statement and
the Exchange Offer Prospectus, will constitute valid and
binding
obligations of the Company, enforceable against the Company in
accordance
with their terms, except as the enforcement thereof may be
limited by
bankruptcy, insolvency (including, without limitation, all laws
relating
to fraudulent transfers), reorganization, moratorium or similar
laws
affecting enforcement of mortgagees' and other creditors' rights
generally
and except as enforcement thereof is subject to general
principles of
equity (regardless of whether enforcement is considered in a
proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing.
(xii) Description of the Securities and the Indenture. The
Securities and the Indenture will conform in all material
respects to the
respective statements relating thereto contained in the
Registration
Statement and the Prospectus and will be in substantially the
respective
forms filed or incorporated by reference, as the case may be, as
exhibits
to the Registration Statement.
(xiii) Absence of Defaults and Conflicts. Neither the Company
nor
any of its Significant Subsidiaries is in violation of its
charter or
by-laws or in default in the performance or observance of any
obligation,
agreement, covenant or condition contained in any contract,
indenture,
mortgage, deed of trust, loan or credit agreement, note, lease
or other
agreement or instrument to which the Company or any of its
Significant
Subsidiaries is a party or by which any of them may be bound, or
to which
any of the property or assets of the Company or any of its
Significant
Subsidiaries is subject (collectively, "AGREEMENTS AND
INSTRUMENTS")
except for such defaults as would not result in a Material
Adverse Effect.
The execution, delivery and performance by the Company of this
Agreement,
the Indenture and the Securities, and the consummation by the
Company of
the transactions contemplated herein and in the Registration
Statement and
compliance by the Company with its obligations hereunder and
under the
Indenture and the Securities have been authorized by all
necessary
corporate action and do not and will not, whether with or
without the
giving of notice or passage of time or both, conflict with or
constitute a
breach of, or default or a Repayment Event (as defined below)
under, or
result in the creation or imposition of any lien, charge or
encumbrance
upon any
6
<PAGE>
property or assets of the Company or any of its Significant
Subsidiaries
pursuant to, the Agreements and Instruments except for such
conflicts,
breaches or defaults or liens, charges or encumbrances that,
singly or in
the aggregate, would not result in a Material Adverse Effect,
nor will
such action result in any violation of the provisions of the
charter or
by-laws of the Company or any of its Significant Subsidiaries or
any
applicable law, statute, rule, regulation, judgment, order, writ
or decree
of any government, government instrumentality or court, domestic
or
foreign, having jurisdiction over the Company or any of its
subsidiaries
or any of their assets, properties or operations. As used
herein, a
"REPAYMENT EVENT" means any event or condition which gives the
holder of
any note, debenture or other evidence of indebtedness (or any
person
acting on such holder's behalf) the right to require the
repurchase,
redemption or repayment of all or a portion of such indebtedness
by the
Company or any of its Significant Subsidiaries.
(xiv) Labor. No labor disturbance by the employees of the
Company or
any of its subsidiaries exists or, to the knowledge of the
Company or any
of its Significant Subsidiaries, is imminent, which might be
expected to
have a Material Adverse Effect.
(xv) ERISA. The Company is in compliance in all material
respects
with all applicable provisions of the Employee Retirement Income
Security
Act of 1974, as amended, including the regulations and
published
interpretations thereunder ("ERISA"); no "reportable event" (as
defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in
ERISA) for which the Company would have any material liability;
the
Company has not incurred and the Company does not expect to
incur material
liability; the Company has not incurred and the Company does not
expect to
incur material liability under (i) Title IV of ERISA with
respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections
412 or 4971 of the Internal Revenue Code of 1986, as amended,
including
the regulations and published interpretations thereunder (the
"CODE"); and
each "pension plan" for which the Company would have any
liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified
in all material respects and to the Company's knowledge nothing
has
occurred, whether by action or by failure to act, which might
reasonably
be expected to cause the loss of such qualification.
