<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 17, 1998.
REGISTRATION NO. 333-
NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
NEVADA POWER COMPANY
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
NEVADA 88-0045330
(State or Other Jurisdiction (I.R.S. Employer
of Identification Number)
Incorporation or Organization)
</TABLE>
NVP CAPITAL III
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE TO BE APPLIED FOR
(State or Other Jurisdiction (I.R.S. Employer
of Identification Number)
Incorporation or Organization)
</TABLE>
6226 WEST SAHARA AVENUE, LAS VEGAS, NEVADA 89146, TELEPHONE (702) 367-5000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrants' Principal Executive Offices)
CHARLES A. LENZIE, CHAIRMAN OF THE BOARD, NEVADA POWER COMPANY
P. O. BOX 230, LAS VEGAS, NEVADA 89151, TELEPHONE (702) 367-5000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
COPIES TO:
John R. Rottschaefer, Esq. Michael F. Cusick, Esq.
Best Best & Krieger LLP Winthrop, Stimson, Putnam & Roberts
P. O. Box 1028 One Battery Park Plaza
Riverside, California 92502 New York, New York 10004-1490
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX.
/ /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933 OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. / /
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. / /
- ------------------------
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. / /
- ------------------------
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Nevada Power Company Junior Subordinated
Deferrable Interest Debentures............ (2)(3) (2)(3) (2)(3) N/A
NVP Capital III Preferred Securities........ (3) (3) (3) N/A
Nevada Power Company Guarantee with respect
to Preferred Securities................... (4) (4) (4) N/A
TOTAL....................................... $70,000,000(3) 100% $70,000,000(3) $20,650
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures will be purchased by
NVP Capital III with the proceeds of the sale of the Preferred Securities
together with the proceeds received from Nevada Power Company in respect of
the Common Securities to be issued by NVP Capital III to Nevada Power
Company. No separate consideration will be received for such Junior
Subordinated Deferrable Interest Debentures.
(3) In no event will the aggregate initial public offering price of the
securities issued under this Registration Statement exceed $70,000,000.
Junior Subordinated Deferrable Interest Debentures of Nevada Power Company
will be issued and sold by Nevada Power Company to NVP Capital III in an
aggregate principal amount corresponding to the aggregate stated liquidation
amount of Preferred Securities and Common Securities of NVP Capital III.
Such Junior Subordinated Deferrable Interest Debentures may later be
distributed for no additional consideration to the holders of such Preferred
Securities upon a dissolution of NVP Capital III and the distribution of the
assets thereof.
(4) No separate consideration will be received for the Nevada Power Company
Guarantee with respect to the Preferred Securities.
------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 17, 1998
2,800,000 PREFERRED SECURITIES
NVP CAPITAL III
% TRUST ISSUED PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS SET FORTH HEREIN, BY
NEVADA POWER COMPANY
------------
The % Trust Issued Preferred Securities (the "Preferred Securities")
offered hereby represent preferred undivided beneficial interests in the assets
of NVP Capital III, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"). Nevada Power Company, a Nevada corporation (the
"Company"), will own all the common securities (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities") representing
undivided beneficial interests in the assets of the Trust. The Trust exists for
the sole purpose of issuing the Trust Securities and investing the proceeds
thereof in an equivalent amount of the Company's % Junior Subordinated
Deferrable Interest Debentures due 2038 (the "Subordinated Debentures"). Upon an
event of a default under the Declaration (as defined herein), the holders of
Preferred Securities will have a preference over the holders of the Common
Securities with respect to payments in respect of distributions and payments
upon redemption, liquidation and otherwise.
(CONTINUED ON NEXT PAGE)
--------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 11 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE PREFERRED
SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES OF SUCH DEFERRAL.
------------------------
Application has been made to list the Preferred Securities on the New York
Stock Exchange, Inc. (the "New York Stock Exchange"). If so approved, trading of
the Preferred Securities on the New York Stock Exchange is expected to commence
within the 30-day period after the initial delivery of the Preferred Securities.
See "Underwriting."
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
INITIAL PUBLIC
OFFERING PRICE UNDERWRITING PROCEEDS TO
(L) DISCOUNT (2) TRUST (3)(4)
<S> <C> <C> <C>
Per Preferred Security................................ $25.00 (3) $25.00
Total................................................. $ (3) $
</TABLE>
(1) Plus accrued distributions, if any, from the date of initial issuance.
(2) The Trust and the Company have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933. See "Underwriting."
(3) Because the proceeds of the sale of the Preferred Securities will be
invested in the Subordinated Debentures, the Company has agreed, in the
Underwriting Agreement (as defined herein), to pay to the Underwriters, as
compensation (Underwriters' Compensation) for their arranging the investment
therein of such proceeds, $. per Preferred Security (or $ in the
aggregate); provided that, such compensation for sales of 100,000 or more
Preferred Securities to a single purchaser will be $. per Preferred
Security. Therefore, to the extent of such sales, the actual amount of such
compensation will be less than the aggregate amount specified in the
preceding sentence. See "Underwriting."
(4) Expenses of the offering to be paid by the Company are estimated to be
$286,150.
--------------------------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Preferred Securities will be made only in book-entry only
form through the facilities of The Depository Trust Company (the "Depositary"),
on or about , 1998, against payment therefor in immediately
available funds.
--------------------------
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
EVEREN SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE PREFERRED
SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN THE PREFERRED SECURITIES, AND THE IMPOSITION OF A PENALTY BID,
DURING AND AFTER THIS OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING".
- ------------------------
(CONTINUED FROM PREVIOUS PAGE)
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $25 per
Preferred Security, accumulating from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing December 31, 1998 ("distributions"). The payment of
distributions out of moneys held by the Trust and payments on liquidation of the
Trust or the redemption of Preferred Securities are guaranteed by the Company
(the "Guarantee") to the extent described under "Description of the Guarantee."
The Guarantee covers payments of distributions and other payments on the
Preferred Securities if and to the extent that the Trust has funds available
therefor, which will not be the case unless the Company has made payments of
principal, interest or other payments on the Subordinated Debentures held by the
Trust as its sole asset. The Guarantee, when taken together with the Company's
obligations under the Subordinated Debentures, the Indenture (as defined herein)
and the Declaration, including its covenant in the Indenture to pay costs,
expenses, debts and obligations of the Trust (other than with respect to the
Trust Securities), provide a full and unconditional guarantee of amounts due on
the Preferred Securities. See "Risk Factors--Factors Relating to the Preferred
Securities and the Subordinated Debentures--Rights under the Guarantee" and
"Effect of Obligations under the Subordinated Debentures and the Guarantee."
The obligations of the Company under the Guarantee are subordinate and
junior in right of payment to all liabilities of the Company and rank PARI PASSU
with the most senior preferred stock issued, from time to time, if any, by the
Company. The obligations of the Company under the Subordinated Debentures are
subordinate and junior in right of payment to all present and future Senior
Indebtedness (as defined herein) of the Company and rank PARI PASSU with other
junior subordinated debt securities of the Company and obligations to, or rights
of, the Company's other general unsecured creditors. As of June 30, 1998, the
Company had approximately $1,023 million aggregate principal amount of Senior
Indebtedness outstanding and approximately $613 million of obligations that rank
PARI PASSU with the Subordinated Debentures. There are no terms in the Preferred
Securities, the Subordinated Debentures or the Guarantee that limit the
Company's ability to incur additional indebtedness, including indebtedness that
ranks senior to the Subordinated Debentures and the Guarantee. See "Risk
Factors--Factors Relating to the Preferred Securities and the Subordinated
Debentures--Ranking of the Subordinated Debentures and the Guarantee." The
Subordinated Debentures purchased by the Trust may be subsequently distributed
PRO RATA to holders of the Trust Securities in connection with a Liquidation (as
defined herein) of the Trust.
The distribution rate and the distribution and other payment dates for the
Preferred Securities will correspond to the interest rate and the interest and
other payment dates on the Subordinated Debentures, which will be the sole
assets of the Trust. As a result, if principal or interest is not paid on the
Subordinated Debentures, no amounts will be paid on the Preferred Securities. If
the Company does not make principal or interest payments on the Subordinated
Debentures, the Trust will not have sufficient funds to make distributions on
the Preferred Securities, in which event the Guarantee will not apply to such
distributions until the Trust has sufficient funds available therefor. In such
event, the remedy of a holder of Preferred Securities is to enforce the
Subordinated Debentures. See "Description of the Preferred Securities--
Declaration Events of Default" and "--Voting Rights."
So long as no Indenture Event of Default (as defined herein) has occurred
and is continuing, the Company has the right under the Indenture to defer
payments of interest on the Subordinated Debentures by extending the interest
payment period on the Subordinated Debentures at any time for up to 20
2
<PAGE>
consecutive quarters (an "Extension Period"), provided that an Extension Period
may not extend beyond the Stated Maturity (as defined herein) of the
Subordinated Debentures. If interest payments are so deferred, distributions on
the Preferred Securities will also be deferred. During such Extension Period,
distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law) at an annual rate of % per annum compounded
quarterly. During any Extension Period, holders of Preferred Securities will be
required to accrue deferred interest as original issue discount ("OID"), and to
include such OID in their gross income for United States federal income tax
purposes in advance of the receipt of the cash distributions with respect to
such deferred interest payments. There could be multiple Extension Periods of
varying lengths throughout the term of the Subordinated Debentures. If the
Company exercises the right to extend an interest payment period, the Company
shall not, during such Extension Period, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock or (ii) make any payment of principal
of, or interest or premium, if any, on or repay, repurchase or redeem, or make
any sinking fund payment with respect to, any indebtedness of the Company
(including other junior subordinated debt securities) that ranks PARI PASSU with
or junior in right of payment to the Subordinated Debentures or make any
guarantee payments with respect to the foregoing (other than (a) dividends or
distributions in common stock of the Company, (b) redemptions or purchases of
any rights pursuant to the Company's Stock Purchase Rights Plan, or any
successor to such Stock Purchase Rights Plan, and the declaration of a dividend
of such rights or the issuance of preferred stock under such plans in the
future, (c) payments under the Guarantee, (d) purchases of common stock related
to the issuance of common stock under the Company's Stock Purchase and Dividend
Reinvestment Plan and any of the Company's benefit plans for its directors,
officers or employees and (e) purchases of common stock required to prevent the
loss or secure the renewal or reinstatement of any government license or
franchise held by the Company or any of its subsidiaries). The Company has no
present intention of exercising its right to defer payments of interest by
extending the interest payment period on the Subordinated Debentures. Moreover,
because of the consequences of exercising such right, including a prohibition on
the payment of dividends with respect to the Company's capital stock, the
Company believes that the likelihood of such exercise is remote. See "Risk
Factors--Factors Relating to the Preferred Securities and the Subordinated
Debentures--Option to Extend Interest Payment Period; Tax Consequence of
Election," "Description of the Subordinated Debentures--Option to Extend
Interest Payment Period" and "Certain Federal Income Tax Consequences--Original
Issue Discount."
The Subordinated Debentures will mature on , 2038, which date may
be extended once to a date not later than , 2047 (such earlier or
later date, the "Stated Maturity") by the Company, provided certain financial
conditions are met. See "Description of the Subordinated Debentures--Option to
Extend Maturity Date." The Subordinated Debentures are redeemable by the
Company, in whole or in part, from time to time, on or after , 2003,
or at any time in whole upon the occurrence of a Special Event (as defined
herein), in each case, at a price equal to the aggregate principal amount
thereof plus accrued and unpaid interest thereon to the date fixed for
redemption (the "Debenture Redemption Price"). If the Company redeems
Subordinated Debentures, the Trust must redeem Preferred Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debentures so redeemed at $25 per Preferred Security plus
accumulated and unpaid distributions thereon, including interest thereon, to the
date fixed for redemption (the "Redemption Price"). The Preferred Securities
will also be redeemed in whole at the Redemption Price at the Stated Maturity of
the Subordinated Debentures. See "Description of the Preferred
Securities--Redemptions."
The Company will have the right at any time to liquidate the Trust and cause
the Subordinated Debentures to be distributed to the holders of the Preferred
Securities. If the Subordinated Debentures are distributed to the holders of the
Preferred Securities, the Company will use its best efforts to have the
Subordinated Debentures listed on the New York Stock Exchange or on such other
exchange or organization as the Preferred Securities are then listed. See
"Description of the Subordinated Debentures--Distribution of the Subordinated
Debentures."
3
<PAGE>
In the event of any involuntary or voluntary liquidation, dissolution,
winding-up or termination of the Trust (each, a "Liquidation"), the holders of
the Preferred Securities will be entitled to receive for each Preferred
Security, after satisfaction of liabilities to creditors of the Trust, if any, a
liquidation amount of $25 plus accumulated and unpaid distributions thereon
(including interest thereon) to the date of payment, unless, in connection with
such Liquidation, the Subordinated Debentures are distributed to the holders of
the Preferred Securities. See "Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution."
The Preferred Securities initially will be represented by a global
certificate registered in the name of the Depositary or its nominee. Beneficial
interests in the Preferred Securities will be shown on, and transfers thereof
will be effected only through, records maintained by Participants (as defined
herein) in the Depositary. Except as described herein, Preferred Securities in
certificated form will not be issued in exchange for such global certificate.
See "Description of the Preferred Securities--Book-Entry Only Issuance--The
Depository Trust Company."
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by the
Company with the Commission pursuant to the informational requirements of the
Exchange Act may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549, and at the following regional offices of the
Commission: Suite 1400, 500 West Madison Street, Chicago, Illinois 60661 and 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission and that is located at
http://www.sec.gov.
The Company's common stock is listed on the New York Stock Exchange (Symbol:
"NVP") and the Pacific Exchange, Inc. Reports, proxy statements and other
information concerning the Company may be inspected at the offices of such
exchanges.
The Company and the Trust have filed with the Commission a Registration
Statement on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act") with respect to the securities offered hereby. This Prospectus omits, in
accordance with the rules and regulations of the Commission, certain of the
information contained in the Registration Statement. Reference is hereby made to
the Registration Statement and the exhibits and the financial statements, notes
and schedules filed as a part thereof or incorporated by reference therein for
further information with respect to the Company, the Trust and the securities
offered hereby. Statements contained herein concerning the provisions of any
document are not necessarily complete and, in each instance, where a copy or
form of such document has been filed as an exhibit to the Registration Statement
or otherwise has been filed with the Commission, reference is made to the copy
or form so filed. Each such statement is qualified in its entirety by such
reference.
Separate financial statements of the Trust will not be prepared and,
therefore, are not included herein. The Company and the Trust do not consider
that such financial statements would be material to holders of the Preferred
Securities because the Trust is a newly formed special purpose entity, has no
operating history or independent operations and is not engaged in and does not
propose to engage in any activity other than holding as trust assets the
Subordinated Debentures and issuing the Trust Securities. See "The Trust,"
"Description of the Preferred Securities," "Description of the Guarantee" and
"Description of the Subordinated Debentures."
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated by reference in this Prospectus and shall be
deemed to be a part hereof:
(1) Annual Report on Form 10-K for the fiscal year ended December 31,
1997, File No. 1-4698 1998
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998,
File No. 1-4698
(3) Quarterly Report on Form 10-Q for the quarter ended June 30, 1998,
File No. 1-4698
(4) Current Report on Form 8-K dated April 29, 1998, File No. 1-4698
(5) Current Report on Form 8-K dated July 7, 1998, File No. 1-4698
5
<PAGE>
Each document filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of any offering of securities made by
this Prospectus shall be deemed to be incorporated herein by reference and to be
a part hereof from the date of filing such document. Any statement contained
herein or in a document, all or a portion of which is incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Company will provide without charge to any person to whom a copy of this
Prospectus is delivered, upon written or oral request of such person a copy of
any and all of the documents that have been or may be incorporated by reference
herein (other than exhibits to such documents which are not specifically
incorporated by reference into such documents). Such requests should be directed
by mail to: Richard C. Schmalz, Director, Treasury, Nevada Power Company, P.O.
Box 230, Las Vegas, Nevada 89151 or by telephone (702) 367-5608.
6
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
DETAILED INFORMATION WITH RESPECT TO THE COMPANY AND THIS OFFERING INCLUDED
ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN. SEE
"INCORPORATION OF CERTAIN INFORMATION BY REFERENCE." AS USED HEREIN, (I) THE
"INDENTURE" MEANS THE INDENTURE, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME, BETWEEN THE COMPANY AND IBJ SCHRODER BANK & TRUST COMPANY ("IBJ
SCHRODER"), AS INDENTURE TRUSTEE (THE "INDENTURE TRUSTEE"), AND (II) THE
"DECLARATION" MEANS THE AMENDED AND RESTATED DECLARATION OF TRUST AMONG THE
COMPANY, AS SPONSOR (THE "SPONSOR"), IBJ SCHRODER, AS PROPERTY TRUSTEE (THE
"PROPERTY TRUSTEE"), DELAWARE TRUST CAPITAL MANAGEMENT, INC., AS DELAWARE
TRUSTEE (THE "DELAWARE TRUSTEE"), THE REGULAR TRUSTEES NAMED THEREIN
(COLLECTIVELY WITH THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE, THE
"TRUSTEES") AND THE HOLDERS, FROM TIME TO TIME, OF UNDIVIDED BENEFICIAL
INTERESTS IN THE TRUST TO BE ISSUED PURSUANT TO THE DECLARATION. EACH OF THE
CAPITALIZED TERMS USED IN THIS PROSPECTUS AND NOT OTHERWISE DEFINED HAS THE
MEANING SET FORTH IN THE INDENTURE OR THE DECLARATION, AS THE CONTEXT INDICATES.
THE COMPANY
The Company, incorporated under the laws of Nevada in 1929, is an operating
public utility engaged in the electric utility business in the City of Las Vegas
and vicinity in southern Nevada. As of December 31, 1997, the Company served
approximately 518,391 customers in its service territory, which has a population
of approximately 1,303,000. In 1997, the Company's electric energy requirements
were obtained from the following sources: coal generation--36%, oil and natural
gas--18%, and purchased power, including hydroelectric--46%.
Growth in the Company's service territory is continuing at a rapid pace. The
Company's customer base grew at annual rates of 6.4%, 7.2% and 6.0% during 1997,
1996 and 1995, respectively. Kilowatt-hours also increased 6.6%, 13.1% and 1.4%
during 1997, 1996 and 1995, respectively.
In 1997, the Nevada State Legislature enacted legislation to separate
traditional electric service into regulated and unregulated services. It is
expected that the generation and marketing of electricity and some other related
services will not be regulated in the future while the transmission and
distribution of electricity will continue to be regulated. The legislation
authorizes customers to obtain generation and marketing services from
alternative sellers starting no later than December 31, 1999. In addition, the
legislation allows the Public Utilities Commission of Nevada (the "PUCN") to
authorize full recovery of costs which they determine to be stranded but does
not guarantee full recovery of such costs. In response to this legislation, the
Company has formed a team of high-level employees to work exclusively on the
Company's response to the legislation and its possible impact on the Company. At
the present time, the Company cannot predict what impact the legislation may
have on its customer base, or the effect, if any, on the Company's future
corporate structure, financial position or results of operations.
In April 1998, the Company and Sierra Pacific Resources, a Nevada utility
holding company ("Sierra Pacific"), entered into an Agreement and Plan of Merger
dated as of April 29, 1998 (the "Merger Agreement") that, by way of consummation
of the Mergers (as defined herein), provides for the Company and Sierra Pacific
Power Company ("SPPC"), the principal operating subsidiary of Sierra Pacific, to
become subsidiaries of Sierra Pacific, with both companies retaining their
individual names and identities in their respective service territories. See
"Risk Factors--Factors Relating to the Mergers" and "The Mergers."
