PURCHASE AGREEMENT

Exhibit 1.2 ================================================================================ SIERRA PACIFIC RESOURCES (a Nevada corporation) Senior Notes PURCHASE AGREEMENT Dated: April 15, 2005 ================================================================================ TABLE OF CONTENTS

Schedule A - Underwriters Schedule B - Purchase Price Schedule C - Opinion of Woodburn and Wedge Schedule D - Opinion of Choate, Hall & Stewart LLP 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 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 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 (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 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 (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 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 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. 8 (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. 9 (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 10 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 11 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 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 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 t