(xvi) Tax. Each of the Company and its Significant Subsidiaries
has
filed all federal, state and local income and franchise tax
returns
required to be filed through the date hereof and has paid all
taxes due
thereon, and no tax deficiency has been determined adversely to
the
Company or any of its Significant Subsidiaries which has had,
nor does the
Company have any knowledge of any tax deficiency which, if
determined
adversely to the Company or any of its Significant Subsidiaries,
might
have, a Material Adverse Effect.
(xvii) Insurance. The Company and its Significant
Subsidiaries
carry, or are covered by, insurance in such amounts and covering
such
risks that the Company reasonably believes is adequate for the
conduct of
its business and the value of its properties and as is customary
for
companies engaged in similar businesses in similar
industries.
(xviii) Absence of Proceedings. Except as disclosed in the
Registration Statement and the Prospectus, there is no action,
suit,
proceeding, inquiry or investigation before or brought by any
court or
governmental agency or body, domestic or foreign, now pending,
or, to the
knowledge of the Company, threatened, against or affecting
the
7
<PAGE>
Company or any of its Significant Subsidiaries which, singly or
in the
aggregate, might reasonably be expected to result in a Material
Adverse
Effect, or which might reasonably be expected to materially and
adversely
affect the consummation of the transactions contemplated by this
Agreement
or the performance by the Company of its obligations
hereunder.
(xix) Possession of Licenses and Permits. The Company and
its
Significant Subsidiaries possess such permits, licenses,
approvals,
consents and other authorizations (collectively, "GOVERNMENTAL
LICENSES")
issued by the appropriate federal, state, local or foreign
regulatory
agencies or bodies necessary to conduct the business now
operated by them
except where the failure to possess such Governmental Licenses
would not
have a Material Adverse Effect; the Company and its
Significant
Subsidiaries are in compliance with the terms and conditions of
all such
Governmental Licenses, except where the failure so to comply
would not,
singly or in the aggregate, have a Material Adverse Effect; all
of the
Governmental Licenses are valid and in full force and effect,
except where
the invalidity of such Governmental Licenses or the failure of
such
Governmental Licenses to be in full force and effect would not
have a
Material Adverse Effect; and neither the Company nor any of
its
Significant Subsidiaries has received any notice of proceedings
relating
to the revocation or modification of any such Governmental
Licenses which,
singly or in the aggregate, if the subject of an unfavorable
decision,
ruling or finding, would result in a Material Adverse
Effect.
(xx) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order,
registration,
qualification or decree of, any court or governmental authority
or agency
is necessary or required for the performance by the Company of
its
obligations hereunder, in connection with the offering, issuance
or sale
of the Securities hereunder or the consummation of the
transactions
contemplated by this Agreement or for the due execution,
delivery or
performance of the Indenture by the Company, except such as have
been
already obtained or as may be required under the 1933 Act or the
1933 Act
Regulations or state securities laws and except for the
qualification of
the Indenture under the 1939 Act.
(xxi) Title to Property. The Company and its Significant
Subsidiaries have good title to all real property and personal
property
owned by them, in each case free and clear of all liens,
encumbrances,
equities or claims except such as are described or contemplated
in the
Registration Statement and Prospectus or would not, individually
or in the
aggregate, have a Material Adverse Effect and do not materially
interfere
with the use made or to be made of such property by the Company
and its
Significant Subsidiaries.
(xxii) Leases. All of the leases and subleases material to
the
business of the Company and each of its Significant Subsidiaries
and under
which the Company or any of its Significant Subsidiaries holds
properties
described in the Registration Statement and the Prospectus, are
in full
force and effect, and neither the Company nor any of its
Significant
Subsidiaries has any notice of any material claim of any sort
that has
been asserted by anyone adverse to the rights of the Company or
any of its
subsidiaries under any of the leases or subleases mentioned
above, or
affecting or questioning the rights of such Company or any
subsidiary
thereof to the continued possession of the leased or subleased
premises
under any such lease or sublease.