The principal executive offices of the Company are located in Las Vegas,
Nevada, and its mailing address is P.O. Box 230, Las Vegas, Nevada 89151,
telephone number (702) 367-5000.
7
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Securities Offered................ 2,800,000 % Trust Issued Preferred Securities
(liquidation amount $25 per preferred security) of NVP
Capital III.
Offering Price.................... $25 per Preferred Security.
Distributions..................... Holders of the Preferred Securities are entitled to
receive cumulative cash distributions at an annual rate
of % of the liquidation amount of $25 per Preferred
Security, accumulating from the date of original
issuance and payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year,
commencing December 31, 1998.
Guarantee......................... The payment of distributions out of moneys held by the
Trust and payments on liquidation of the Trust or the
redemption of Preferred Securities are guaranteed by the
Company under the Guarantee but only to the extent
described under "Description of the Guarantee." The
Guarantee covers payments of distributions and other
payments on the Preferred Securities if and to the
extent that the Trust has funds available therefor,
which will not be the case unless the Company has made
payments of principal, interest or other payments on the
Subordinated Debentures held by the Trust as its sole
asset. The obligations of the Company under the
Guarantee are subordinate and junior in right of payment
to all liabilities of the Company and rank PARI PASSU
with the most senior preferred stock issued, from time
to time, if any, by the Company. The Guarantee, when
taken together with the Company's obligations under the
Subordinated Debentures, the Indenture and the
Declaration, including its covenant in the Indenture to
pay costs, expenses, debts and obligations of the Trust
(other than with respect to the Trust Securities),
provide a full and unconditional guarantee of amounts
due on the Preferred Securities.
Subordinated Debentures........... The Trust will invest the proceeds of the Trust
Securities in an equivalent amount of the Company's %
Junior Subordinated Deferrable Interest Debentures due
2038. The Subordinated Debentures will mature on
, 2038, which date may be extended once to
a date not later than , 2047 by the
Company, provided certain financial conditions are met.
The obligations of the Company under the Subordinated
Debentures are subordinate and junior in right of
payment to all present and future Senior Indebtedness of
the Company and rank PARI PASSU with other junior
subordinated debt securities of the Company and
obligations to, or rights of, the Company's other
general unsecured creditors. As of June 30, 1998, the
Company had approximately $1,023 million aggregate
principal amount of
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Senior Indebtedness outstanding and approximately $613
million of obligations that rank PARI PASSU with the
Subordinated Debentures.
Interest Deferral................. So long as no Indenture Event of Default has occurred
and is continuing, the Company has the right under the
Indenture to defer payments of interest on the
Subordinated Debentures by extending the interest
payment period on the Subordinated Debentures at any
time for up to 20 consecutive quarters, provided that an
Extension Period may not extend beyond the Stated
Maturity of the Subordinated Debentures. If interest
payments are so deferred, distributions on the Preferred
Securities will also be deferred. During such Extension
Period, distributions will continue to accumulate with
interest thereon (to the extent permitted by applicable
law) at an annual rate of % per annum compounded
quarterly. During any Extension Period, holders of
Preferred Securities will be required to accrue deferred
interest as OID, and to include such OID in their gross
income for United States federal income tax purposes in
advance of the receipt of the cash distributions with
respect to such deferred interest payments. There could
be multiple Extension Periods of varying lengths
throughout the term of the Subordinated Debentures.
If the Company exercises the right to extend an interest
payment period, subject to certain exceptions set forth
herein, the Company shall not during such Extension
Period (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock or
(ii) make any payment of principal of, or interest or
premium, if any, on or repay, repurchase or redeem, or
make any sinking fund payment with respect to, any
indebtedness of the Company (including other junior
subordinated debt securities) that ranks PARI PASSU with
or junior in right of payment to the Subordinated
Debentures or make any guarantee payments with respect
to the foregoing. The Company has no present intention
of exercising its right to defer payments of interest by
extending the interest payment period on the
Subordinated Debentures. Moreover, because of the
consequences of exercising such right, including a
prohibition on the payment of dividends with respect to
the Company's capital stock, the Company believes that
the likelihood of such exercise is remote.
Relationship Among the Preferred
Securities, the Subordinated
Debentures and the Guarantee...... The distribution rate and the distribution and other
payment dates for the Preferred Securities will
correspond to the interest rate and the interest and
other payment dates on the Subordinated Debentures,
which will be the sole assets of the Trust. As a result,
if principal or interest is not paid on the
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Subordinated Debentures, no amounts will be paid on the
Preferred Securities. If the Company does not make
principal or interest payments on the Subordinated
Debentures, the Trust will not have sufficient funds to
make distributions on the Preferred Securities, in which
event the Guarantee will not apply to such distributions
until the Trust has sufficient funds available therefor.
In such event, the remedy of a holder of Preferred
Securities is to enforce the Subordinated Debentures.
Redemption of the Subordinated
Debentures and the Preferred
Securities........................ The Subordinated Debentures are redeemable by the
Company, in whole or in part, from time to time, on or
after , 2003, or at any time in whole upon
the occurrence of a Special Event, in each case, at the
Debenture Redemption Price. If the Company redeems
Subordinated Debentures, the Trust must redeem Preferred
Securities having an aggregate liquidation amount equal
to the aggregate principal amount of the Subordinated
Debentures so redeemed at the Redemption Price. The
Preferred Securities will also be redeemed in whole at
the Redemption Price at the Stated Maturity of the
Subordinated Debentures.
Distribution of the Subordinated
Debentures........................ The Company will have the right at any time to liquidate
the Trust and cause the Subordinated Debentures to be
distributed to the holders of the Preferred Securities.
If the Subordinated Debentures are distributed to the
holders of the Preferred Securities, the Company will
use its best efforts to have the Subordinated Debentures
listed on the New York Stock Exchange or on such other
exchange or organization as the Preferred Securities are
then listed.
Liquidation of the Trust.......... In the event of a Liquidation, the holders of the
Preferred Securities will be entitled to receive for
each Preferred Security, after satisfaction to creditors
of the Trust, if any, a liquidation amount of $25 plus
accumulated and unpaid distributions thereon (including
interest thereon) to the date of payment, unless, in
connection with such Liquidation, the Subordinated
Debentures are distributed to the holders of the
Preferred Securities.
Listing........................... Application has been made to list the Preferred
Securities on the New York Stock Exchange.
Risk Factors...................... Prospective investors should carefully consider the
matters set forth under "Risk Factors."
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RISK FACTORS
PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES SHOULD CAREFULLY REVIEW THE
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND SHOULD PARTICULARLY
CONSIDER THE FOLLOWING MATTERS. IN ADDITION, BECAUSE THE HOLDERS OF THE
PREFERRED SECURITIES MAY RECEIVE SUBORDINATED DEBENTURES IN EXCHANGE THEREFOR
UPON LIQUIDATION, PROSPECTIVE PURCHASERS OF THE PREFERRED SECURITIES ARE ALSO
MAKING AN INVESTMENT DECISION WITH REGARD TO THE SUBORDINATED DEBENTURES AND
SHOULD CAREFULLY REVIEW ALL INFORMATION REGARDING THE SUBORDINATED DEBENTURES
CONTAINED HEREIN.
FACTORS RELATING TO THE PREFERRED SECURITIES AND THE SUBORDINATED DEBENTURES
RANKING OF THE SUBORDINATED DEBENTURES AND THE GUARANTEE. The obligations
of the Company under the Subordinated Debentures are subordinate and junior in
right of payment to all present and future Senior Indebtedness and rank PARI
PASSU with other junior subordinated debt securities of the Company and
obligations to, or rights of, the Company's other general unsecured creditors.
The Company's obligations under the Guarantee are subordinate and junior in
right of payment to all liabilities of the Company and rank PARI PASSU with the
most senior preferred stock issued, from time to time, if any, by the Company.
As of June 30, 1998, the Company had approximately $1,023 million aggregate
principal amount of Senior Indebtedness outstanding (including approximately
$427 million aggregate principal amount of secured indebtedness outstanding
under the Mortgage Indenture (as defined herein)) and approximately $613 million
of obligations that rank PARI PASSU with the Subordinated Debentures (including
approximately $119 million aggregate principal amount of junior subordinated
debt securities, accounts payable, accrued liabilities, including taxes,
interest and deposits, and deferred credits and other liabilities, all arising
in the ordinary course of business, and excluding commitments or contingencies
in respect of existing or future obligations for, among other things,
construction expenditures, fuel and purchased power obligations and operating
lease obligations). There are no terms in the Preferred Securities, the
Subordinated Debentures or the Guarantee that limit the Company's ability to
incur additional indebtedness, including indebtedness that ranks senior to the
Subordinated Debentures and the Guarantee. The Subordinated Debentures and the
Guarantee also will be effectively subordinated to all obligations of any
subsidiaries of the Company. See "Description of the Guarantee" and "Description
of the Subordinated Debentures--Ranking" and "--Subordination."
RIGHTS UNDER THE GUARANTEE. The Guarantee will be qualified as an indenture
under the Trust Indenture Act of 1939 (the "Trust Indenture Act"). IBJ Schroder
will act as indenture trustee under the Guarantee for the purposes of compliance
with the provisions of the Trust Indenture Act (the "Guarantee Trustee"). The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Preferred Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment of (i) any accumulated and unpaid distributions that are required to be
paid on the Preferred Securities to the extent the Trust shall have funds
available therefor, (ii) the Redemption Price to the extent the Trust shall have
funds available therefor and (iii) upon a Liquidation (other than in connection
with the distribution of the Subordinated Debentures to the holders of the
Preferred Securities or the redemption of all the Preferred Securities upon the
redemption or Stated Maturity of the Subordinated Debentures), the lesser of (a)
the aggregate of the stated liquidation amount and all accumulated and unpaid
distributions (including interest thereon) on the Preferred Securities to the
date of payment to the extent the Trust shall have funds available therefor and
(b) the amount of assets of the Trust remaining available for distribution to
holders of the Preferred Securities in liquidation of the Trust. See
"Description of the Guarantee--General."
The holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under the
Guarantee. Any holder of Preferred Securities may institute a legal proceeding
directly against the
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Company to enforce such holder's rights under the Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee or any
other person or entity. If the Company were to default on its obligation to pay
amounts payable on the Subordinated Debentures, the Trust would lack available
funds for the payment of distributions or amounts payable on redemption of the
Preferred Securities or otherwise, and, in such event, holders of the Preferred
Securities would not be able to rely upon the Guarantee for payment of such
amounts. Instead, holders of the Preferred Securities would be required to rely
on the enforcement (i) by the Property Trustee of its rights as registered
holder of the Subordinated Debentures against the Company pursuant to the terms
of the Subordinated Debentures or (ii) by such holders of their direct right
against the Company to enforce payments on the Subordinated Debentures. See
"Description of the Guarantee--Events of Default" and "Description of the
Subordinated Debentures--Indenture Events of Default." The Declaration provides
that each holder of Preferred Securities, by acceptance thereof, agrees to the
provisions of the Guarantee, including the subordination provisions thereof, and
the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES. If a
Declaration Event of Default (as defined herein) occurs and is continuing, then
the holders of Preferred Securities would rely on the enforcement by the
Property Trustee of its rights as registered holder of the Subordinated
Debentures against the Company. In addition, subject to certain conditions
described herein, the holders of a majority in aggregate liquidation amount of
the Preferred Securities will have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Property
Trustee or to direct the exercise of any trust or power conferred upon the
Property Trustee under the Declaration, including the right to direct the
Property Trustee to exercise the remedies available to it under the Indenture as
registered holder of the Subordinated Debentures. If the Property Trustee fails
to enforce its rights under the Declaration or the Subordinated Debentures, a
holder of Preferred Securities may institute a legal proceeding directly against
the Company to enforce the Property Trustee's rights under the Declaration or
the Subordinated Debentures without first instituting any legal proceeding
against the Property Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay the principal of
or interest on the Subordinated Debentures on the date such principal or
interest is otherwise payable (or in the case of redemption, on the redemption
date), then a holder of Preferred Securities may directly institute a proceeding
against the Company for the enforcement of payment to such holder of the
principal of or interest on the Subordinated Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder (a "Direct Action") on or after the respective due
dates specified in the Subordinated Debentures. In connection with such Direct
Action, the Company will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by the
Company to such holder of Preferred Securities in connection with such Direct
Action. See "Description of the Preferred Securities--Declaration Events of
Default" and "--Voting Rights."
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCE OF EXTENSION. So
long as no Indenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture to defer payments of interest on the
Subordinated Debentures by extending the interest payment period at any time,
and from time to time, on the Subordinated Debentures. As a consequence of such
an extension, quarterly distributions on the Preferred Securities would be
deferred (but, despite such deferral, interest would continue to accrue with
interest thereon compounded quarterly) by the Trust during any such Extension
Period. Such right to extend the interest payment period for the Subordinated
Debentures is limited to an Extension Period not exceeding 20 consecutive
quarters and not beyond the Stated Maturity of the Subordinated Debentures. In
the event that the Company exercises this right to defer interest payments, the
Company shall not during such Extension Period (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock or (ii) make any payment of principal
of, or interest or premium, if any, on or repay, repurchase or redeem, or make
any sinking fund payment with respect to, any indebtedness of the
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Company (including other junior subordinated debt securities) that ranks pari
passu with or junior in right of payment to the Subordinated Debentures or make
any guarantee payments with respect to the foregoing (other than (a) dividends
or distributions in common stock of the Company, (b) redemptions or purchases of
any rights pursuant to the Company's Stock Purchase Rights Plan, or any
successor to such Stock Purchase Rights Plan, and the declaration of a dividend
of such rights or the issuance of preferred stock under such plans in the
future, (c) payments under the Guarantee, (d) purchases of common stock related
to the issuance of common stock under the Company's Stock Purchase and Dividend
Reinvestment Plan and any of the Company's benefit plans for its directors,
officers or employees and (e) purchases of common stock required to prevent the
loss or secure the renewal or reinstatement of any government license or
franchise held by the Company or any of its subsidiaries). Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period; provided that, such Extension Period, together with all
such previous and further extensions within such Extension Period, may not
exceed 20 consecutive quarters or beyond the Stated Maturity of the Subordinated
Debentures. Upon the termination of any Extension Period and the payment of all
amounts then due, the Company may commence a new Extension Period, subject to
the above requirements. As a result, there could be multiple Extension Periods
of varying lengths throughout the term of the Subordinated Debentures. See
"Description of the Preferred Securities--Distributions" and "Description of the
Subordinated Debentures-- Option to Extend Interest Payment Period."
Should the Company exercise its right to defer payments of interest by
extending the interest payment period, each holder of Preferred Securities will
be required to accrue income as OID in respect of the deferred interest
allocable to its Preferred Securities for United States federal income tax
purposes, which will be allocated but not distributed to holders of record of
Preferred Securities. As a result, each such holder of Preferred Securities will
recognize income for United States federal income tax purposes in advance of the
receipt of cash and will not receive the cash from the Trust related to such
income if such holder disposes of its Preferred Securities prior to the record
date for the date on which distributions of such amounts are made. The Company
has no current intention of exercising its right to defer payments of interest
by extending the interest payment period on the Subordinated Debentures.
Moreover, because of the consequences of exercising such right, including a
prohibition on the payment of dividends with respect to the Company's capital
stock, the Company believes that the likelihood of such exercise is remote.
However, should the Company determine to exercise such right in the future, the
market price of the Preferred Securities is likely to be affected. A holder that
disposes of its Preferred Securities during an Extension Period, therefore,
might not receive the same return on its investment as a holder that continues
to hold its Preferred Securities. In addition, as a result of the Company's
right to defer interest payments, the market price of the Preferred Securities
(which represent an undivided beneficial interest in the Subordinated
Debentures) may be more volatile than other securities on which OID accrues but
with respect to which there is no right to defer interest payments. See "Certain
Federal Income Tax Consequences--Original Issue Discount."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF THE SUBORDINATED
DEBENTURES. Upon the occurrence and continuation of a Special Event, as
described under "Description of the Preferred Securities--Redemptions--Special
Event Redemption of Subordinated Debentures," the Company has the right, at any
time, to redeem the Subordinated Debentures, in whole and not in part, at the
Debenture Redemption Price and thereby cause a redemption of the Preferred
Securities, in whole and not in part, at the Redemption Price within 90 days
following the occurrence of such Special Event. In addition, the Company will
have the right at any time to dissolve the Trust and, after satisfaction of
liabilities to creditors of the Trust, if any, as provided by applicable law, to
cause the Subordinated Debentures to be distributed to the holders of the
Preferred Securities in liquidation of the Trust. See "Description of the
Subordinated Debentures-- Distribution of the Subordinated Debentures."
Under current United States federal income tax law, a distribution of
Subordinated Debentures upon a Liquidation would not be a taxable event to
holders of the Preferred Securities. If, however, a
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Liquidation occurred and it was determined that the Trust was subject to United
States federal income tax with respect to amounts received or accrued on the
Subordinated Debentures at the time of such Liquidation, then the distribution
of the Subordinated Debentures would be a taxable event to holders of Preferred
Securities. Under current United States federal income tax law, the redemption
of the Subordinated Debentures upon the occurrence of a Special Event or a
Liquidation in which holders of the Preferred Securities receive cash would be a
taxable event to such holders. See "Certain Federal Income Tax
Consequences--Distribution of Subordinated Debentures or Cash On Liquidation of
the Trust."
The Company cannot predict the market prices for the Preferred Securities or
the Subordinated Debentures that may be distributed in exchange for Preferred
Securities if a Liquidation were to occur. The Preferred Securities or the
Subordinated Debentures may trade at a discount to the price that the investor
paid to purchase the Preferred Securities offered hereby. Because holders of
Preferred Securities may receive Subordinated Debentures, prospective purchasers
of Preferred Securities are also making an investment decision with regard to
the Subordinated Debentures and should carefully review all the information
regarding the Subordinated Debentures and the Company contained or incorporated
by reference herein.
EXTENDING THE STATED MATURITY OF THE SUBORDINATED DEBENTURES. The Company
will have the one-time right at any time to extend the Stated Maturity of the
Subordinated Debentures to a date not later than , 2047.
LIMITED VOTING RIGHTS. Holders of Preferred Securities will have limited
voting rights and will not be entitled to vote to appoint, remove or replace, or
to increase or decrease the number of, the Regular Trustees, which voting rights
are vested exclusively in the Company as the holder of the Common Securities.
See "Description of the Preferred Securities--Voting Rights."
TRADING PRICE. The Preferred Securities may trade at a price that does not
fully reflect the value of accrued but unpaid interest with respect to the
underlying Subordinated Debentures. A holder who disposes of Preferred
Securities between record dates for payments of distributions thereon (and
consequently does not receive a distribution from the Trust for the period prior
to such disposition) will nevertheless be required to include in gross income
for United States federal income tax purposes such holder's ratable share of
accrued but unpaid interest (or OID) on the Subordinated Debentures through the
date of disposition as ordinary income. To the extent the selling price (which
may not reflect the value of accrued and unpaid interest (or OID)) is less than
the holder's adjusted tax basis, the holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences--Sales of Preferred Securities."
CONSEQUENCE OF HIGHLY LEVERAGED TRANSACTION. The Indenture does not contain
provisions that afford holders of the Subordinated Debentures protection in the
event of a highly leveraged transaction, including a change in control, or other
similar transactions involving the Company that may adversely affect such
holders. See "Description of the Subordinated Debentures--Consolidation, Merger
and Sale of Assets."
FACTORS RELATING TO THE MERGERS
UNCERTAINTIES IN INTEGRATING THE COMPANIES AND ACHIEVING COST SAVINGS. The
Company and Sierra Pacific have entered into the Merger Agreement with the
expectation that the Mergers will result in certain benefits, including, without
limitation, cost savings, operating efficiencies, cost avoidances and other
synergies. Achieving the benefits of the Mergers will depend in substantial part
upon the receipt of timely and favorable regulatory approvals and upon the
successful integration of the businesses of the Company and Sierra Pacific in an
efficient manner, and there can be no assurance that this will occur. The
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consolidation of operations will require substantial attention from management.
Any diversion of management's attention and any difficulties encountered in the
transition and integration process could have a material adverse effect on the
revenues, levels of expenses and operating results of the combined company.
There can be no assurance that the combined company will realize any of the
anticipated benefits of the Mergers.
REFINANCING OF SECURITIES. All securities of the Company outstanding at the
time the Mergers are consummated, including the Company's first mortgage bonds,
pollution control revenue bonds and junior subordinated debentures (including
the Subordinated Debentures), will be assumed by the Surviving Corporation (as
defined herein) without the need for any consent or approval of the holders
thereof. In the case of certain securities issued for the benefit of the
Company, the interest on which is exempt from federal income taxation ($541
million outstanding), the Company must receive an opinion of nationally
recognized bond counsel that the Mergers will not have an adverse affect on such
tax exemption. The Company will seek such opinions where required. In the event
such opinions cannot be obtained, it may be necessary to redeem or otherwise
retire and refinance such securities. If it should be necessary for the Company
to retire any of the tax exempt securities, the Company anticipates that it
would, subject to approval from the PUCN, issue taxable securities of similar
maturities and use the proceeds to retire the required amount of existing tax
exempt securities. Depending on market conditions, the interest cost of
refunding securities could be significantly higher than the interest cost of the
current tax exempt securities. The Company believes it would have access to the
capital markets to effect such refinancing on reasonable terms although no
assurance can be given as to the success of any such refinancing.
DIVESTITURE OF GENERATION. As part of the proposal to the PUCN for approval
of the Mergers, the Company and Sierra Pacific have proposed that they each sell
all their existing generating capacity. Upon such sales, the Company and SPPC
would no longer be responsible for providing adequate generating capacity except
possibly in limited circumstances as the "provider of last resort." The
uncertainties surrounding divestiture include the price that generation assets
will bring, the regulatory treatment of any gain or loss from the sale of assets
and the ability to effectively use the proceeds of sales in the companies'
businesses. No assurance can be given that the divestiture of generating
facilities will be successful or that the Company or SPPC would not experience
operating or other business difficulties following such divestiture.
THE MERGERS
The Company and Sierra Pacific announced on April 30, 1998 that their boards
of directors had unanimously approved the Merger Agreement providing for a
merger of equals that would create a company with a total market capitalization
of approximately $4.0 billion.
The combined entity, which will be named Sierra Pacific Resources, will
serve a total of more than 800,000 electric, 100,000 gas and 65,000 water
customers living in southern and northern Nevada, and in the Lake Tahoe area of
California. As a result of the Mergers, Sierra Pacific will be the holding
company for the Surviving Corporation, SPPC and other subsidiaries. Sierra
Pacific is a utility holding company with operating subsidiaries primarily
engaged in the energy and utility businesses. Sierra Pacific's five primary
subsidiaries include: SPPC, Tuscarora Gas Pipeline Company, Sierra Energy
Company, d/b/a e-three, Lands of Sierra, Inc. and Sierra Pacific Energy Company.
Sierra Pacific's principal subsidiary, SPPC, provides electric service to
northern Nevada and northeastern California, and provides natural gas and water
service to the Reno/Sparks area of Nevada. The assets of SPPC represented 99% of
the consolidated assets of Sierra Pacific at December 31, 1997.
The Merger Agreement provides for two mergers. First, Sierra Pacific will
merge with LAKE Merger Sub, Inc., a wholly owned subsidiary of Sierra Pacific,
with Sierra Pacific as the surviving corporation (the "First Merger").
Immediately after the First Merger, DESERT Merger Sub, Inc., a wholly owned
subsidiary of Sierra Pacific will merge with the Company, with DESERT Merger
Sub, Inc. as the surviving
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corporation (the "Second Merger" and together with the First Merger, the
"Mergers"). DESERT Merger Sub, Inc. will change its name to Nevada Power Company
(the "Surviving Corporation"). Upon consummation of the Mergers, the Surviving
Corporation and SPPC will be subsidiaries of Sierra Pacific, with both companies
retaining their individual names and identities in their respective service
territories.
Following the Mergers, the corporate organization of Sierra Pacific will be
as follows:
[Corporate Organization Chart of Sierra Pacific]
The obligations of the Company, on the one hand, and Sierra Pacific, on the
other hand, to consummate the Mergers are subject to the satisfaction of several
conditions, including, but not limited to the approval of the Merger Agreement
by the stockholders of each of the Company and Sierra Pacific, the receipt of
all material governmental approvals including approvals by the PUCN and the
Federal Energy Regulatory Commission and the absence of any material adverse
change with respect to the Company or Sierra Pacific.
The Merger Agreement may be terminated under certain circumstances,
including by mutual written consent of Sierra Pacific and the Company, by either
party if the Mergers are not consummated by October 29, 1999 (which date will be
extended to April 29, 2000 in certain circumstances), by either party if the
requisite stockholder approvals are not obtained or if any state or federal law
or court order prohibits consummation of the Mergers, by a non-breaching party
if there occurs a material breach by the other party of the Merger Agreement
which is not cured within 20 days after notice, or by either party, in certain
circumstances, as a result of a more favorable third-party tender offer or
business combination proposal with respect to such party.
All securities of the Company outstanding at the time the Mergers are
consummated, including the Company's first mortgage bonds, pollution control
revenue bonds and junior subordinated debentures (including the Subordinated
Debentures), will be assumed by the Surviving Corporation without the need for
any consent or approval of the holders thereof.
The Company believes that the First Merger will be treated in a manner
similar to a pooling of interests for accounting purposes. The Second Merger
will be treated for accounting purposes in accordance with the rules for
purchase accounting. In connection with the Second Merger, for accounting
purposes, the assets and liabilities of Sierra Pacific will be recorded on the
books of the Company (as if it were the surviving parent of the consolidated
entity) at their estimated fair market values with the remaining purchase price
reflected as goodwill. The transaction will be treated as a reverse acquisition
with the Company being the acquirer for accounting purposes. Accordingly, the
historical financial information of the merged entity will reflect that of the
Company so that no merger-related adjustments will be made to the historical
financial statements of the Company.
For more information pertaining to the Mergers, see the Company's Current
Report on Form 8-K dated April 29, 1998. See "Incorporation of Certain
Information by Reference."
Certain matters discussed in this section and "Risk Factors--Factors
Relating to the Mergers" constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. The
forward-looking statements relate to the anticipated plans and objectives of
management for future operations, business prospects, outcome of regulatory
proceedings, market conditions and other matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements in certain circumstances. Forward-looking statements include the
information concerning possible or assumed future results of operations of the
Surviving Corporation and Sierra Pacific, as the combined company, and other
future events set forth herein. Readers are cautioned not to place undue
16
<PAGE>
reliance on such forward-looking statements, which involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors may affect the Company's operations,
markets, products, services and prices. The Company does not assume any
obligation to update such forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting such
forward-looking statements.
17
<PAGE>
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust, dated as of March 23, 1998, executed by the
Company, as Sponsor, and the trustees of the Trust and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware on
March 23, 1998. Such declaration will be amended and restated in its entirety
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The Declaration will be qualified as an
indenture under the Trust Indenture Act. Upon issuance of the Preferred
Securities, the purchasers thereof will own all of the Preferred Securities. See
"Description of the Preferred Securities-- Book-Entry Only Issuance--The
Depository Trust Company." The Company will acquire Common Securities in an
aggregate liquidation amount equal to 3% of the total capital of the Trust. The
Trust exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from such sale to acquire the Subordinated
Debentures, and (iii) engaging in only those other activities necessary or
incidental thereto. The Trust has a term of 55 years but may terminate earlier
as provided in the Declaration.
Pursuant to the Declaration, the number of trustees of the Trust will
initially be four. Two of the trustees of the Trust (the "Regular Trustees")
will be persons who are employees or officers of, or who are affiliated with,
the Company. The third trustee, Delaware Trust Capital Management, Inc., is a
financial institution that maintains its principal place of business in the
state of Delaware and is unaffiliated with the Company. Except as otherwise
provided in the Declaration, the Delaware Trustee's sole duty shall be to, upon
the request of the other Trustees or the Company, execute any documents and
maintain custody of any records required to maintain the existence of, or
dissolve, the Trust under the Delaware Business Trust Act (the "Trust Act"). The
fourth trustee, IBJ Schroder, will serve as Property Trustee under the
Declaration and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act, until removed or replaced by the Company,
as the holder of all the Common Securities. IBJ Schroder will also act as the
Guarantee Trustee. See "Description of the Guarantee."
The Property Trustee will hold title to the Subordinated Debentures for the
benefit of the holders of the Trust Securities and will have the power to
exercise all rights, powers, and privileges under the Indenture as the
registered holder of the Subordinated Debentures. In addition, the Property
Trustee will maintain exclusive control of a segregated non-interest bearing
bank account (the "Property Account") to hold all payments made in respect of
the Subordinated Debentures for the benefit of the holders of the Trust
Securities. The Property Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Guarantee Trustee will
hold the Guarantee for the benefit of the holders of the Preferred Securities.
The Company, as the holder of the Common Securities, or the holders of a
majority in aggregate liquidation amount of the Preferred Securities if a
Declaration Event of Default has occurred and is continuing, will have the right
to appoint, remove or replace the Property Trustee or the Delaware Trustee. The
Company, as the holder of the Common Securities, will have the exclusive right
to appoint, remove or replace any Regular Trustee and to increase or decrease
the number of the Trustees. The Company will pay all debts and obligations of
the Trust (other than with respect to the Trust Securities), including all fees
and expenses related to the Trust and the offering of the Trust Securities. See
"Description of the Subordinated Debentures--Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Trust Act and the Trust Indenture Act. See "Description of the
Preferred Securities."
18
<PAGE>
SELECTED FINANCIAL AND OPERATING INFORMATION
The following selected financial data for the five years ended December 31,
1997 and as of each of the five years ended December 31, 1997 are derived from
the audited financial statements of the Company. The following selected data as
of and for the six month periods ended June 30, 1998 and 1997 have been derived
from financial statements of the Company that have not been audited, but that,
in the opinion of the management of the Company, reflect all adjustments
necessary for the fair presentation of such data for the interim periods. The
results of operations for the six months ended June 30, 1998 are not necessarily
indicative of the results of operations for the full year. This financial
information should be read in conjunction with the financial statements and
related notes thereto incorporated herein by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 and Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Electric revenues........... $ 364,198 $ 355,324 $ 799,148 $ 805,374 $ 749,981 $ 764,158 $ 651,772
Operating expenses.......... 299,592 279,507 597,410 608,616 579,105 593,907 489,624
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings before income
taxes..................... 64,606 75,817 201,738 196,758 170,876 170,251 162,148
Interest expense............ 27,666 24,372 49,743 49,486 46,936 43,015 39,305
Taxes....................... 18,555 24,079 64,542 64,528 53,318 56,454 53,679
Other income (expenses)..... 3,871 2,458 3,019 (3,876) 6,349 11,088 4,384
Distribution requirements on
Company-obligated
mandatorily redeemable
preferred securities of
subsidiary trust.......... 4,874 2,383 7,256 -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income.................. 17,382 27,441 83,216 78,868 76,971 81,870 73,548
Dividend requirements on
preferred stock........... 89 1,034 1,125 3,956 3,966 3,976 3,986
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings available for
common stock.............. $ 17,293 $ 26,407 $ 82,091 $ 74,912 $ 73,005 $ 77,894 $ 69,562
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Weighted average common
shares outstanding........ 50,751 49,294 49,691 47,976 46,288 42,784 39,482
Earnings per average common
share..................... $ 0.34 $ 0.54 $ 1.65 $ 1.56 $ 1.58 $ 1.82 $ 1.76
Dividends declared per
common share.............. $ 0.80 $ 0.80 $ 1.60 $ 1.60 $ 1.60 $ 1.60 $ 1.60
Twelve months ended ratio of
earnings to fixed
charges(1)................ 2.41 2.88 2.76 2.92 2.84 3.11 2.90
CASH FLOW DATA:
Cash from operating
activities................ $ 31,557 $ 24,047 $ 110,372 $ 154,990 $ 185,919 $ 144,270 $ 130,945
Cash from investing
activities................ (116,445) (97,723) (214,013) (180,801) (160,828) (184,349) (165,858)
Cash from financing
activities................ 84,743 71,795 101,817 2,848 293 40,057 34,898
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease)
during the period......... $ (145) $ (1,881) $ (1,824) $ (22,963) $ 25,384 $ (22) $ (15)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Net property, plant &
equipment................. $2,041,720 $1,877,635 $1,960,709 $1,819,330 $1,701,120 $1,584,003 $1,450,146
Total assets................ 2,466,646 2,251,267 2,339,422 2,163,224 2,073,050 1,907,389 1,809,337
Long-term debt.............. 892,858 823,492 895,439 841,364 799,999 712,571 716,589
Company-obligated
mandatorily redeemable
preferred securities of
the Company's subsidiary
trust, NVP Capital I,
holding solely $122.6
million principal amount
of 8.2% junior
subordinated debentures of
the Company due 2037...... 118,872 118,872 118,872 -- -- -- --
Stockholders' equity........ 829,890 806,896 837,086 841,817 806,224 773,813 688,188
</TABLE>
- ------------------------------
(1) In computing the ratio of earnings to fixed charges, earnings represent
income before interest expense and distribution requirements, plus income
taxes; fixed charges represent interest expense, distribution requirements,
amortization of debt discount, premium and expense and other interest plus
one-third annual rentals.
SELECTED OPERATING INFORMATION
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-------------------- ----------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Electric Sales (megawatt
hours, in thousands)... 6,385,735 6,572,154 14,596,228 13,697,059 12,109,355 11,942,724 11,155,270
</TABLE>
20
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of June
30, 1998 and as adjusted to give effect to the sale of $70 million Trust Issued
Preferred Securities. The following data should be read in conjunction with the
financial statements and notes thereto and Management's Discussion and Analysis
of Financial Condition and Results of Operations of the Company incorporated
herein by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 and Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998.
<TABLE>
<CAPTION>
AS OF JUNE 30, 1998
------------------------------------------------
(IN THOUSANDS)
ACTUAL % AS ADJUSTED %
------------ --------- ------------ ---------
<S> <C> <C> <C> <C>
DEBT:
Short-Term Debt and Current Maturities:.......................... $ 130,446 6.6% $ 130,446 6.4%
Secured Long-Term Debt:
Capital Leases................................................. 87,964 4.5% 87,964 4.3%
First Mortgage Bonds........................................... 427,257 21.7% 427,257 20.9%
Unsecured Debt:
Pollution Control Revenue Bonds................................ 73,300 3.7% 73,300 3.6%
Industrial Development Bonds................................... 304,038 15.4% 304,038 14.9%
8.50% Note Due 2000............................................ 300 * 300 *
------------ --------- ------------ ---------
TOTAL DEBT................................................... 1,023,305 51.8% 1,023,305 50.1%
PREFERRED SECURITIES:
Company-Obligated Mandatorily Redeemable Preferred Securities of
the Company's Subsidiary Trust, Holding Solely Subordinated
Debentures of the Company, Due 2037 (1)........................ 118,872 6.0% 118,872 5.8%
Company-Obligated Mandatorily Redeemable Preferred Securities of
the Company's Subsidiary Trust, Holding Solely Subordinated
Debentures of the Company, Due 2038 (2)........................ -- -- 70,000 3.4%
------------ --------- ------------ ---------
TOTAL PREFERRED SECURITIES................................... 118,872 6.0% 188,872 9.3%
SHAREHOLDERS' EQUITY:
Cumulative Preferred Stock with Mandatory Sinking Funds and
Redeemable Cumulative Preferred Stock.......................... 3,385 * 3,385 *
Common Shareholders' Equity...................................... 826,505 41.9% 826,505 40.5%
------------ --------- ------------ ---------
TOTAL SHAREHOLDERS' EQUITY................................... 829,890 42.1% 829,890 40.6%
------------ --------- ------------ ---------
TOTAL CAPITALIZATION............................................... $ 1,972,067 100% $ 2,042,067 100%
------------ --------- ------------ ---------
------------ --------- ------------ ---------
* Less than 1%
</TABLE>
- ------------------------
(1) The sole assets of NVP Capital I are $122,547,930 aggregate principal amount
of 8.20% Junior Subordinated Deferrable Interest Debentures, Series A of the
Company, including $3,676,430 attributable to the common securities of NVP
Capital I, all of which are held by the Company, and $118,871,500
attributable to the 8.20% Cumulative Quarterly Income Preferred Securities,
Series A, of NVP Capital I.
(2) The sole assets of the Trust will be $72,164,950 aggregate principal amount
of the Subordinated Debentures, including $2,164,950 attributable to the
Common Securities, all of which will be held by the Company, and $70,000,000
attributable to the Preferred Securities.
21
<PAGE>
USE OF PROCEEDS
The Trust will use the proceeds of the sale of the Trust Securities to
acquire the Subordinated Debentures from the Company. The Company will use the
net proceeds from the sale of the Subordinated Debentures for general corporate
utility purposes, which may include the repayment of short-term debt, capital
expenditures and working capital.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of the Company and, accordingly, the accounts of the Trust will be included in
the financial statements of the Company. The Preferred Securities will be
presented as a separate line item in the balance sheet of the Company and
appropriate disclosures about the Preferred Securities, the Guarantee and the
Subordinated Debentures will be included in the notes to the Company's financial
statements. For financial reporting purposes, the Company will record interest
payments on the Subordinated Debentures as an expense.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, IBJ Schroder, will act as indenture trustee
under the Declaration for purposes of compliance with the provisions of the
Trust Indenture Act. The terms of the Preferred Securities will include those
stated in the Declaration and those made part of the Declaration by the Trust
Indenture Act. The following summary of the principal terms and provisions of
the Preferred Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Declaration, a form of which is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part, the Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities will be owned by the
Company. The Common Securities rank PARI PASSU, and payments will be made
thereon on a PRO RATA basis with the Preferred Securities, except that upon the
occurrence of a Declaration Event of Default the rights of the holders of the
Common Securities to receive payment of periodic distributions and payments upon
Liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Preferred Securities. The Declaration does not permit the
issuance by the Trust of any securities other than the Trust Securities or the
incurrence of any indebtedness by the Trust. Pursuant to the Declaration, the
Property Trustee will own the Subordinated Debentures purchased by the Trust for
the benefit of the holders of the Trust Securities. The payment of distributions
out of money held by the Trust, and payments upon redemption of the Preferred
Securities or Liquidation, are guaranteed by the Company to the extent described
under "Description of the Guarantee." The Guarantee will be held by IBJ
Schroder, the Guarantee Trustee, for the benefit of the holders of the Preferred
Securities. The Guarantee does not cover payment of distributions when the Trust
does not have sufficient available funds to pay such distributions. In such
event, the remedy of a holder of Preferred Securities is to direct the Property
Trustee to enforce the Property Trustee's rights under the Declaration or the
Subordinated Debentures and, if the Property Trustee fails to enforce such
rights, to institute a Direct Action. See "--Declaration Events of Default."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will
22
<PAGE>
bear interest thereon at the rate per annum of % thereof compounded quarterly.