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(xxiii) Environmental Laws. Except as described in the
Registration
Statement and the Prospectus and except such matters as would
not, singly
or in the aggregate, result in a Material Adverse Effect, (i)
neither the
Company nor any of its subsidiaries is in violation of any
federal, state,
local or foreign statute, law, rule, regulation, ordinance,
code, policy
or rule of common law or any judicial or administrative
interpretation
thereof, including any judicial or administrative order,
consent, decree
or judgment, relating to pollution or protection of human
health, the
environment (including, without limitation, ambient air, surface
water,
groundwater, land surface or subsurface strata) or wildlife,
including,
without limitation, laws and regulations relating to the release
or
threatened release of chemicals, pollutants, contaminants,
wastes, toxic
substances, hazardous substances, petroleum or petroleum
products
(collectively, "HAZARDOUS MATERIALS") or to the manufacture,
processing,
distribution, use, treatment, storage, disposal, transport or
handling of
Hazardous Materials (collectively, "ENVIRONMENTAL LAWS"), (ii)
the Company
and its subsidiaries have all permits, authorizations and
approvals
required under any applicable Environmental Laws and are each
in
compliance with their requirements, (iii) there are no pending
or
threatened administrative, regulatory or judicial actions,
suits, demands,
demand letters, claims, liens, notices of noncompliance or
violation,
investigation or proceedings relating to any Environmental Law
against the
Company or any of its subsidiaries.
(xxiv) Investment Company Act. The Company is not required, and
upon
the issuance and sale of the Securities as herein contemplated
and the
application of the net proceeds therefrom as described in the
Prospectus
will not be required, to register as, an "investment company"
under the
Investment Company Act of 1940, as amended (the "1940 ACT").
(xxv) Holding Company Act. The Company is a "holding company"
under
the Public Utility Holding Company Act of 1935, as amended (the
"1935
ACT"), but the Company and all of its subsidiaries are exempt
from all
provisions of the 1935 Act (except Section 9(a)(2) thereof) by
virtue of
the exemption set forth in Section 3(a)(1) thereof.
(xxvi) Internal Controls. (i) The Company has devised and
established and maintains the following, among other, internal
controls
(without duplication):
(A) a system of "internal accounting controls" as
contemplated in Section 13(b)(2)(B) of the 1934 Act;
(B) "disclosure controls and procedures" as such term is
defined in Rule 13a-15(e) under the 1934 Act; and
(C) "internal control over financial reporting" (as such
term is defined in Rule 13a-15(f) under the 1934 Act (the
internal
controls referred to in clauses (A) an (B) above and this clause
(C)
being hereinafter called, collectively, the "INTERNAL
CONTROLS").
(ii) The Internal Controls are evaluated by the Company's
senior management periodically as appropriate and, in any event,
as
required by law.
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<PAGE>
(iii) The Internal Controls are, individually and in the
aggregate, effective in all material respects to perform the
functions for
which they were established.
(iv) Based on the most recent evaluations of the Internal
Controls, all material weaknesses, if any, and significant
deficiencies,
if any, in the design or operation of the Internal Controls
which could
adversely affect the Company's ability to timely record,
process,
summarize and report financial information and any fraud,
whether or not
material, that involves management or other employees who have
a
significant role in the Internal Controls have been identified
and
reported to the Company's independent auditors and the audit
committee of
the Company's board of directors; and all such weaknesses, if
any, have
been rectified; and all deficiencies which, individually or in
the
aggregate, could constitute significant deficiencies and which
have not
yet been rectified (A) are in the process of being rectified and
(B) have
not had and will not have, individually or in the aggregate, a
material
adverse effect on the effectiveness of the Internal Controls.
(For
purposes of clarification, the Company further represents and
warrants,
that, as of the date of this Agreement, no such weaknesses in
the design
or operation of the Internal Controls had been identified.)