The term "distribution" as used herein includes any such interest payable unless
otherwise stated. Distributions on the Preferred Securities will be cumulative,
will accumulate from , 1998, and will be payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each year, commencing
December 31, 1998, when, as and if available for payment, by the Property
Trustee, except as otherwise described below. The amount of distributions
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months and for any period shorter than a full quarterly distribution
period, on the basis of the actual number of days elapsed per 30-day month.
So long as no Indenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture to defer payments of interest on the
Subordinated Debentures by extending the interest payment period at any time,
and from time to time, on the Subordinated Debentures, which, if exercised,
would defer quarterly distributions on the Preferred Securities (though such
distributions would continue to accumulate with interest since interest would
continue to accrue on the Subordinated Debentures) during any such Extension
Period. Such right to extend the interest payment period for the Subordinated
Debentures is limited to a period not exceeding 20 consecutive quarters and not
beyond the Stated Maturity of the Subordinated Debentures. In the event that the
Company exercises this right, then during such Extension Period the Company
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or (ii) make any payment of principal of, or interest or premium,
if any, on or repay, repurchase or redeem, or make any sinking fund payment with
respect to, any indebtedness of the Company (including other junior subordinated
debt securities) that ranks PARI PASSU with or junior in right of payment to the
Subordinated Debentures or make any guarantee payments with respect to the
foregoing (other than (a) dividends or distributions in common stock of the
Company, (b) redemptions or purchases of any rights pursuant to the Company's
Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan,
and the declaration of a dividend of such rights or the issuance of preferred
stock under such plans in the future, (c) payments under the Guarantee, (d)
purchases of common stock related to the issuance of common stock under the
Company's Stock Purchase and Dividend Reinvestment Plan and any of the Company's
benefit plans for its directors, officers or employees and (e) purchases of
common stock required to prevent the loss or secure the renewal or reinstatement
of any government license or franchise held by the Company or any of its
subsidiaries). Prior to the termination of any such Extension Period, the
Company may further extend the interest payment period; provided that, such
Extension Period, together with all such previous and further extensions within
such Extension Period, may not exceed 20 consecutive quarters or the Stated
Maturity of the Subordinated Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may select a new
Extension Period, subject to the above requirements. As a result, there could be
multiple Extension Periods of varying lengths throughout the term of the
Subordinated Debentures. See "Description of the Subordinated
Debentures--Interest" and "--Option to Extend Interest Payment Period." If
distributions are deferred, the deferred distributions and accrued interest
thereon will be paid to holders of record of the Preferred Securities as they
appear on the books and records of the Trust on the record date next following
the termination of the applicable Extension Period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from the Company on the Subordinated Debentures. The payment
of distributions out of moneys held by the Trust is guaranteed by the Company to
the extent set forth under "Description of the Guarantee."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
only form, will be one Business Day prior to the relevant payment dates. Such
distributions will be paid through the Property Trustee who will hold amounts
received in respect of the
23
<PAGE>
Subordinated Debentures in the Property Account for the benefit of the holders
of the Trust Securities. Subject to any applicable laws and regulations and the
provisions of the Declaration, as long as the Preferred Securities remain in
book-entry only form, each such payment will be made as described under
"--Book-Entry Only Issuance--The Depository Trust Company." In the event that
the Preferred Securities cease to be in book-entry only form, the relevant
record dates for the Preferred Securities shall conform to the rules of any
securities exchange on which the Preferred Securities are listed and, if none,
shall be selected by the Regular Trustees, which dates shall be at least 15
Business Days but less than 60 Business Days before the relevant payment dates,
which payment dates correspond to the interest payment dates on the Subordinated
Debentures, and distributions will be payable at the corporate trust office of
the Property Trustee. In the event that any date on which distributions are to
be made on the Preferred Securities is not a Business Day, then payment of the
distributions payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. A
"Business Day" means any day other than a day on which banking institutions in
New York, New York are authorized or required by law to close.
REDEMPTIONS
MANDATORY REDEMPTION. Upon the repayment of the Subordinated Debentures at
Stated Maturity or upon redemption thereof, in whole or in part (as described
below and under "Description of the Subordinated Debentures--Optional
Redemption"), the proceeds from such repayment or redemption will simultaneously
be applied to redeem Preferred Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Subordinated Debentures so repaid
or redeemed at the Redemption Price; provided that, holders of Preferred
Securities are given not less than 30 nor more than 60 days' notice of such
redemption. In the event that fewer than all of the outstanding Preferred
Securities are to be redeemed, so long as the Preferred Securities remain in
book-entry only form, the Preferred Securities will be redeemed PRO RATA as
described under "--Book-Entry Only Issuance--The Depository Trust Company."
OPTIONAL REDEMPTION OF SUBORDINATED DEBENTURES. The Company will have the
right to redeem the Subordinated Debentures, in whole or in part, from time to
time, on or after , 2003, at the Debenture Redemption Price and thereby
cause a mandatory redemption of Preferred Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Debentures so redeemed at the Redemption Price. See "Description of the
Subordinated Debentures--Optional Redemption."
SPECIAL EVENT REDEMPTION OF SUBORDINATED DEBENTURES. Upon the occurrence
and continuation of a Special Event, the Company shall have the right, at any
time, to redeem the Subordinated Debentures, in whole and not in part, at the
Debenture Redemption Price and thereby cause a mandatory redemption of the
Preferred Securities, in whole and not in part, at the Redemption Price within
90 days following the occurrence of such Special Event.
If a Special Event occurs and the Company does not elect to redeem the
Subordinated Debentures or to dissolve the Trust, the Preferred Securities will
remain outstanding and, if such Special Event is a Tax Event (as defined below),
Additional Interest (as described under "Description of the Subordinated
Debentures--Certain Covenants") will be payable on the Subordinated Debentures.
See "--Liquidation Distribution Upon Dissolution" and "Description of the
Subordinated Debentures--Distribution of the Subordinated Debentures."
"Special Event" means the occurrence of an Investment Company Act Event or a
Tax Event.
"Investment Company Act Event" means receipt by the Trust or the Company of
an opinion of a nationally recognized independent counsel experienced in such
matters to the effect that, as a result of a
24
<PAGE>
change in law or regulation or a written change in interpretation or application
of law or regulation by any legislative body, court, governmental agency or
regulatory authority after the date of this Prospectus, there is more than an
insubstantial risk that the Trust is or will be considered an investment company
under the Investment Company Act of 1940 (the "1940 Act").
"Tax Event" means receipt by the Trust or the Company of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (i) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (ii) any amendment to or change in an interpretation or application of
such laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after the
date of this Prospectus), (iii) any interpretation or pronouncement by any such
body, court, agency or authority that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (iv) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated or effective, or
which interpretation or pronouncement is issued or announced, or which action is
taken, in each case on or after the date of this Prospectus, there is more than
an insubstantial risk that (a) the Trust is, or within 90 days of the date
thereof will be, subject to United States federal income tax with respect to
income accrued or received on the Subordinated Debentures, (b) interest payable
by the Company on the Subordinated Debentures is not, or within 90 days of the
date thereof will not be, deductible by the Company for United States federal
income tax purposes or (c) the Trust is, or within 90 days of the date thereof
will be, subject to more than a DE MINIMIS amount of other taxes, duties or
other governmental charges.
It has been reported that the Internal Revenue Service (the "IRS") has
challenged the deductibility, for United States federal income tax purposes, of
interest payments on an instrument similar in some respects to the Subordinated
Debentures, held by an entity similar in some respects to the Trust. The Company
and the Trust do not believe that this challenge will affect the Company's
ability to deduct interest payments on the Subordinated Debentures. However,
prospective investors should be aware that further developments favoring the
IRS's challenge, or other unrelated developments, could give rise to a Tax
Event. See "Certain Federal Income Tax Consequences."
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accumulated and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred Securities
(which notice will be irrevocable), then, (i) while the Preferred Securities are
in book-entry only form, by 12:00 noon, New York City time, on the redemption
date, provided the Company has paid to the Property Trustee a sufficient amount
of cash in connection with the related redemption or Stated Maturity of the
Subordinated Debentures, then the Property Trustee will irrevocably deposit with
the Depositary funds sufficient to pay the applicable Redemption Price and will
give the Depositary irrevocable instructions and authority to pay the Redemption
Price to the holders of the Preferred Securities or (ii) if the Preferred
Securities are no longer in book-entry only form, provided the Company has paid
to the Property Trustee a sufficient amount of cash in connection with the
related redemption or Stated Maturity of the Subordinated Debentures, then the
Property Trustee will pay the relevant Redemption Price to the holders of such
Preferred Securities by check mailed to the address of the relevant holder
appearing on the books and records of the Trust on the redemption date upon
surrender of their certificates evidencing such Preferred Securities. If notice
of redemption has been given and funds deposited as required, then, immediately
prior to the close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accumulate and all rights of
holders of such Preferred Securities so called for redemption will
25
<PAGE>
cease, except the right of the holders of such Preferred Securities to receive
the Redemption Price but without interest on such Redemption Price. In the event
that any date fixed for redemption of the Preferred Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. In the event that payment of the Redemption
Price in respect of the Preferred Securities is improperly withheld or refused
and not paid either by the Trust, or by the Company pursuant to the Guarantee,
distributions on such Preferred Securities will continue to accumulate at the
then applicable rate from the original redemption date to the date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities are
to be redeemed, the Preferred Securities will be redeemed PRO RATA as described
below under "--Book-Entry Only Issuance-- The Depository Trust Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the Company or its subsidiaries may at
any time, and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any Liquidation, the holders of the Preferred Securities on
the date of such Liquidation will be entitled to receive out of the assets of
the Trust available for distribution to holders of the Preferred Securities,
after satisfaction of liabilities to creditors of the Trust, distributions in an
amount equal to the aggregate of the stated liquidation amount of $25 per
Preferred Security plus accumulated and unpaid distributions thereon (including
interest thereon) to the date of payment (the "Liquidation Distribution"),
unless, in connection with such Liquidation, Subordinated Debentures in an
aggregate principal amount equal to the aggregate stated liquidation amount of
such Preferred Securities shall be distributed on a PRO RATA basis to the
holders of the Preferred Securities in exchange for such Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities must be paid on a PRO RATA basis. The holders
of the Common Securities will be entitled to receive distributions upon any such
Liquidation PRO RATA with the holders of the Preferred Securities, except that
if a Declaration Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities with regard to
such distributions.
Pursuant to the Declaration, the Trust will terminate the earlier of (i)
December 31, 2053, the expiration of the term of the Trust, (ii) the filing of a
bankruptcy petition arising under federal or state laws by, or the insolvency
of, the Company or the holder of the Common Securities, (iii) the filing of a
certificate of dissolution or its equivalent with respect to the holder of the
Common Securities or the Company, the filing of a certificate of cancellation
with respect to the Trust, or the revocation of the charter of the holder of the
Common Securities or the Company and the expiration of 90 days after the date of
revocation without a reinstatement thereof, (iv) the entry of a decree of a
judicial dissolution of the holder of the Common Securities, the Company or the
Trust, (v) the redemption of all the Trust Securities in accordance with the
terms of the Trust Securities and (vi) the delivery of written direction to the
Property Trustee by the Company at any time (which direction is wholly optional
and within the discretion of the Company) to dissolve the Trust and distribute
the Subordinated Debentures to the holders of the Trust Securities.
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DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"), provided that, pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived, or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under the Declaration, and therefore the Indenture.
If the Property Trustee fails to enforce its rights under the Declaration or
the Subordinated Debentures, such holder may institute a legal proceeding
against the Company to enforce the Property Trustee's rights under the
Declaration or the Subordinated Debentures without first instituting any legal
proceeding against the Trustee or any other person or entity. Notwithstanding
the foregoing, if a Declaration Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to pay interest or
principal on the Subordinated Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, the redemption date), then a
holder of Preferred Securities may institute a Direct Action for enforcement of
payment to such holder of the principal of or interest on the Subordinated
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due dates specified in the Subordinated Debentures. In connection
with such Direct Action, the Company will be subrogated to the rights of such
holder of Preferred Securities under the Declaration to the extent of any
payment made by the Company to such holder of Preferred Securities in such
Direct Action. The holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Subordinated
Debentures.
Upon the occurrence of a Declaration Event of Default, the Property Trustee
as the sole holder of the Subordinated Debentures will have the right under the
Indenture to declare the principal of and interest on the Subordinated
Debentures to be immediately due and payable. The Company and the Trust are each
required to file annually with the Property Trustee an officer's certificate as
to their compliance with all conditions and covenants under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act and
under "Description of the Guarantee," and as otherwise required by law and the
Declaration, the holders of the Preferred Securities will have no voting rights.
Subject to the requirement of the Property Trustee obtaining a tax opinion
in certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee or to direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration, including (i) the right to direct the Property Trustee, as
registered holder of the Subordinated Debentures, to exercise the remedies
available under the Indenture with respect to the Subordinated Debentures, (ii)
waiving any past Indenture Event of Default that is waivable under the
Indenture, or (iii) exercising any right to rescind or annul a declaration that
the principal of all the Subordinated Debentures shall be due and payable;
PROVIDED, HOWEVER, that, where a consent or action under the Indenture would
require the consent or act of all of the holders of the Subordinated Debentures,
all of the holders of the Preferred Securities may direct the Property Trustee
to give such consent or take such action. If the Property Trustee fails to
enforce its rights under the
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Declaration or the Subordinated Debentures, a holder of Preferred Securities may
institute a legal proceeding directly against the Company to enforce the
Property Trustee's rights under the Declaration or the Subordinated Debentures
without first instituting any legal proceeding against the Property Trustee or
any other person or entity. Notwithstanding the foregoing, if a Declaration
Event of Default has occurred and is continuing and such event is attributable
to the failure of the Company to pay interest or principal on the Subordinated
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, the redemption date), then a holder of Preferred
Securities may institute a Direct Action for enforcement of payment to such
holder of the principal of or interest on the Subordinated Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder on or after the respective due dates
specified in the Subordinated Debentures. In connection with such Direct Action,
the Company will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by the
Company to such holder of Preferred Securities in connection with such Direct
Action. The Property Trustee must notify all holders of the Preferred Securities
of any notice of default received from the Indenture Trustee with respect to the
Subordinated Debentures. Such notice will state that such Indenture Event of
Default also constitutes a Declaration Event of Default. Except with respect to
directing the time, method and place of conducting a proceeding for a remedy,
the Property Trustee will not take any of the actions described in clauses (i),
(ii) or (iii) above unless the Property Trustee has obtained an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of such action, the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Debentures, is required under the Indenture with respect to any
amendment, modification, waiver or termination of the Indenture, the
Subordinated Debentures, the Preferred Securities Guarantee or the Common
Securities Guarantee, the Property Trustee will request the direction of the
holders of the Trust Securities with respect to such amendment, modification,
waiver or termination and will vote with respect to such amendment,
modification, waiver or termination as directed by a majority in aggregate
liquidation amount of the Trust Securities voting together as a single class;
PROVIDED, HOWEVER, that where a consent under the Indenture would require the
consent of all of the holders of the Subordinated Debentures, the Property
Trustee may only give such consent at the direction of the holders of all of the
Trust Securities. The Property Trustee will be under no obligation to take any
such action in accordance with the directions of the holders of the Trust
Securities unless the Property Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may be
given by the Property Trustee at the direction of the holders of the Preferred
Securities at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or pursuant
to written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought, and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for the Trust to redeem
and cancel Preferred Securities or distribute Subordinated Debentures in
accordance with the Declaration and the terms of the Trust Securities.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by the
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Company or any entity directly or indirectly controlling or controlled by, or
under direct or indirect common control with, the Company, will not be entitled
to vote or consent and will, for purposes of such vote or consent, be treated as
if such Preferred Securities were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "--Book-Entry Only Issuance--The
Depository Trust Company" below.
Holders of the Preferred Securities will have no rights to appoint, remove
or replace, or to increase or decrease the number of, the Regular Trustees,
which voting rights are vested exclusively in the Company as the holder of all
of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by a majority of the
Regular Trustees (and in certain circumstances the Property Trustee), provided
that, if any proposed amendment provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) a Liquidation other than
pursuant to the terms of the Declaration, then the holders of the Trust
Securities voting together as a single class will be entitled to vote on such
amendment or proposal and such amendment or proposal will not be effective
except with the approval of at least 66 2/3% in aggregate liquidation amount of
the Trust Securities affected thereby; provided that a reduction of the
aggregate liquidation amount or the distribution rate, a change in the payment
dates or maturities of the Preferred Securities or a reduction in the percentage
in aggregate liquidation amount of outstanding Preferred Securities, the consent
of the holders of which is required for an amendment to the Declaration, shall
not be permitted without the consent of each holder of the Preferred Securities.
In the event any amendment or proposal referred to in clause (i) above would
adversely affect only the Preferred Securities or the Common Securities, then
only the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal will not be effective except with the approval of
66 2/3% in aggregate liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Property Trustee in contravention of the Trust Indenture Act or (iii) cause
the Trust to be deemed an "investment company" which is required to be
registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below. The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the holders of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that, (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust under the Trust
Securities or (b) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the "Successor
Securities"), so long as the Successor Securities rank the same as the Preferred
Securities with respect to distributions and payments upon liquidation,
redemption and maturity, (ii) the Company expressly acknowledges a trustee of
such successor entity possessing the same powers and duties of the Property
Trustee as the holder of the Subordinated Debentures, (iii) the Preferred
Securities or any Successor Securities are listed, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or with another organization on which the Preferred Securities are then
listed or quoted, (iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized
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statistical rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose identical to that of
the Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Company has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect that,
(a) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation or replacement, neither the
Trust nor such successor entity will be required to register as an investment
company under the 1940 Act and (viii) the Company guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust may not,
except with the consent of holders of 100% in aggregate liquidation amount of
the Trust Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it, if such consolidation,
amalgamation, merger or replacement would cause the Trust or such successor
entity to be classified as other than a grantor trust for United States federal
income tax purposes.
There are no provisions that afford the holders of the Preferred Securities
protection in the event of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving the Company. There are
also no provisions that require the repurchase of the Preferred Securities upon
a change in control of the Company.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depositary will act as securities depository for the Preferred
Securities. The Preferred Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (the Depositary's nominee). One
fully-registered global Preferred Securities certificate, representing the total
aggregate number of Preferred Securities, will be issued and deposited with the
Depositary or its custodian.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Preferred Securities
as represented by a global certificate.
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary holds securities that its participants ("Participants")
deposit with the Depositary. The Depositary also facilitates the settlement
among Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). The Depositary is owned by a number of
its Direct Participants and by the New York Stock Exchange, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the depository system is also available to others, such as securities brokers
and dealers, banks and trust companies that clear transactions through or
maintain a direct or indirect custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable to
the Depositary and its Participants are on file with the Commission.
Purchases of Preferred Securities within the depository system must be made
by or through Direct Participants, which will receive a credit for the Preferred
Securities on the Depositary's records. The ownership interest of each actual
purchaser of each Preferred Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written
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confirmation from the Depositary of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Preferred Securities, except in the event that
use of the book-entry system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited
by Participants with the Depositary are registered in the name of the
Depositary's nominee, Cede & Co. The deposit of Preferred Securities with the
Depositary or its custodian and their registration in the name of Cede & Co.
effect no change in beneficial ownership. The Depositary has no knowledge of the
actual Beneficial Owners of the Preferred Securities. The Depositary's records
reflect only the identity of the Direct Participants to whose accounts such
Preferred Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
So long as the Depositary, or its nominee, is the registered owner or holder
of a Global Certificate, the Depositary or such nominee, as the case may be,
will be considered the sole owner or holder of the Preferred Securities
represented thereby for all purposes under the Declaration and the Preferred
Securities. No beneficial owner of an interest in a global certificate
representing the Preferred Securities will be able to transfer that interest
except in accordance with the Depositary's applicable procedures, in addition to
those provided for under the Declaration.
The Depositary has advised the Company that it will take any action
permitted to be taken by a holder of Preferred Securities (including the
presentation of Preferred Securities for exchange as described below) only at
the direction of one or more Participants to whose account the beneficial
interests in the global certificate representing the Preferred Securities are
credited and only in respect of such portion of the aggregate liquidation amount
of Preferred Securities as to which such Participant or Participants has or have
been given such direction. If there is a Declaration Event of Default, however,
the Depositary will exchange the global certificate representing the Preferred
Securities for certificated Preferred Securities, which it will distribute to
its Participants.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Redemption notices will be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, the Depositary will reduce the amount
of the interest of each Direct Participant in such Preferred Securities PRO RATA
in accordance with its procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither the Depositary nor Cede & Co. will
itself consent or vote with respect to Preferred Securities. Under its usual
procedures, the Depositary would mail an Omnibus Proxy to the Trust as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co. consenting
or voting rights to those Direct Participants to whose accounts the Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy). The Company and the Trust believe that the arrangements
among the Depositary, Direct and Indirect Participants and Beneficial Owners
will enable the Beneficial Owners to exercise rights equivalent in substance to
the rights that can be directly exercised by a holder of a beneficial interest
in the Trust.
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Distribution payments on the Preferred Securities will be made to the
Depositary. The Depositary's practice is to credit Direct Participants' accounts
on the relevant payment date in accordance with their respective holdings shown
on the Depositary's records unless the Depositary has reason to believe that it
will not receive payment on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the account of customers in
bearer form or registered in "street name," and such payments will be the
responsibility of such Participants and not of the Depositary, the Trust or the
Company, subject to any statutory or regulatory requirements to the contrary
that may be in effect from time to time. Payment of distributions to the
Depositary is the responsibility of the Trust, disbursement of such payments to
Direct Participants is the responsibility of the Depositary, and disbursement of
such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
Except as provided herein, a Beneficial Owner in a global certificate
representing the Preferred Securities will not be entitled to receive physical
delivery of Preferred Securities. Accordingly, each Beneficial Owner must rely
on the procedures of the Depositary to exercise any rights under the Preferred
Securities.
The Depositary may discontinue providing its services as securities
depository with respect to the Preferred Securities at any time by giving
reasonable notice to the Trust. Under such circumstances, in the event that a
successor securities depository is not obtained, definitive Preferred Securities
certificates are required to be printed and delivered. The Regular Trustees
(after consultation with the Company) may decide to discontinue use of the
system of book-entry transfers through the Depositary (or any successor
depository) with respect to the Preferred Securities. If a Declaration Event of
Default has occurred, the holders of a majority in aggregate liquidation amount
of the Preferred Securities may also determine to discontinue use of the system
of book-entry transfers through the Depositary with respect to the Preferred
Securities. In any such event, definitive certificates for the Preferred
Securities will be printed and delivered.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
and the Trust believe to be reliable but neither the Company nor the Trust takes
responsibility for the accuracy thereof. Neither the Company, the Trust nor any
Trustee will have any responsibility for the performance by the Depositary or
its Direct Participants or Indirect Participants under the rules and procedures
governing the Depositary.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities, undertakes to perform only such duties as are specifically
set forth in the Declaration and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Property Trustee is under no obligation
to exercise any of the powers vested in it by the Declaration at the request of
any holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Property Trustee to take any action following a Declaration Event of
Default.
PAYING AGENT
The Property Trustee will act as paying agent and may designate an
additional or substitute paying agent at any time.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Trust, but upon payment (with such indemnity as
the Regular Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it.
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Neither the Regular Trustees nor the Trust shall be required to register or
cause to be registered the transfer of Preferred Securities after such Preferred
Securities have been called for redemption.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be (i) required to register as an
"investment company" under the 1940 Act or (ii) characterized as other than a
grantor trust for United States federal income tax purposes. The Company is
authorized and directed to conduct its affairs so that the Subordinated
Debentures will be treated as indebtedness of the Company for United States
federal income tax purposes. In this connection, the Company and the Regular
Trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust of the Trust, the Declaration or the charter of
the Company, that each of the Company and the Regular Trustees determines in its
discretion to be necessary or desirable to achieve such end, as long as such
action does not adversely affect the interests of the holders of the Preferred
Securities or vary the terms thereof.
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Subordinated
Debentures in which the Trust will invest the proceeds from the issuance and
sale of the Trust Securities. The following description does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Indenture, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
The Subordinated Debentures will be issued as unsecured indebtedness of the
Company under the Indenture. The Subordinated Debentures will be limited in
aggregate principal amount to approximately $72.2 million, such amount being the
sum of the aggregate stated liquidation amount of the Trust Securities.
The Subordinated Debentures are not subject to a sinking fund provision. The
entire principal amount of the Subordinated Debentures will mature and become
due and payable, together with any accrued and unpaid interest thereon including
Compound Interest and Additional Interest, if any, on , 2038,
subject to the one-time election of the Company to extend the scheduled maturity
date of the Subordinated Debentures to a date not later than , 2047,
which election is subject to the Company's satisfying certain financial
conditions. See "--Option to Extend Maturity Date." Any reference herein to
interest on the Subordinated Debentures shall be deemed to include any
Additional Interest or Compound Interest.
If Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, such
Subordinated Debentures will initially be issued as a Global Security (as
defined below). As described herein, under certain limited circumstances,
Subordinated Debentures may be issued in certificated form in exchange for a
Global Security. See "--Book-Entry and Settlement" and "--The Depositary." In
the event that Subordinated Debentures are issued in certificated form, such
Subordinated Debentures will be issued in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the offices described
below. Payments on Subordinated Debentures issued as a Global Security will be
made to the Depositary, a successor depository or, in the event that no
depository is
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used, to a paying agent for the Subordinated Debentures. In the event
Subordinated Debentures are issued in certificated form, principal and interest
will be payable, the transfer of the Subordinated Debentures will be registrable
and Subordinated Debentures will be exchangeable for Subordinated Debentures of
other denominations of a like aggregate principal amount at the corporate trust
office of the Indenture Trustee; provided that, payment of interest may be made
at the option of the Company by check mailed to the address of the persons
entitled thereto. Notwithstanding the foregoing, (i) so long as the holder of
the Subordinated Debentures is the Property Trustee, the payment of principal
and interest on the Subordinated Debentures held by the Property Trustee will be
made in immediately available funds at such place and to such account as may be
designated by the Property Trustee and (ii) so long as the Subordinated
Debentures are represented by a Global Security, the payment of principal of and
interest on the Subordinated Debentures will be made in immediately available
funds to the Depositary.
INTEREST
The Subordinated Debentures will bear interest at the rate of % per annum
from the original date of issuance, payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an "Interest Payment
Date"), commencing December 31, 1998, to the person in whose name the
Subordinated Debentures are registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
In the event the Subordinated Debentures cease to be in book-entry only form or
are not held by the Property Trustee, the Company has the right to select record
dates, which must be at least one Business Day prior to the Interest Payment
Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Indenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture at any time, and from time to time,
during the term of the Subordinated Debentures to defer payments of interest by
extending the interest payment period on the Subordinated Debentures for a
period not exceeding 20 consecutive quarters and not beyond the Stated Maturity
of the Subordinated Debentures, at the end of which Extension Period, the
Company must pay all interest then accrued and unpaid together with interest
thereon compounded quarterly at the rate specified for the Subordinated
Debentures to the extent permitted by applicable law ("Compound Interest");
provided that, during any such Extension Period, the Company shall not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital stock or (ii)
make any payment of principal of, or interest or premium, if any, on or repay,
repurchase or redeem, or make any sinking fund payment with respect to, any
indebtedness of the Company (including other junior subordinated debt
securities) that ranks PARI PASSU with or junior in right of payment to the
Subordinated Debentures or make any guarantee payments with respect to the
foregoing (other than (a) dividends or distributions in common stock of the
Company, (b) redemptions or purchases of any rights pursuant to the Company's
Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan,
and the declaration of a dividend of such rights or the issuance of preferred
stock under such plans in the future, (c) payments under the Guarantee, (d)
purchases of common stock related to the issuance of common stock under the
Company's Stock Purchase and Dividend Reinvestment Plan and any of the Company's
benefit plans for its directors, officers or employees and (e) purchases of
common stock required to
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prevent the loss or secure the renewal or reinstatement of any government
license or franchise held by the Company or any of its subsidiaries).
Prior to the termination of any such Extension Period, the Company may
further defer payments of interest by extending the interest payment period;
PROVIDED, HOWEVER, that such Extension Period, including all such previous and
further extensions within such Extension Period, may not exceed 20 consecutive
quarters or the Stated Maturity of the Subordinated Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Company may commence a new Extension Period, subject to the terms described in
this section. As a result, there could be multiple Extension Periods of varying
lengths throughout the term of the Subordinated Debentures. No interest during
an Extension Period, except at the end thereof, is due and payable. The Company
has no present intention of exercising its right to defer payments of interest
by extending the interest payment period on the Subordinated Debentures.
Moreover, because of the consequences of exercising such right, including a
prohibition on the payment of dividends with respect to the Company's capital
stock, the Company believes that the likelihood of such exercise is remote.
If the Property Trustee is the sole holder of the Subordinated Debentures,
the Company is required to give the Regular Trustees and the Property Trustee
written notice of its selection of such Extension Period one Business Day prior
to the earlier of (i) the next date distributions on the Preferred Securities
are payable and (ii) the date the Regular Trustees are required to give notice
to the New York Stock Exchange (or other applicable self-regulatory
organization) or to holders of the Preferred Securities of the record date or
the date such distributions are payable, but in any event at least one Business
Day prior to such record date. The Regular Trustees must give notice of the
Company's selection of such Extension Period to the holders of the Preferred
Securities. If the Property Trustee is not the sole holder of the Subordinated
Debentures, the Company must give the holders of the Subordinated Debentures
written notice of its selection of such Extension Period ten Business Days prior
to the earlier of (i) the next Interest Payment Date and (ii) the date on which
the Company is required to give notice to the New York Stock Exchange (or other
applicable self-regulatory organization) or to holders of the Subordinated
Debentures of the record or such Interest Payment Date.
OPTION TO EXTEND MATURITY DATE
The maturity date of the Subordinated Debentures is , 2038 which
date may be extended once to a date not later than , 2047 by the
Company if (i) the Company is not in bankruptcy or otherwise insolvent, (ii) an
Indenture Event of Default has not occurred and is continuing, (iii) the Company
has made timely payments on the Subordinated Debentures for the immediately
preceding 18 months without deferrals of interest, (iv) the Trust is not in
arrears on payments of distributions on the Preferred Securities, (v) the
Subordinated Debentures are rated not less than BBB- by Standard & Poor's
Ratings Services or Fitch IBCA, Inc. or the equivalent by any other nationally
recognized statistical rating organization, and (vi) the final maturity of the
Subordinated Debentures is not later than the 49th anniversary of the issuance
of the Preferred Securities. Pursuant to the Declaration, the Regular Trustees
are required to give notice of the Company's election to extend the maturity
date to the holders of the Preferred Securities.
OPTIONAL REDEMPTION
The Company shall have the right to redeem the Subordinated Debentures, in
whole or in part, from time to time, on or after , 2003, or at any time
in whole upon the occurrence of a Special Event as described under "Description
of the Preferred Securities--Redemptions--Special Event Redemption of the
Subordinated Debentures," upon not less than 30 nor more than 60 days' notice,
at the Debenture Redemption Price. The proceeds of any such redemption will be
used by the Trust to redeem the Preferred Securities in accordance with their
terms.
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DISTRIBUTION OF THE SUBORDINATED DEBENTURES
The Company will have the right at any time to dissolve the Trust and, in
such event, cause the Subordinated Debentures to be distributed to the holders
of the Preferred Securities in liquidation of the Trust after satisfaction of
liabilities to creditors of the Trust, if any, as provided by applicable law. If
the Subordinated Debentures are distributed to the holders of the Preferred
Securities in liquidation of the Trust, the Company will use its best efforts to
cause the Subordinated Debentures to be listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities are then listed.
After the date for any distribution of Subordinated Debentures upon a
Liquidation, (i) the Preferred Securities will no longer be deemed to be
outstanding, (ii) the Depositary or its nominee, as the record holder of the
Preferred Securities, will receive a Global Certificate representing the
Subordinated Debentures to be delivered upon such distribution and (iii) any
certificates representing Preferred Securities not held by the Depositary or its
nominee will be deemed to represent Subordinated Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of such
Preferred Securities until such certificates are presented to the Company or its
agent for transfer or reissuance. See "--Book-Entry and Settlement."
The Company cannot predict the market prices for the Subordinated Debentures
that may be distributed in exchange for the Preferred Securities if a
Liquidation were to occur. The Preferred Securities that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary market,
or the Subordinated Debentures that an investor may receive if a Liquidation
were to occur, may trade at a discount to the price that the investor paid to
purchase the Preferred Securities offered hereby.
Under current United States federal income tax law, a distribution of
Subordinated Debentures upon a Liquidation would not be a taxable event to
holders of the Preferred Securities. If, however, a Liquidation occurred and it
was determined that the Trust was subject to United States federal income tax
with respect to amounts received or accrued on the Subordinated Debentures at
the time of such Liquidation, then the distribution of the Subordinated
Debentures would be a taxable event to holders of Preferred Securities. Under
current United States federal income tax law, the redemption of the Subordinated
Debentures upon the occurrence of a Special Event or a Liquidation in which
holders of the Preferred Securities receive cash would be a taxable event to
such holders. See "Certain Federal Income Tax Consequences--Distribution of
Subordinated Debentures or Cash On Liquidation of the Trust."
RANKING
The obligations of the Company under the Subordinated Debentures are
subordinate and junior in right of payment to all present and future Senior
Indebtedness and rank PARI PASSU with (i) all notes, debentures and other
evidences of indebtedness of the Company that shall contain or have applicable
thereto subordination provisions substantially identical in effect to the
subordination provisions set forth in the Indenture applicable to the
Subordinated Debentures providing for such indebtedness being junior and
subordinate in right of payment to all Senior Indebtedness and (ii) obligations
to, or rights of, the Company's other general unsecured creditors. As of June
30, 1998, the Company had approximately $1,023 million aggregate principal
amount of Senior Indebtedness outstanding (including approximately $427 million
aggregate principal amount of secured indebtedness outstanding under the
Mortgage Indenture) and approximately $613 million of obligations that rank PARI
PASSU with the Subordinated Debentures (including approximately $119 million
aggregate principal amount of junior subordinated debt securities, accounts
payable, accrued liabilities, including taxes, interest and deposits, and
deferred credits and other liabilities, all arising in the ordinary course of
business, and excluding commitments or contingencies in respect of existing or
future obligations for, among other things, construction expenditures, fuel and
purchased power obligations and operating lease obligations).
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SUBORDINATION
The Indenture provides that the Subordinated Debentures are subordinated and
junior in right of payment to all present and future Senior Indebtedness of the
Company. No payment of principal (including redemption payments) or interest on
the Subordinated Debentures may be made (i) if any Senior Indebtedness of the
Company is not paid when due, and such default has not been cured or waived or
ceased to exist, or (ii) if the maturity of any Senior Indebtedness of the
Company has been accelerated because of a default. Upon any distribution of
assets of the Company to creditors upon any dissolution, winding-up, liquidation
or reorganization, whether voluntary or involuntary, or in bankruptcy,
insolvency, receivership or other proceedings, all principal, premium, if any,
and interest due or to become due on all Senior Indebtedness of the Company must
be paid in full before the holders of Subordinated Debentures are entitled to
receive or retain any payment. Upon satisfaction of all claims of all Senior
Indebtedness then outstanding, the rights of the holders of the Subordinated
Debentures will be subrogated to the rights of the holders of Senior
Indebtedness of the Company to receive payments or distributions applicable to
Senior Indebtedness until all amounts owing on the Subordinated Debentures are
paid in full.
The term "Senior Indebtedness" means, with respect to the Company, principal
of and premium and interest, if any, on Debt of the Company, except for (i) any
Debt that is by its terms subordinated to or PARI PASSU with the Subordinated
Debentures, (ii) any Debt (including all other debt securities and guarantees in
respect of those debt securities) initially issued to any trust, or a trustee of
such trust, partnership, or other entity affiliated with the Company that is,
directly or indirectly, a financing vehicle of the Company in connection with
the issuance by such entity of preferred securities or other similar securities
that contain or have applicable thereto subordination provisions substantially
identical in effect to the subordination provisions set forth in the Indenture
applicable to the Subordinated Debentures providing for such indebtedness being
junior and subordinate in right of payment to all Senior Indebtedness, (iii) any
Debt of the Company which when incurred and without respect to any election
under Section 1111(b) of the United States Bankruptcy Code, was without recourse
to the Company, (iv) any Debt of the Company to any of its subsidiaries, (v)
Debt to any employee of the Company, (vi) any liability for taxes and (vii) Debt
or monetary obligations to trade creditors created or assumed by the Company or
any of its subsidiaries in the ordinary course of business in connection with
the obtaining of goods, materials or services. "Debt" means with respect to the
Company whether recourse is to all or a portion of the assets of the Company and
whether or not contingent, (i) every obligation of the Company for money
borrowed, (ii) every obligation of the Company evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of the Company with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of the
Company, (iv) every obligation of the Company issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business) (v) every
capital lease obligation of the Company and (vi) every obligation of the type
referred to in clauses (i) through (v) of another person and all dividends of
another person the payment of which, in either case, the Company has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by the Company. As of June 30, 1998, Senior Indebtedness of
the Company aggregated approximately $1,023 million (including approximately
$427 million aggregate principal amount of indebtedness outstanding under the
Company's Indenture of Mortgage and Deed of Trust dated October 1, 1953 entered
into with Bankers Trust Company, as amended and supplemented from time to time
(the "Mortgage Indenture")). The Subordinated Debentures also will be
effectively subordinated to all obligations of any subsidiaries of the Company.
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CERTAIN COVENANTS
If (i) there has occurred any event that would constitute an Indenture Event
of Default or (ii) the Company is in default with respect to its payment of any
obligations under the Guarantee or the Preferred Securities, then the Company
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or (ii) make any payment of principal of, or interest or premium,
if any, on or repay, repurchase or redeem, or make any sinking fund payment with
respect to, any indebtedness of the Company (including other junior subordinated
debt securities) that ranks PARI PASSU with or junior in right of payment to the
Subordinated Debentures or make any guarantee payments with respect to the
foregoing (other than (a) dividends or distributions in common stock of the
Company, (b) redemptions or purchases of any rights pursuant to the Company's
Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan,
and the declaration of a dividend of such rights or the issuance of preferred
stock under such plans in the future, (c) payments under the Guarantee, (d)
purchases of common stock related to the issuance of common stock under the
Company's Stock Purchase and Dividend Reinvestment Plan and any of the Company's
benefit plans for its directors, officers or employees and (e) purchases of
common stock required to prevent the loss or secure the renewal or reinstatement
of any government license or franchise held by the Company or any of its
subsidiaries).