(xxvii) Compliance with Sarbanes Oxley. The Company is in
compliance in all material respects with the Sarbanes-Oxley Act
of 2002
and the rules and regulations of the Commission and the New York
Stock
Exchange that have been adopted thereunder, all to the extent
that such
Act and such rules and regulations are in effect and applicable
to the
Company.
(b) Other. The representations and warranties of the Company
contained
in the Dealer Manager Agreement, dated the date of this
Agreement (the "DEALER
MANAGER AGREEMENT"), among the Company and Merrill Lynch and
Lehman Brothers, as
dealer managers, and to be contained in the Remarketing
Agreement were, are
and/or will be true and correct when made and as of the
applicable dates
referred to in subsection (a) of this Section.
(c) Officer's Certificates. Any certificate signed by any
officer of the
Company or any of its subsidiaries delivered to the Underwriters
or to counsel
for the Underwriters shall be deemed a representation and
warranty by the
Company to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Remarketing. As contemplated in the S-4 Registration
Statement, and
as to be contemplated in the Remarketing Prospectus and provided
for in the
Remarketing Agreement, the Remarketing Agents are to use
commercially reasonable
efforts to remarket the Securities (except Securities which are
held by holders
who elect not to have their Securities remarketed) to new
investors.
(b) Sale to Underwriters. On the basis of the representations
and
warranties herein contained and subject to the terms and
conditions herein set
forth, each Underwriter agrees, severally and not jointly, that
if the
Remarketing Agents, despite their commercially reasonable
efforts, shall be
unable to remarket to new investors all the Securities which are
to be so
remarketed, the Underwriters shall purchase, at the purchase
price set forth on
Schedule B, all such Securities which have not been so
remarketed, each
Underwriter being obligated to purchase such principal amount of
such
unremarketed New Notes as shall bear the same ratio to the
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aggregate principal amount of such unremarketed New Notes as the
principal
amount of New Notes set forth in Schedule A opposite the name of
such
Underwriter bears to $235,218,000, plus any additional principal
amount of
Securities which such Underwriters may become obligated to
purchase pursuant to
the provisions of Section 10 hereof.
(c) Payment. Payment of the purchase price for, and delivery
of
certificates for, the Securities to be purchased as provided in
subsection (b)
above shall be made at the offices of Dewey Ballantine LLP in
New York, N.Y., or
at such other place as shall be mutually agreed upon by the
parties, at 9:00
A.M. (Eastern time) on the business day (i) which is designated
by the
Remarketing Agents as the "REMARKETING SETTLEMENT DATE", (ii)
which is no later
than the thirtieth day following the Exchange Date (as defined
below) and (iii)
of which the Underwriters shall have been notified on the third
prior business
day by the Remarketing Agents (such notice to include the
aggregate principal
amount of Securities which the Remarketing Agents have been
unable to remarket
to new investors) (unless postponed in accordance with the
provisions of Section
10), or such other time not later than ten business days after
such date as
shall be agreed upon by the Underwriters and the Company, but in
no event later
than the date provided in (c)(ii) above (such time and date of
payment and
delivery being herein called "CLOSING TIME").
Payment shall be made by wire transfer of immediately available
funds to a
bank account designated by the Company and the Remarketing
Agents, against
delivery to the Underwriters of certificates for the Securities
to be purchased
by them. It is understood that each Underwriter has authorized
Merrill Lynch,
for its account, to accept delivery of, receipt for, and make
payment of the
purchase price for, the Securities which it has agreed to
purchase. Merrill
Lynch, individually and not as representative of the
Underwriters, may (but
shall not be obligated to) make payment of the purchase price
for the Securities
to be purchased by any Underwriter whose funds have not been
received by the
Closing Time, but such payment shall not relieve such
Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Securities
shall
be in such denominations ($1,000 or integral multiples thereof)
and registered
in such names as the Underwriters may request in writing at
least one full
business day before the Closing Time. The Securities will be
made available for
examination and packaging by the Underwriters in The City of New
York on the
business day prior to the Closing Time.