For so long as the Trust Securities remain outstanding, the Company will
covenant (i) to maintain 100% record or beneficial ownership of the Common
Securities; PROVIDED, HOWEVER, that any permitted successor of the Company under
the Indenture may succeed to the Company's ownership of such Common Securities,
(ii) to not cause, as Sponsor, or permit, as holder of the Common Securities,
the dissolution or winding-up of the Trust, except in connection with a
distribution of the Subordinated Debentures held by the Trust as provided in the
Declaration and (iii) to use its reasonable efforts to cause the Trust (a) to
remain a statutory business trust, except in connection with the distribution of
Subordinated Debentures to the holders of Trust Securities in liquidation of the
Trust, the redemption of all the Trust Securities, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (b)
to otherwise continue to be classified as a grantor trust for United States
federal income tax purposes.
If at any time the Trust is required to pay any taxes, duties, assessments
or governmental charges of whatever nature (other than withholding taxes)
imposed by the United States or any other taxing authority, then, in such case,
the Company will pay as additional interest on the Subordinated Debentures
("Additional Interest") such additional amounts as shall be required so that the
net amounts received and retained by the Trust after paying such taxes, duties,
assessments or other governmental charges will be not less than the amounts the
Trust would have received had no such taxes, duties, assessments or other
governmental charges been imposed.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any holders of the Subordinated
Debentures, may consolidate with or merge into, or transfer or lease its assets
substantially as an entirety to, any person, and any other person may
consolidate with or merge into, or transfer or lease its assets substantially as
an entirety to, the Company, provided (i) that the person (if other than the
Company) formed by such consolidation or into which the Company is merged or
which acquires or leases the properties and assets of the Company substantially
as an entirety is a person organized and existing under the laws of any United
States jurisdiction and assumes the Company's obligations on the Subordinated
Debentures and under the Indenture, (ii) that after giving effect to such
transaction no Indenture Event of Default, and no event which, after notice or
lapse of time or both, would become an Indenture Event of Default, shall have
happened and be continuing, and (iii) that certain other conditions are met.
There are no provisions in the Subordinated Debentures or the Indenture that
limit or restrict the Company's business or operations, the pledging of the
Company's assets or the incurrence of indebtedness
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by the Company or that may afford holders protection in the event of a highly
leveraged transaction or leveraged buyout involving the Company.
INDENTURE EVENTS OF DEFAULT
The following are Indenture Events of Default: (i) failure to pay principal
of the Subordinated Debentures when due and payable; PROVIDED, HOWEVER, that a
valid extension of the maturity of the Subordinated Debentures shall not
constitute a default in the payment of principal for this purpose; (ii) failure
to pay any interest on any Subordinated Debenture when due and payable,
continued for 10 days; PROVIDED, HOWEVER, that a valid extension of the interest
payment period by the Company for the Subordinated Debentures shall not
constitute a default in the payment of interest for this purpose; (iii) failure
to perform any other covenant of the Company in the Indenture, continued for 60
days after written notice by the Indenture Trustee or holders of at least 25% in
aggregate principal amount of the Subordinated Debentures as provided in the
Indenture; (iv) certain events of bankruptcy, insolvency or reorganization of
the Company; or (v) a Liquidation, except in connection with the distribution of
Subordinated Debentures to the holders of Trust Securities in liquidation of the
Trust, the redemption of all of the Trust Securities, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration.
If an Indenture Event of Default with respect to the Subordinated Debentures
shall occur and be continuing, either the Indenture Trustee or the holders of at
least 25% in aggregate principal amount of the Subordinated Debentures by notice
as provided in the Indenture may declare the principal amount of the
Subordinated Debentures to be due and payable immediately. At any time after a
declaration of acceleration with respect to the Subordinated Debentures has been
made, however, but before a judgment or decree based on such acceleration has
been obtained, the holders of a majority in aggregate principal amount of the
Subordinated Debentures may, under certain circumstances, rescind and annul such
acceleration. For information as to waiver of defaults, see "--Modification and
Waiver."
The Indenture provides that, subject to the duty of the Indenture Trustee
during an Indenture Event of Default to act with the required standard of care,
the Indenture Trustee will be under no obligation to exercise any of its rights
or powers under the Indenture at the request or direction of any of the holders,
unless such holders shall have offered to the Indenture Trustee reasonable
security or indemnity. Subject to certain provisions in the Indenture, the
holders of a majority in aggregate principal amount of the Subordinated
Debentures will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred on the Indenture Trustee, with respect
to the Subordinated Debentures. No such limitations shall apply, however, to a
suit instituted by a holder of a Subordinated Debenture for the enforcement of
the payment of the principal of and interest on such Subordinated Debenture on
or after the applicable due dates specified in such Subordinated Debenture.
The Company will be required to furnish to the Indenture Trustee annually a
statement as to the performance by the Company of its obligations under the
Indenture and as to any default in such performance.
An Indenture Event of Default also constitutes a Declaration Event of
Default. If any Indenture Event of Default occurs and is continuing, the
Property Trustee, as the holder of the Subordinated Debentures, will have the
right to declare the principal of and the interest on the Subordinated
Debentures and any other amounts payable under the Indenture to be forthwith due
and payable and to enforce its other rights as a creditor with respect to the
Subordinated Debentures. The holders of Preferred Securities in certain
circumstances have the right to direct the Property Trustee to exercise its
rights as the holder of the Subordinated Debentures. The Company has
acknowledged in the Indenture that if the Property Trustee fails to enforce its
rights under the Subordinated Debentures, a holder of Preferred Securities may
institute a legal proceeding directly against the Company to enforce the
Property Trustee's rights under the
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Subordinated Debentures without first instituting any legal proceeding against
the Property Trustee or any other person or entity, and that notwithstanding the
foregoing, if an Indenture Event of Default has occurred and is continuing and
is attributable to the failure of the Company to pay interest on or principal of
the Subordinated Debentures on the date such interest or principal is otherwise
payable, a holder of Preferred Securities may then institute a Direct Action for
payment on or after the respective due dates specified in the Subordinated
Debentures. See "Description of the Preferred Securities--Declaration Events of
Default" and "--Voting Rights."
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Indenture Trustee with the consent of the holders of a majority in aggregate
principal amount of the Subordinated Debentures, PROVIDED, HOWEVER, that no such
modification or amendment may, without the consent of the holder of each
Subordinated Debenture (i) change the Stated Maturity of the Subordinated
Debentures; (ii) reduce the principal amount of or the rate of interest on the
Subordinated Debentures; (iii) impair the right to institute suit for the
enforcement of any payment on or with respect to the Subordinated Debentures on
or after the Stated Maturity or redemption date thereof; or (iv) reduce the
percentage in principal amount of outstanding Subordinated Debentures, the
consent of the holders of which is required for modification or amendment of the
Indenture, for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults. In addition, the Company and the Trustee may
execute, without the consent of the holders of the Subordinated Debentures, one
or more supplemental indentures in order to (i) evidence the succession of
another company or person to the obligations of the Company under the Indenture
and the assumption by any such successor of the covenants of the Company
contained in the Indenture, (ii) add to the covenants of the Company or
surrender any right or power conferred upon the Company in the Indenture, (iii)
add any additional Indenture Events of Default, (iv) provide for the appointment
of a successor trustee and add to or change any of the provisions of the
Indenture to provide for or facilitate the administration of the trusts of the
Indenture by the Indenture Trustee, or (v) cure any ambiguity in or correct or
supplement any provision of the Indenture which may be inconsistent with any
other provision therein, or make any other provisions with respect to matters or
questions arising under this Indenture, provided that the actions described in
this clause (v) shall not adversely affect the interests of holders of the
Subordinated Debentures (except for holders consenting to such changes).
The holders of a majority in aggregate principal amount of the outstanding
Subordinated Debentures may, on behalf of the holders of the Subordinated
Debentures, waive compliance by the Company with certain covenants of the
Indenture. The holders of a majority in aggregate principal amount of the
outstanding Subordinated Debentures may, on behalf of the holders of all
Subordinated Debentures, waive any past default under the Indenture, except a
default in the payment of the principal of or interest on the Subordinated
Debentures or in respect of a covenant or provision which under the Indenture
cannot be modified or amended without the consent of the holders of the
outstanding Subordinated Debentures affected.
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, the Company will be deemed to be
discharged from its obligations with respect to the Subordinated Debentures
(except in each case for certain obligations with respect to provisions for
payment of the Subordinated Debentures and obligations to register the transfer
or exchange of the Subordinated Debentures, replace stolen, lost or mutilated
Subordinated Debentures, maintain certain agencies and hold moneys for payments
in trust) if, among other conditions, the Company (i) deposits with the
Indenture Trustee, in trust, moneys or Governmental Obligations, in an amount
sufficient to pay all the principal of and interest on the Subordinated
Debentures on the dates such payment are due in accordance with the terms of the
Subordinated Debentures and (ii) delivers to the Indenture Trustee an opinion of
counsel to the effect that, based upon the Company's receipt from, or the
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publication by, the Internal Revenue Service of a ruling, or based upon a change
in law, the holders of the Subordinated Debentures will not recognize income,
gain or loss for United States federal income tax purposes as a result of the
deposit, defeasance and discharge and will be subject to United States federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance or discharge had not
occurred.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with a
Liquidation, the Subordinated Debentures will be issued in the form of one
global security registered in the name of the Depositary or its nominee (each, a
"Global Security"). Except under the limited circumstances described below,
Subordinated Debentures represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Subordinated Debentures
in definitive form. See "--Discontinuance of the Depositary's Services." The
Global Securities described above may not be transferred except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or to a successor depository
or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated
Debentures in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the Indenture, and no Global
Security representing Subordinated Debentures is exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. Accordingly, each Beneficial Owner must rely on the procedures of the
Depositary, or, if such person is not a Participant, on the procedures of the
Participant through which such person owns its interest, to exercise any rights
of a holder under the Indenture.
THE DEPOSITARY
If Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, the
Depositary will act as securities depositary for the Subordinated Debentures.
For a description of the Depositary and the specific terms of the depositary
arrangements, see "Description of the Preferred Securities--Book-Entry Only
Issuance--The Depository Trust Company." As of the date of this Prospectus, the
description of the Depositary's book-entry system and the Depositary's practices
as they relate to purchases, transfers, notices and payments with respect to the
Preferred Securities apply in all material respects to any debt obligations
represented by one or more global securities held by the Depositary. The Company
may appoint a successor to the Depositary or any successor depository in the
event the Depositary or such successor depository is unable or unwilling to
continue as a depository for the Global Security.
None of the Company, the Trust, the Indenture Trustee, any paying agent and
any other agent of the Company or the Indenture Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
for such Subordinated Debentures or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security is exchangeable for Subordinated Debentures registered in
the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
depository for such Global Security and no successor depository shall have been
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appointed, (ii) the Depositary at any time ceases to be a clearing agency
registered under the Exchange Act, at which time the Depositary is required to
be so registered to act as such depository and no successor depository shall
have been appointed, (iii) the Company, in its sole discretion, determines that
such Global Security is so exchangeable or (iv) there shall have occurred an
Indenture Event of Default with respect to such Subordinated Debentures. Any
Global Security that is exchangeable pursuant to the preceding sentence is
exchangeable for Subordinated Debentures registered in such names as the
Depositary shall direct. It is expected that such instructions will be based
upon directions received by the Depositary from its Participants with respect to
ownership of beneficial interests in such Global Security.
MISCELLANEOUS
The Indenture provides that the Company will pay all debts and obligations
of the Trust (other than with respect to the Trust Securities), including all
fees and expenses related to (i) the offering of the Trust Securities and the
Subordinated Debentures, (ii) the organization, maintenance and dissolution of
the Trust, (iii) the retention of the Regular Trustees and (iv) the enforcement
by the Property Trustee of the rights of the holders of the Preferred
Securities. The payment of such fees and expenses will be fully and
unconditionally guaranteed by the Company.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by, and
construed in accordance with, the laws of the State of New York.
REGARDING THE INDENTURE TRUSTEE
The Indenture contains certain limitations on the right of the Indenture
Trustee, should it become a creditor of the Company, to obtain payment of claims
in certain cases, or to realize for its own account on certain property received
in respect of any such claim as security or otherwise. The Indenture Trustee
will be permitted to engage in certain other transactions; however, if it
acquires any conflicting interest and there is a default under the Subordinated
Debentures, it must eliminate such conflict or resign.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by the Company for the benefit of the holders of
the Preferred Securities. The Guarantee will be qualified as an indenture under
the Trust Indenture Act. IBJ Schroder will act as Guarantee Trustee. The terms
of the Guarantee will be those set forth in the Guarantee and those made part of
the Guarantee by the Trust Indenture Act. This summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the form of Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part and
the Trust Indenture Act. The Guarantee will be held by the Guarantee Trustee for
the benefit of the holders of the Preferred Securities.
GENERAL
Pursuant to the Guarantee, the Company will irrevocably and unconditionally
agree, to the extent set forth herein, to pay in full to the holders of the
Preferred Securities, the Guarantee Payments (as defined herein) (except to the
extent paid by the Trust), as and when due, regardless of any defense, right of
set-off or counterclaim that the Trust may have or assert. The following
payments with respect to the Preferred Securities (the "Guarantee Payments"), to
the extent not paid or made by the Trust, will be subject to the Guarantee
(without duplication): (i) any accrued and unpaid distributions that are
required to be paid on the Preferred Securities to the extent the Trust shall
have funds available therefor, (ii) the Redemption Price to the extent the Trust
shall have funds available therefor with respect to any Preferred Securities
42
<PAGE>
called for redemption by the Trust and (iii) upon a Liquidation (other than in
connection with the distribution of the Subordinated Debentures to the holders
of the Preferred Securities or the redemption of all the Preferred Securities
upon the redemption or Stated Maturity of the Subordinated Debentures) the
lesser of (a) the Liquidation Distribution to the extent the Trust shall have
funds available therefor and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Preferred Securities in liquidation
of the Trust. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of Preferred Securities or by causing the Trust to pay such amounts to
such holders.
The Guarantee will be a full and unconditional guarantee on a subordinated
basis with respect to the Preferred Securities from the time of issuance, but
will not apply to any payment of distributions, except to the extent the Trust
shall have funds available therefor as a result of payments of interest or
principal on the Subordinated Debentures by the Company. If the Company does not
make interest payments on the Subordinated Debentures purchased by the Trust,
the Trust will not pay distributions on the Preferred Securities and will not
have funds available therefor.
The Company has also agreed to irrevocably and unconditionally guarantee the
obligations of the Trust with respect to the Common Securities (the "Common
Securities Guarantee") to the same extent as the Guarantee, except that, upon an
Indenture Event of Default, holders of Preferred Securities under the Guarantee
will have priority over holders of Common Securities under the Common Securities
Guarantee to receive Guarantee Payments.
STATUS OF THE GUARANTEE
The Company's obligations under the Guarantee are subordinate and junior in
right of payment to all liabilities of the Company and rank PARI PASSU with the
most senior preferred stock issued, from time to time, if any, by the Company.
The Guarantee will constitute a guarantee of payment and not of collection (i.e.
the guaranteed party may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee without first instituting a
legal proceeding against any other person or entity). There are no terms in the
Guarantee that limit the Company's ability to incur additional indebtedness,
including indebtedness that ranks senior to the Guarantee.
CERTAIN COVENANTS OF THE COMPANY
In the Guarantee, the Company will covenant that, so long as any Preferred
Securities issued by the Trust remain outstanding, if there shall have occurred
any event that would constitute an event of default under the Guarantee or a
Declaration Event of Default, then the Company shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or (ii) make any
payment of principal of, or interest or premium, if any, on or repay, repurchase
or redeem, or make any sinking fund payment with respect to, any indebtedness of
the Company (including other junior subordinated debt securities) that ranks
PARI PASSU with or junior in right of payment to the Subordinated Debentures or
make any guarantee payments with respect to the foregoing (other than (a)
dividends or distributions in common stock of the Company, (b) redemptions or
purchases of any rights pursuant to the Company's Stock Purchase Rights Plan, or
any successor to such Stock Purchase Rights Plan, and the declaration of a
dividend of such rights or the issuance of preferred stock under such plans in
the future, (c) payments under the Guarantee, (d) purchases of common stock
related to the issuance of common stock under the Company's Stock Purchase and
Dividend Reinvestment Plan and any of the Company's benefit plans for its
directors, officers or employees and (e) purchases of common stock required to
prevent the loss or secure the renewal or reinstatement of any government
license or franchise held by the Company or any of its subsidiaries).
43
<PAGE>
MODIFICATIONS OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required), the
Guarantee may be amended only with the prior approval of the holders of not less
than 66 2/3 in aggregate liquidation amount of the Preferred Securities then
outstanding. See "Description of the Preferred Securities--Voting Rights." All
guarantees and agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall inure
to the benefit of the holders of the Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to make any of the payments required by the Guarantee or to perform its
other obligations thereunder. The holders of a majority in aggregate liquidation
amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under the Guarantee.
Any holder of Preferred Securities may institute a legal proceeding directly
against the Company to enforce the Guarantee Trustee's rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under the Guarantee and as to any default in such performance. The Company is
also required to file annually with the Guarantee Trustee an officer's
certificate as to the Company's compliance with all conditions under the
Guarantee.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price of all Preferred Securities, upon full payment
of the amounts payable upon liquidation of the Trust or upon distribution of the
Subordinated Debentures to the holders of the Preferred Securities. The
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Preferred Securities must restore payment of
any sums paid under such Preferred Securities or the Guarantee.
GOVERNING LAW
The Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
44
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EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
the Trust and to invest the proceeds from such issuance and sale in the
Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover distributions
and payments due on the Trust Securities because of the following factors: (i)
the aggregate principal amount of Subordinated Debentures will be equal to the
sum of the aggregate stated liquidation amount of the Trust Securities, (ii) the
interest rate and the interest and other payment dates on the Subordinated
Debentures will match the distribution rate and the distribution and other
payment dates for the Preferred Securities, (iii) the Company is required to pay
all, and the Trust is not obligated to pay, directly or indirectly, any, costs
and expenses of the Trust, and (iv) the Declaration provides that the Regular
Trustees will not cause or permit the Trust to, among other things, engage in
any activity that is not inconsistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by the Company as and to the extent set forth under
"Description of the Guarantee." If the Company does not make interest payments
on the Subordinated Debentures purchased by the Trust, it is expected that the
Trust will not have sufficient funds to pay distributions on the Preferred
Securities. The Guarantee is a full and unconditional guarantee on a
subordinated basis from the time of its issuance but does not apply to any
payment of distributions unless and until the Trust has sufficient funds for the
payment of such distributions.
If the Company fails to make interest or other payments on the Subordinated
Debentures when due (taking account of any Extension Period), the Declaration
provides a mechanism whereby the holders of the Preferred Securities, using the
procedures described in "Description of the Preferred Securities-- Book-Entry
Only Issuance--The Depository Trust Company" and "--Voting Rights," may direct
the Property Trustee to enforce its rights under the Subordinated Debentures. If
the Property Trustee fails to enforce its rights under the Declaration or the
Subordinated Debentures, a holder of Preferred Securities may institute a legal
proceeding against the Company to enforce the Property Trustee's rights under
the Declaration or the Subordinated Debentures without first instituting any
legal proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal on the Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, the
redemption date), then a holder of Preferred Securities may institute a Direct
Action for enforcement of payment to such holder of the principal of or interest
on the Subordinated Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder on or
after the respective due dates specified in the Subordinated Debentures.
The Company, under the Guarantee, acknowledges that the Guarantee Trustee
will enforce the Guarantee on behalf of the holders of the Preferred Securities.
If the Company fails to make payments under the Guarantee, the Guarantee
provides a mechanism whereby the holders of the Preferred Securities may direct
the Guarantee Trustee to enforce its rights thereunder. In any event, any holder
of Preferred Securities may institute a legal proceeding directly against the
Company to enforce the Guarantee Trustee's rights under the Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity.
The Guarantee, when taken together with the Company's obligations under the
Subordinated Debentures, the Indenture and the Declaration, including its
covenant in the Indenture to pay costs,
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<PAGE>
expenses, debts and obligations of the Trust (other than with respect to the
Trust Securities), provide a full and unconditional guarantee of amounts due on
the Preferred Securities.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of Preferred Securities.
Unless otherwise stated, this summary addresses only Preferred Securities held
as capital assets by United States Holders (as defined below) that purchase
Preferred Securities on their original issuance at their original offering
price, and does not address all the tax consequences that may be relevant to
holders subject to special tax treatment, such as banks, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, persons whose "functional
currency" is other than the United States dollar, persons who hold Preferred
Securities as part of a hedging or conversion transaction or a straddle or
persons who "mark to market" their securities.
As used herein, "United States Holder" means a holder that is (i) a citizen
or resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, (iii) an estate the income of which is subject to
United States federal income tax regardless of its source or (iv) a trust the
administration of which is subject to the primary supervision of a United States
court and for which one or more United States persons have the authority to
control all substantial decisions.
The statements of law or legal conclusions set forth in this summary
constitute the opinion of Winthrop, Stimson, Putnam & Roberts, special tax
counsel to the Company and the Trust. This summary is based upon the Internal
Revenue Code of 1986, as amended, and regulations, rulings and judicial
decisions thereunder as of the date hereof, all of which are subject to change,
possibly on a retroactive basis.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS, IN
LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS TO THE UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF PREFERRED
SECURITIES, AS WELL AS THE CONSEQUENCES OF ANY OTHER UNITED STATES FEDERAL,
STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF THE TRUST
Under current law and assuming compliance with the terms of the Declaration
and certain other documents, the Trust will be classified as a grantor trust and
not as an association taxable as a corporation for United States federal income
tax purposes. As a result, each beneficial owner of Preferred Securities will be
treated as owning an undivided beneficial interest in the Subordinated
Debentures. Accordingly, each United States Holder will be required to include
in gross income its PRO RATA portion of interest or OID, if any, accrued with
respect to the Subordinated Debentures whether or not the cash is actually
distributed to the holders. See "--Payments of Interest" and "--Original Issue
Discount." No amount included in income with respect to the Preferred Securities
will be eligible for the dividends received deduction for domestic corporate
holders.
PAYMENTS OF INTEREST
Except as set forth below, stated interest on the Subordinated Debentures
will generally be taxable to a United States Holder as ordinary income at the
time it is paid or accrued, in accordance with such United States Holder's
method of accounting for United States federal income tax purposes.
46
<PAGE>
ORIGINAL ISSUE DISCOUNT
Under the Indenture, the Company has the right to defer payments of interest
on the Subordinated Debentures by extending the interest payment period on the
Subordinated Debentures at any time for up to 20 consecutive quarters with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Subordinated Debentures. The Company has no
present intention of exercising such right. Moreover, because of the
consequences of exercising such right, including a prohibition on the payment of
dividends with respect to the Company's capital stock, the Company believes that
the likelihood of such exercise is remote. Consequently, under United States
Treasury regulations that define OID, the Company believes, and intends to take
the position, that the Subordinated Debentures will not be issued with OID. It
should be noted that those regulations have not been addressed in any rulings or
other interpretations by the IRS. Accordingly, no assurances can be given that
the IRS will not take a contrary position or that a court will not sustain that
position.
Should the Company exercise its right to defer payments of interest, as
described above, the Subordinated Debentures would at that time be treated as
reissued with OID. As a result, a United States Holder would, in effect, be
required to accrue interest income even if such United States Holder used the
cash method of accounting for United States federal income tax purposes.
Consequently, in the event that the payment of interest were deferred, a United
States Holder would be required to include OID in income on an economic accrual
basis notwithstanding that the Company would not make interest payments on the
Subordinated Debentures, and the Trust would not make distributions on the
Preferred Securities, during such period.
DISTRIBUTION OF SUBORDINATED DEBENTURES OR CASH ON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under "Description of the
Preferred Securities--Liquidation Distribution Upon Dissolution" and
"Description of the Subordinated Debentures--Distribution of the Subordinated
Debentures," Subordinated Debentures may be distributed to holders in exchange
for Preferred Securities upon a Liquidation. Under current United States federal
income tax law, a distribution of Subordinated Debentures upon a Liquidation
would not be a taxable event to the holders, and each holder would have an
aggregate tax basis in the Subordinated Debentures equal to such holder's
aggregate tax basis in its Preferred Securities. A holder's holding period in
the Subordinated Debentures received in the Liquidation would include the period
during which the Preferred Securities were held by such holder. If, however, a
Liquidation occurred and it was determined that the Trust was subject to United
States federal income tax with respect to amounts received or accrued on the
Subordinated Debentures at the time of such Liquidation, then the distribution
of the Subordinated Debentures would be a taxable event to United States
Holders. In that event, gain or loss would be recognized in an amount equal to
the difference between the fair market value of the Subordinated Debentures
received in the Liquidation and the United States Holder's aggregate tax basis
in its Preferred Securities. In such a case, the holding period of the
Subordinated Debentures received in the Liquidation would not include the period
during which the Preferred Securities were held.
Under certain circumstances, as described under "Description of the
Preferred Securities--Redemptions" and "Description of the Subordinated
Debentures--Optional Redemption," the Subordinated Debentures may be redeemed
for cash and the proceeds of such redemption distributed to holders in
redemption of their Preferred Securities. Under current United States federal
income tax law, such a redemption would be a taxable event and a United States
Holder would recognize gain or loss as if it had sold such redeemed Preferred
Securities for cash. See "--Sales of Preferred Securities."
SALES OF PREFERRED SECURITIES
Gain or loss will be recognized by a United States Holder on a sale or other
disposition (including a redemption for cash) of Preferred Securities in an
amount equal to the difference between the amount
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realized (which, for this purpose, will exclude amounts attributable to accrued
and unpaid interest not previously included in income as interest or OID, which
will be taxable as ordinary income) and the United States Holder's adjusted tax
basis in the Preferred Securities sold or redeemed. A holder's adjusted tax
basis in its Preferred Securities will generally be the initial purchase price,
increased by any OID included in income and decreased by subsequent payments
received on the Preferred Securities. Such gain or loss will generally be
long-term capital gain or loss if the Preferred Securities sold or redeemed have
been held for more than one year. Long-term capital gains of individuals are
eligible for reduced rates of United States federal income taxation.
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder who disposes of Preferred Securities between
record dates for payments of distributions thereon (and consequently does not
receive a distribution from the Trust for the period prior to such distribution)
will nevertheless be required to include in gross income for United States
federal income tax purposes such holder's ratable share of accrued but unpaid
interest (or OID) on the Subordinated Debentures through the date of disposition
as ordinary income. To the extent the selling price (which may not fully reflect
the value of accrued but unpaid interest (or OID)) is less than the holder's
adjusted tax basis, a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Interest and OID, if any, paid or accrued on the Preferred Securities held
of record by United States Holders (other than corporations and other exempt
holders) will be reported annually to the IRS. It is anticipated that such
interest or OID will be reported to holders on Form 1099 and delivered by
January 31 following each calendar year. "Backup" withholding at a rate of 31%
will apply to payments made on, and proceeds from the sale of, Preferred
Securities unless the United States Holder furnishes its taxpayer identification
number in the manner prescribed in applicable Treasury regulations, certifies
that such number is correct, certifies as to no loss of exemption from backup
withholding and meets certain other conditions. Any withheld amount generally
will be allowed as a credit against the United States Holder's United States
federal income tax liability, provided the required information is timely filed
with the IRS.
On October 16, 1997, the United States Treasury Department issued
regulations concerning the information reporting and backup withholding rules.
These regulations are generally effective for payments made after December 31,
1999. In general, they do not alter significantly the substantive requirements
of the rules pertaining to backup withholding and information reporting, but,
rather, modify certification procedures and forms and clarify reliance
standards. Prospective investors should consult their own tax advisors regarding
these regulations.
48
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UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
relating to the Preferred Securities dated the date hereof (the "Underwriting
Agreement"), the Company and the Trust have agreed to sell to each of the
Underwriters named below, and each of such Underwriters, for whom Bear, Stearns
& Co. Inc., PaineWebber Incorporated, Prudential Securities Incorporated, EVEREN
Securities, Inc. and Credit Suisse First Boston Corporation, and are acting as
representatives (the "Representatives"), has severally agreed to purchase the
respective number of Preferred Securities set forth opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS PREFERRED SECURITIES
- -------------------------------------------------- ----------------------
<S> <C>
Bear, Stearns & Co. Inc...........................
PaineWebber Incorporated..........................
Prudential Securities Incorporated................
EVEREN Securities, Inc............................
Credit Suisse First Boston Corporation............
----------
Total.....................................
2,800,000
----------
----------
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all the Preferred
Securities offered hereby if any of the Preferred Securities are purchased.
The Company and the Trust have been advised by the Representatives that the
Underwriters propose to offer the Preferred Securities to the public at the
initial public offering price set forth on the cover page of this Prospectus,
and to certain dealers at such price less a concession not in excess of
$. per Preferred Security. The Underwriters may allow, and such dealers may
reallow, a discount not in excess of $. per Preferred Security to certain
other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
Because the proceeds of the sale of the Preferred Securities will be
invested in the Subordinated Debentures, the Underwriting Agreement provides
that the Company will pay as Underwriters' Compensation to the Underwriters for
their arranging the investment therein of such proceeds, $. per Preferred
Security (or $ in the aggregate) for the accounts of the several
Underwriters, provided that, such compensation for sales of 100,000 or more
Preferred Securities to a single purchaser will be $.
per Preferred Security. Therefore, to the extent of such sales, the actual
amount of such compensation will be less than the aggregate amount specified in
the preceding sentence.
During the period of 30 days from the date of this Prospectus, neither the
Trust nor the Company will, without the prior written consent of the
Representatives, directly or indirectly, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, any beneficial interests in the assets
of the Trust, or any preferred securities or any other securities of the Trust
or the Company that are substantially similar to the Preferred Securities,
including any guarantee of such securities, or any securities convertible into
or exchangeable for or that represent the right to receive beneficial interests
in the assets of the Trust, preferred securities or any such substantially
similar securities of either the Trust or the Company (except for the
Subordinated Debentures and the Preferred Securities offered hereby).
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<PAGE>
Prior to this offering there has been no public market for the Preferred
Securities. Application has been made to list the Preferred Securities on the
New York Stock Exchange. If so approved, trading of the Preferred Securities on
the New York Stock Exchange is expected to commence within the 30-day period
after the initial delivery of the Preferred Securities. In order to meet one of
the requirements for listing the Preferred Securities on the New York Stock
Exchange, the Underwriters will undertake to sell lots to a minimum of 400
beneficial holders. The Representatives have advised the Trust that they intend
to make a market in the Preferred Securities prior to the commencement of
trading on the New York Stock Exchange. The Representatives will have no
obligation to make a market in the Preferred Securities, however, and may cease
market-making activities, if commenced, at any time.
During and after the offering, the Underwriters may purchase and sell the
Preferred Securities in the open market. These transactions may include
overallotment and stabilizing transactions and purchases to cover syndicate
short positions created in connection with the offering. The Underwriters also
may impose a penalty bid, whereby selling concessions allowed to syndicate
members or other broker-dealers in respect of the Preferred Securities sold in
the offering for their account may be reclaimed by the syndicate if such
Preferred Securities are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Preferred Securities that may be higher than the price that
might otherwise prevail in the open market; and these activities, if commenced,
may be discontinued at any time. These transactions may be effected on the New
York Stock Exchange, in the over-the-counter market or otherwise.
The Company and the Trust have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain matters of Delaware law relating to the legality of the Preferred
Securities, and the formation of the Trust will be passed upon by Richards,
Layton & Finger, P.A., special Delaware counsel to the Company and the Trust.
The legality of the Guarantee and the Subordinated Debentures will be passed
upon for the Company by Best Best & Krieger LLP. The validity of the Preferred
Securities, the Guarantee and the Subordinated Debentures will be passed upon
for the Underwriters by Winthrop, Stimson, Putnam & Roberts. Certain matters
relating to United States federal income tax considerations will be passed upon
for the Company and the Trust by their special tax counsel, Winthrop, Stimson,
Putnam & Roberts.
EXPERTS
The financial statements and financial statement schedule of the Company
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
50
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................................................... 5
Incorporation of Certain Information by Reference....................... 5
Summary................................................................. 7
Risk Factors............................................................ 11
The Mergers............................................................. 15
The Trust............................................................... 18
Selected Financial and Operating Information............................ 19
Capitalization.......................................................... 21
Use of Proceeds......................................................... 22
Accounting Treatment.................................................... 22
Description of the Preferred Securities................................. 22
Description of the Subordinated Debentures.............................. 33
Description of the Guarantee............................................ 42
Effect of Obligations under the Subordinated Debentures and the
Guarantee............................................................. 45
Certain Federal Income Tax Consequences................................. 46
Underwriting............................................................ 49
Legal Matters........................................................... 50
Experts................................................................. 50
</TABLE>
2,800,000 PREFERRED SECURITIES
NVP CAPITAL III
% TRUST ISSUED PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED, AS SET FORTH HEREIN, BY
NEVADA POWER COMPANY
----------------
PROSPECTUS
----------------
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
EVEREN SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON
REPRESENTATIVES OF THE UNDERWRITERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities covered by this Registration Statement, other than Underwriters'
Compensation, are as follows:
<TABLE>
<S> <C> <C>
(a) SEC registration fee (actual).................................. $ 20,650
(b) Printing fees and expenses..................................... $ 100,000
(c) Legal fees and expenses........................................ $ 75,000
(d) Accounting fees and expenses................................... $ 15,000
(e) Blue Sky fees and expenses..................................... $ 7,000
(f) New York Stock Exchange Listing Fee............................ $ 35,500
(g) Rating Agency Fees............................................. $ 4,000
(h) Trustees' Fees................................................. $ 22,000
(i) Other.......................................................... $ 7,000
---------
Total.......................................................... $ 286,150
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 78.037 of the Nevada General Corporation Law, the
Company has included in its Restated Articles of Incorporation a provision which
states that a director or officer of the Company shall not be liable to the
Company or its shareholders for monetary damages for breach of fiduciary duty as
a director or officer, except to the extent such limitation of liability is
prohibited by Nevada General Corporation Law as the same exists or may hereafter
be amended. Section 78.037 currently provides that any such provision may not
eliminate or limit the liability of a director or officer for (a) acts or
omissions which involve intentional misconduct, fraud or a knowing violation of
law; or (b) the payment of dividends in violation of the Nevada General
Corporation Law.
As permitted by Section 78.751 of the Nevada General Corporation Law,
Article VIII of the Company's Bylaws provides for the indemnification by the
Company, including suits brought by or on behalf of the Company, of each
director, officer, employee or agent thereof to the fullest extent permitted by
Nevada law.
As permitted by the Nevada General Corporation Law and Article VIII of the
Company's Bylaws, the Company has entered into indemnity agreements with its
directors and officers that provide for indemnification of such individuals to
the fullest extent permitted by Nevada law, and the Company maintains director's
and officer's liability for its directors and officers against certain
liabilities.
II-1
<PAGE>
ITEM 16. EXHIBITS*
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement for offering of Preferred Securities.
** 2.1 Agreement and Plan of Merger by and among Nevada Power Company, Sierra Pacific
Resources, Desert Merger Sub, Inc. and Lake Merger Sub, Inc. dated as of April
29, 1998 (incorporated by reference from the Company's Current Report on Form 8-K
dated April 29, 1998, File No. 1-4698).
4.1 Form of Indenture between Nevada Power Company and IBJ Schroder Bank & Trust
Company, as Indenture Trustee, to be used in connection with issuance of Junior
Subordinated Deferrable Interest Debentures.
4.2 Certificate of Trust of NVP Capital III.
4.3 Trust Agreement for NVP Capital III.
4.4 Form of Amended and Restated Declaration of Trust to be used in connection with
issuance of Preferred Securities.
4.5 Form of Preferred Security Certificate for NVP Capital III (included in Exhibit
4.4).
4.6 Form of Common Security Certificate for NVP Capital III (included in Exhibit 4.4).
4.7 Form of Preferred Securities Guarantee Agreement (included in Exhibit 4.4).
4.8 Form of Common Securities Guarantee Agreement (included in Exhibit 4.4).
4.9 Form of Junior Subordinated Deferrable Interest Debenture (included in Exhibit
4.1).
5.1 Opinion of Best Best & Krieger LLP, relating to the legality of the Junior
Subordinated Debentures and the Preferred Securities Guarantee.
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the
legality of the Preferred Securities of NVP Capital III.
8.1 Opinion of Winthrop, Stimson, Putnam & Roberts, as to certain United States federal
income tax matters.
12.1 Statement Re: Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Best Best & Krieger LLP (included in Exhibit 5.1).
23.3 Consent of Richards, Layton & Finger, special Delaware counsel (included in Exhibit
5.2).
23.4 Consent of Winthrop, Stimson, Putnam & Roberts (included in Exhibit 8.1).
24.1 Power of Attorney (included on signature page hereto).
25.1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
IBJ Schroder Bank & Trust Company, as Indenture Trustee.
25.2 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
IBJ Schroder Bank & Trust Company, as Property Trustee.
25.3 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
IBJ Schroder Bank & Trust Company, as Preferred Securities Guarantee Trustee.
</TABLE>
- ------------------------
* Reference is made to a duplicate list of exhibits being filed as part of the
Registration Statement, which list, prepared in accordance with Item 102 of
Regulation S-T of the Securities and Exchange Commission, immediately
precedes the exhibits being physically filed with the Registration
Statement.
** Incorporated by reference herein as indicated.
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(1) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)
II-2
<PAGE>
ITEM 17. UNDERTAKINGS (CONTINUED)
that is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(2) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling persons of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(3) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be a part of this registration
statement as of the time it was declared effective.
(4) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas and State of Nevada on the 10th day of
September, 1998.