(e) Delivery of Global Securities. In lieu of the delivery to
the
Underwriters of certificates representing the Securities at the
Closing Time, as
contemplated above, the Company, with the approval of the
Underwriters, may
deliver one or more global Notes to a custodian for The
Depository Trust Company
("DTC"), to be held by DTC initially for the accounts of the
several
Underwriters.
SECTION 3. Covenants of the Company. The Company covenants with
each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The
Company, subject to Section 3(b), will notify the Underwriters
promptly, (i)
when the Registration Statement and any post-effective amendment
to the
Registration Statement shall become effective, or any supplement
to the
Prospectus or any amended Prospectus shall have been filed, (ii)
of the receipt
of any comments from the Commission, (iii) of any request by the
Commission for
any amendment to the Registration Statement or any amendment or
supplement to
the Prospectus or any document incorporated by reference therein
or for
additional information, and (iv) of the issuance by the
Commission of any stop
order suspending the
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<PAGE>
effectiveness of the Registration Statement or of any order
preventing or
suspending the use of any preliminary prospectus, or of the
suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of
the initiation or threatening of any proceedings for any of such
purposes. The
Company will promptly effect the filings necessary pursuant to
Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly
whether the
form of prospectus transmitted for filing under Rule 424(b) was
received for
filing by the Commission and, in the event that it was not, it
will promptly
file such prospectus. The Company will make commercially
reasonable efforts to
prevent the issuance of any stop order and, if any stop order is
issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriters
notice
of its intention to file or prepare any amendment to the
Registration Statement
or any amendment, supplement or revision to either the
prospectus included in
the Registration Statement at the time it became effective or to
the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the
Underwriters with copies of any such documents a reasonable
amount of time prior
to such proposed filing or use, as the case may be, and will not
file or use any
such document to which the Underwriters or counsel for the
Underwriters shall
reasonably object.
(c) Delivery of Registration Statements. The Company will
deliver to the
Underwriters and counsel for the Underwriters, without charge,
signed copies of
the Registration Statement as originally filed and of each
amendment thereto and
signed copies of all consents and certificates of experts, and
will also deliver
to the Underwriters, without charge, a conformed copy of the
Registration
Statement as originally filed and of each amendment thereto
(without exhibits)
for each of the Underwriters. The copies of the Registration
Statement and each
amendment thereto furnished to the Underwriters will be
identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to
EDGAR, except to the extent permitted by Regulation S T.
(d) Delivery of Prospectuses. The Company will deliver to
each
Underwriter, without charge, as many copies of each preliminary
prospectus as
such Underwriter reasonably requests, and the Company hereby
consents to the use
of such copies for purposes permitted by the 1933 Act. The
Company will furnish
to each Underwriter, without charge, during the period when the
Prospectus is
required to be delivered under the 1933 Act, such number of
copies of the
Prospectus (as amended or supplemented) as such Underwriter may
reasonably
request. The Prospectus and any amendments or supplements
thereto furnished to
the Underwriters will be identical to the electronically
transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to
the extent
permitted by Regulation S T.
(e) Continued Compliance with Securities Laws. The Company will
comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and
the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as
to permit the
completion of the distribution of the Securities as contemplated
in this
Agreement and in the Prospectus. If at any time when a
prospectus is required by
the 1933 Act to be delivered in connection with sales of the
Securities, any
event shall occur or condition shall exist as a result of which
it is necessary,
in the opinion of counsel for the Underwriters or for the
Company, to amend the
Registration Statement or amend or supplement the Prospectus in
order that the
Prospectus will not include any untrue statements of a material
fact or omit to
state a material fact necessary in order to make the statements
therein not
misleading in the light of the circumstances existing at the
time it is
delivered to a purchaser, or if it shall be necessary, in the
opinion of such
counsel, at any such time to amend the Registration Statement or
amend or
supplement the Prospectus in order to comply with the
requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly
prepare
12
<PAGE>
and file with the Commission, subject to Section 3(b), such
amendment or
supplement as may be necessary to correct such statement or
omission or to make
the Registration Statement or the Prospectus comply with such
requirements, and
the Company will furnish to the Underwriters such number of
copies of such
amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its reasonable
best
efforts, in cooperation with the Underwriters, to qualify the
Securities for
offering and sale under the applicable securities laws of such
states and other
jurisdictions as the Underwriters may designate and to maintain
such
qualifications in effect for a period of not less than one year
from the
effective date of the Registration Statement; provided, however,
that the
Company shall not be obligated to file any general consent to
service of process
or to qualify as a foreign corporation or as a dealer in
securities in any
jurisdiction in which it is not so qualified or so subject
itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so
subject. The Company will also supply the Underwriters with such
information as
is necessary for the determination of the legality of the
Securities for
investment under the laws of such jurisdictions as the
Underwriters may request.
(g) Rule 158. The Company will timely file such reports pursuant
to the
1934 Act as are necessary in order to make generally available
to its
securityholders as soon as practicable an earnings statement for
the purposes
of, and to provide the benefits contemplated by, the last
paragraph of Section
11(a) of the 1933 Act.
(h) Listing. The Company will use its reasonable best efforts to
effect
the listing of the Securities on the New York Stock Exchange
("NYSE").
(i) Restriction on Sale of Securities. During a period of 90
days from
the date of the Prospectus, the Company will not, without the
prior written
consent of Merrill Lynch, directly or indirectly, issue, sell,
offer or contract
to sell, grant any option for the sale of, or otherwise transfer
or dispose of,
any debt securities of the Company substantially similar to the
Securities,
except that this paragraph (j) shall not prevent any
remarketings of the debt
component of the Company's Premium Income Equity Securities.
(j) Reporting Requirements. The Company, during the period when
the
Prospectus is required to be delivered under the 1933 Act, will
file all
documents required to be filed with the Commission pursuant to
the 1934 Act
within the time periods required by the 1934 Act and the 1934
Act Regulations.
(k) Other. The Company shall perform all of the obligations
under the
Dealer Manager Agreement (except to the extent the obligation of
the Company is
waived under such agreement) and the Remarketing Agreement
(except to the extent
that (i) the obligation is waived under such agreement and (ii)
the Underwriters
and the Remarketing Agents shall be the same entities).
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to
the
performance of its obligations under, or otherwise relating to
the transactions
contemplated by, this Agreement, including (i) the preparation,
printing and
filing of the Registration Statement (including financial
statements and
exhibits) as originally filed and of each amendment thereto,
(ii) the
preparation, printing and delivery to the Underwriters of this
Agreement, any
agreement among Underwriters,
13
<PAGE>
the Indenture and such other documents as may be required in
connection with the
offering, purchase, sale, issuance or delivery of the
Securities, (iii) the
preparation, issuance and delivery of the certificates for the
Securities to the
Underwriters, (iv) the fees and expenses of the Company's
counsel, accountants
and other advisors, (v) the fees and expenses of counsel for the
Underwriters,
(vi) the printing and delivery to the Underwriters of copies of
each preliminary
prospectus and of the Prospectus and any amendments or
supplements thereto,
(vii) the qualification of the Securities under securities laws
in accordance
with the provisions of Section 3(f) hereof, including filing
fees and the
preparation, printing and delivery to the Underwriters of copies
of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses
of the Trustee,
including the fees and expenses of counsel for the Trustee in
connection with
the Indenture and the Securities, (ix) the costs and expenses
relating to
investor presentations on any "road show" undertaken in
connection with the
marketing of the Securities, including, without limitation,
expenses associated
with the production of road show slides and graphics, fees and
expenses of any
consultants engaged in connection with the road show
presentations, travel and
lodging expenses of the representatives and officers of the
Company and any such
consultants, and the cost of aircraft and other transportation
chartered in
connection with the road show, (x) any fees payable in
connection with the
rating of the Securities and (xi) the fees and expenses incurred
in connection
with the listing of the Securities on
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