<TABLE>
<S> <C> <C>
NEVADA POWER COMPANY
By: /s/ CHARLES A. LENZIE
-----------------------------------------
(Charles A. Lenzie,
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER)
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Charles A. Lenzie and Steven W. Rigazio, and each
of them, his true and lawful attorneys in fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys in fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys in fact and agents, or any of them, or their or his
substitutes may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED:
<TABLE>
<S> <C> <C> <C>
(1) PRINCIPAL EXECUTIVE OFFICER
/s/ CHARLES A. LENZIE
------------------------------ Chairman of the Board and September 10, 1998
(Charles A. Lenzie) Chief Executive Officer
PRINCIPAL FINANCIAL AND
PRINCIPAL ACCOUNTING OFFICER
(2)
/s/ STEVEN W. RIGAZIO Vice President and
------------------------------ Treasurer, Chief September 10, 1998
(Steven W. Rigazio) Financial Officer
(3) DIRECTORS
/s/ MARY KAYE CASHMAN
------------------------------ Director September 10, 1998
(Mary Kaye Cashman)
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C> <C>
/s/ MARY LEE COLEMAN
------------------------------ Director September 9, 1998
(Mary Lee Coleman)
/s/ FRED D. GIBSON, JR.
------------------------------ Director September 10, 1998
(Fred D. Gibson, Jr.)
/s/ JOHN L. GOOLSBY
------------------------------ Director September 10, 1998
(John L. Goolsby)
/s/ JERRY E. HERBST
------------------------------ Director September 10, 1998
(Jerry E. Herbst)
/s/ MICHAEL R. NIGGLI
------------------------------ Director September 16, 1998
(Michael R. Niggli)
/s/ JOHN F. O'REILLY
------------------------------ Director September 10, 1998
(John F. O'Reilly)
/s/ FRANK E. SCOTT
------------------------------ Director September 10, 1998
(Frank E. Scott)
/s/ A.M. SMITH
------------------------------ Director September 10, 1998
(A.M. Smith)
/s/ J.A. TIBERTI
------------------------------ Director September 10, 1998
(J.A. Tiberti)
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, NVP Capital III
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada, on the 16th day of
September, 1998.
<TABLE>
<S> <C> <C>
NVP CAPITAL III
(Registrant)
By: NEVADA POWER COMPANY AS SPONSOR
By: /s/ CHARLES A. LENZIE
-----------------------------------------
(Charles A. Lenzie,
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER)
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
- -----------
<C> <S>
1.1 Form of Underwriting Agreement for offering of Preferred Securities.
* 2.1 Agreement and Plan of Merger by and among Nevada Power Company, Sierra Pacific Resources, Desert Merger
Sub, Inc. and Lake Merger Sub, Inc. dated as of April 29, 1998 (incorporated by reference from the
Company's Current Report on Form 8-K dated April 29, 1998, File No. 1-4698).
4.1 Form of Indenture between Nevada Power Company and IBJ Schroder Bank & Trust Company, as Indenture
Trustee, to be used in connection with issuance of Junior Subordinated Deferrable Interest Debentures.
4.2 Certificate of Trust of NVP Capital III.
4.3 Trust Agreement for NVP Capital III.
4.4 Form of Amended and Restated Declaration of Trust to be used in connection with issuance of Preferred
Securities.
4.5 Form of Preferred Security Certificate for NVP Capital III (included in Exhibit 4.4).
4.6 Form of Common Security Certificate for NVP Capital III (included in Exhibit 4.4).
4.7 Form of Preferred Securities Guarantee Agreement (included in Exhibit 4.4).
4.8 Form of Common Securities Guarantee Agreement (included in Exhibit 4.4).
4.9 Form of Junior Subordinated Deferrable Interest Debenture (included in Exhibit 4.1).
5.1 Opinion of Best Best & Krieger LLP, relating to the legality of the Junior Subordinated Debentures and
the Preferred Securities Guarantee.
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the legality of the Preferred
Securities of NVP Capital III.
8.1 Opinion of Winthrop, Stimson, Putnam & Roberts, as to certain United States federal income tax matters.
12.1 Statement Re: Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Best Best & Krieger LLP (included in Exhibit 5.1).
23.3 Consent of Richards, Layton & Finger, special Delaware counsel (included in Exhibit 5.2).
23.4 Consent of Winthrop, Stimson, Putnam & Roberts (included in Exhibit 8.1).
24.1 Power of Attorney (included on signature page hereto).
25.1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank &
Trust Company, as Indenture Trustee.
25.2 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank &
Trust Company, as Property Trustee.
25.3 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank &
Trust Company, as Preferred Securities Guarantee Trustee.
</TABLE>
- ------------------------
* Incorporated by reference herein as indicated.
<PAGE>
WSP&R
DRAFT
9/14/98
2,800,000 Preferred Securities
NVP CAPITAL III
__% Trust Issued Preferred Securities
(liquidation amount $25 per Preferred Security)
fully and unconditionally guaranteed, as set forth herein, by
NEVADA POWER COMPANY
UNDERWRITING AGREEMENT
, 1998
------- --
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
EVEREN SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
As representatives of the several
Underwriters named in Schedule I hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies & Gentlemen:
The undersigned, NVP Capital III (the "Trust"), a statutory business
trust created under the Business Trust Act of the State of Delaware (Title
12, Chapter 38 of the Delaware Code, 12 Del. C. Section 3801 ET SEQ.) (the
"Delaware Act"), proposes to issue and sell to the several underwriters named
in Schedule I hereto (the "Underwriters," which term, when the context
permits, shall also include any underwriters substituted as hereinafter in
Section 11 provided), for whom you are acting as representatives (in such
capacity, you shall hereinafter be referred to as the "Representatives"),
2,800,000 of its ___% Trust Issued Preferred Securities (liquidation amount
$25 per Preferred Security), representing preferred undivided beneficial
interests in the assets of the Trust (the "Preferred Securities"), as follows:
<PAGE>
SECTION 1. PURCHASE AND SALE. On the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein
set forth, the Trust shall issue and sell to each of the Underwriters named
in Schedule I hereto, and each Underwriter shall purchase from the Trust at
the time and place herein specified, severally and not jointly, the number of
Preferred Securities set forth opposite the name of such Underwriter in
Schedule I hereto at a purchase price of $25.00 per Preferred Security.
The Guarantor (as defined herein) (a) agrees to issue the Guarantor
Securities (as defined herein) concurrently with the issue and sale of the
Preferred Securities as contemplated herein and (b) guarantees the timely
performance by the Trust of its obligations under this Section 1. The Trust
agrees to purchase the Subordinated Debentures (as defined herein) with the
proceeds of the Trust Securities (as defined herein) as contemplated herein.
Because the proceeds of the sale of the Preferred Securities, together
with the proceeds from the sale by the Trust to the Guarantor of the Common
Securities (as defined herein), will be used to purchase the Subordinated
Debentures, the Guarantor hereby agrees to pay on the Closing Date (as
defined herein) to Bear, Stearns & Co. Inc., for the accounts of the several
Underwriters, as compensation for their arranging the investment therein of
such proceeds, an amount equal to $.__ per Preferred Security (or $___ in the
aggregate); provided that, such compensation for sales of 100,000 or more
Preferred Securities to a single purchaser will be $.__ per Preferred
Security. Therefore, to the extent of such sales, the actual amount of such
compensation will be less than the aggregate amount specified in the
preceding sentence.
SECTION 2. DESCRIPTION OF SECURITIES. The Preferred Securities will
be guaranteed by Nevada Power Company, a Nevada corporation (the "Guarantor"
and, together with the Trust, the "Offerors"), with respect to distributions
and payments upon liquidation and redemption (the "Preferred Securities
Guarantee") pursuant to, and to the extent set forth in, the Preferred
Securities Guarantee Agreement (the "Preferred Securities Guarantee
Agreement"), dated as of _____ __, 1998, between the Guarantor and IBJ
Schroder Bank & Trust Company, as trustee (the "Guarantee Trustee"), and
entitled to the benefits of the Guarantor's covenant in the Indenture (as
defined herein) to pay costs, expenses, debts and obligations of the Trust
(other than with respect to the Trust Securities).
The proceeds from the sale of the Preferred Securities will be combined
with the proceeds from the sale by the Trust to the Guarantor of its common
securities representing undivided beneficial interests in the assets of the
Trust (the "Common Securities" and, together with the Preferred Securities,
the "Trust Securities"), which are guaranteed by the Guarantor, to the extent
set forth in the Prospectus (as defined herein), with respect to
distributions and payments upon liquidation and redemption (the "Common
Securities Guarantee" and, together with the Preferred Securities Guarantee,
the "Guarantees") pursuant to, and to the extent set forth in, the Common
Securities Guarantee Agreement (the "Common Securities Guarantee Agreement"
and, together with the Preferred Securities Guarantee Agreement, the
"Guarantee Agreements"), dated as of _____ __, 1998, by the Guarantor for the
benefit of the holder of the Common Securities. Such combined proceeds will
be used by the Trust to purchase $72,164,950 aggregate principal amount of
____% Junior Subordinated Deferrable Interest Debentures due 2038 issued by
the Guarantor (the "Subordinated Debentures" and, together with the Preferred
Securities Guarantee, the "Guarantor Securities").
2
<PAGE>
The Trust Securities will be issued pursuant to the Amended and Restated
Declaration of Trust of NVP Capital III, dated as of _____ __, 1998 (the
"Trust Agreement"), among the Guarantor, as sponsor, IBJ Schroder Bank &
Trust Company, as property trustee (the "Property Trustee"), Delaware Trust
Capital Management, Inc., a Delaware banking association, as Delaware trustee
(the "Delaware Trustee"), the Regular Trustees (as defined herein), and the
holders, from time to time, of undivided beneficial interests in the assets
of the Trust. The Subordinated Debentures will be issued pursuant to an
Indenture, dated as of _____ __, 1998 (the "Indenture"), between the
Guarantor and IBJ Schroder Bank & Trust Company, as trustee (the "Indenture
Trustee"). The Preferred Securities and the Guarantor Securities are
referred to herein as the "Securities." The Indenture, the Trust Agreement
and the Guarantee Agreements are collectively referred to herein as the
"Guarantor Agreements."
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS. Each of
the Offerors, jointly and severally, represents and warrants to, and agrees
with, each of the several Underwriters that:
(a) The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File Nos. 333-______
and 333-_______-01) and a related preliminary prospectus for the registration
of the Securities under the Securities Act of 1933 (the "Securities Act") and
the rules and regulations of the Commission promulgated thereunder (the "1933
Act Regulations") and such registration statement, as it may have been
amended, has become effective. The Offerors qualify for use of Form S-3 for
the registration of the Securities. Such registration statement, as amended
at the time it (or the most recent post-effective amendment thereto) became
effective (the "Effective Date"), including the information deemed to be part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations is hereinafter
referred to as the "Registration Statement" and the prospectus constituting a
part thereof, including the documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, in the form filed pursuant to Rule 424(b)(1) or (b)(4) of the
1933 Act Regulations and as it may thereafter be amended or supplemented
pursuant to Section 6(f) hereof, is hereinafter referred to as the
"Prospectus," except that if any revised prospectus shall be provided to the
Underwriters by the Offerors for use in connection with the offering of the
Preferred Securities that differs from the Prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Underwriters for such use. For purposes herein,
"preliminary prospectus" shall mean any preliminary prospectus included in
the Registration Statement prior to the Effective Date or filed with the
Commission pursuant to Rule 424(a) of the 1933 Act Regulations, if used prior
to the Effective Date, or Rule 424(b) of the 1933 Act Regulations, if used
after the Effective Date. All references in this Agreement to financial
statements and schedules and other information that is "contained,"
"included" or "stated" in the Registration Statement or the Prospectus (and
all other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information that are or are
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be, and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus
shall be deemed to mean and include the filing of any document under the
Securities Exchange Act of 1934 (the "1934 Act") that is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be, after the date hereof.
3
<PAGE>
(b) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission. The Registration Statement, at
the Effective Date, the Indenture, the Trust Agreement and the Preferred
Securities Guarantee Agreement, at such time, and any preliminary prospectus,
when delivered to the Underwriters for their use in marketing the Preferred
Securities, fully complied, and the Prospectus, when delivered to the
Underwriters for their use in making confirmations of sales of the Preferred
Securities and at the Closing Date, as it may then be amended or
supplemented, will fully comply, in all material respects with the applicable
provisions of the Securities Act, the Trust Indenture Act of 1939 (the "Trust
Indenture Act"), and the rules and regulations of the Commission promulgated
thereunder (the "1939 Act Regulations"), or pursuant to the 1939 Act
Regulations did or will be deemed to comply therewith. The documents
incorporated or deemed to be incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3, on the date filed with the Commission
pursuant to the 1934 Act, fully complied in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations of
the Commission promulgated thereunder (the "1934 Act Regulations") or
pursuant to the 1934 Act Regulations did or will be deemed to comply
therewith. On the Effective Date, the Registration Statement did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. At the time that any preliminary prospectus was delivered to the
Underwriters for their use in marketing the Preferred Securities, such
preliminary prospectus did not contain any 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. At the time the Prospectus is delivered to the
Underwriters for their use in making confirmations of sales of the Preferred
Securities and at the Closing Date, the Prospectus, as it may then be amended
or supplemented, will not contain any 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 are made, not
misleading. The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3, on the date
filed with the Commission pursuant to the 1934 Act, did not contain any
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 foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Guarantor
by the Representatives specifically for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus or any amendment or
supplement thereto. The Offerors acknowledge and agree that the information
specifically identified in Schedule II hereto constitutes the only
information relating to any Underwriter furnished in writing to the Guarantor
by Representatives specifically for inclusion in the Registration Statement,
any preliminary prospectus or the Prospectus. The Guarantor has not
distributed any offering material in connection with the offering or sale of
the Preferred Securities other than the Registration Statement, any
preliminary prospectus, the Prospectus or any other materials, if any,
permitted by the 1933 Act.
(c) The only subsidiaries (as defined in the 1933 Act Regulations) of
the Guarantor are the subsidiaries listed in Schedule IV hereto (the
"subsidiaries"). The Guarantor and each of its subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Guarantor and each of its subsidiaries
has full corporate
4
<PAGE>
power and authority to conduct all the activities conducted by it, to own or
lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The Trust is a
business trust duly organized, validly existing and in good standing under
the laws of the State of Delaware. The Trust has full trust power and
authority to conduct all the activities conducted by it, to own or lease all
the assets owned or leased by it and to conduct its business as described in
the Registration Statement and the Prospectus. The Guarantor and each of its
subsidiaries is duly licensed or qualified to do business and in good
standing as a foreign corporation in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased
by it makes such license or qualification necessary.
(d) All of the issued and outstanding capital stock of each subsidiary
has been duly authorized and validly issued and is fully paid and
non-assessable, and all of such capital stock owned by the Guarantor,
directly or through subsidiaries, is owned free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity.
(e) The financial statements included or incorporated by reference in
the Registration Statement or the Prospectus present fairly the consolidated
financial condition of the Guarantor as of the respective dates thereof and
the consolidated results of operations and cash flows of the Guarantor for
the respective periods covered thereby, all in conformity with United States
generally accepted accounting principles applied on a consistent basis
throughout the entire periods involved, except as otherwise disclosed in the
Registration Statement and the Prospectus. No other financial statements or
schedules of the Guarantor are required by the 1933 Act, the 1934 Act, the
1933 Act Regulations or the 1934 Act Regulations to be included in the
Registration Statement or the Prospectus. Deloitte & Touche LLP (the
"Accountants"), who have audited certain of such financial statements, are
independent accountants with respect to the Guarantor as required by the 1933
Act and the 1933 Act Regulations. The statements included in the
Registration Statement with respect to the Accountants pursuant to Item 509
of Regulation S-K of the 1933 Act Regulations are true and correct in all
material respects.
(f) The Guarantor maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with United States generally accepted accounting
principles and to maintain accountability for assets, (iii) access to assets
is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(g) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as set forth in or
contemplated by the Registration Statement and the Prospectus, (i) there has
not been any material adverse change in the capitalization of the Guarantor,
the Trust or any of the Guarantor's subsidiaries or in the business,
properties, business prospects, condition (financial or otherwise) or results
of operations of the Guarantor and its subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, (ii) neither the
Guarantor nor any of its subsidiaries has incurred nor will it incur any
material liabilities or obligations, direct or contingent, nor has it entered
into nor will it enter into
5
<PAGE>
any material transactions other than pursuant to this Agreement and the
transactions contemplated by this Agreement and (iii) the Guarantor has not
and will not have paid or declared any dividends (except for regular
quarterly dividends in an amount consistent with past practice) or other
distributions of any kind on any class of its capital stock.
(h) Neither of the Offerors is, nor after giving effect to the offering
and sale of the Preferred Securities, will be, an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act
of 1940 (the "1940 Act").
(i) Except as set forth in or contemplated by the Registration
Statement and the Prospectus, there are no actions, suits or proceedings
pending or, to the best knowledge of the Guarantor and each of its
subsidiaries, threatened against or affecting the Guarantor or any of its
subsidiaries or any of their respective officers in their capacity as such,
before or by any federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision or finding might materially and
adversely affect the Guarantor or any of its subsidiaries, taken as a whole,
or their business, properties, business prospects, condition (financial or
otherwise) or results of operations or materially and adversely affect the
Guarantor's ability to consummate the transactions contemplated by this
Agreement or the Guarantor Agreements (as defined below).
(j) The Guarantor and each of its subsidiaries has (i) all governmental
licenses, permits, consents, orders, approvals and other authorizations
necessary to carry on its business as contemplated in the Prospectus, (ii)
complied in all material respects with all laws, regulations and orders
applicable to it or its business and (iii) performed all its material
obligations required to be performed by it, and is not in default under any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument that is material to the Guarantor
and its subsidiaries, taken as a whole (collectively, a "material contract or
other material agreement"), to which the Guarantor or any subsidiary is a
party or by which its property is bound or affected; to the best knowledge of
the Guarantor and each of its subsidiaries, no other party under any material
contract or other material agreement to which the Guarantor or any subsidiary
is a party is in default in any respect thereunder; and neither the Guarantor
nor any of its subsidiaries is in violation of its articles of incorporation
or by-laws.
(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with (i) the issuance and sale of the Trust Securities by the
Trust, (ii) the purchase of the Subordinated Debentures by the Trust, (iii)
the issuance of the Guarantees or the Subordinated Debentures by the
Guarantor or (iv) the consummation by the Offerors of the transactions
contemplated by this Agreement and the Guarantor Agreements, except an
approving order of the Public Utilities Commission of Nevada (the "PUCN"),
which has been obtained and is in full force and effect, such as have been
obtained under the 1933 Act, the 1933 Act Regulations, the 1934 Act, the 1934
Act Regulations, the 1939 Act and the 1939 Act Regulations and such as may be
required by state securities laws in connection with the purchase and
distribution by the Underwriters of the Preferred Securities.
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(l) This Agreement has been duly authorized, executed and delivered by
each of the Offerors and constitutes a valid and binding instrument of each
of the Offerors enforceable against the Offerors in accordance with the terms
hereof, except as limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting creditors' rights
and by general equitable principles (whether considered in a proceeding in
equity or at law).
(m) The Preferred Securities have been duly authorized by the Trust
Agreement, and, at the Closing Date, will have been duly executed by the
Regular Trustees and, when issued and delivered against payment therefor
pursuant to this Agreement and the Trust Agreement, will be duly and validly
issued and fully paid and non-assessable preferred undivided beneficial
interests in the assets of the Trust entitled to the benefits provided by the
Trust Agreement; the issuance of the Preferred Securities by the Trust is not
subject to preemptive or other similar rights; and the Preferred Securities
conform in all material respects to the description thereof contained in the
Prospectus.
(n) The holders of the Preferred Securities (the "Securityholders")
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
(o) The Common Securities have been duly authorized by the Trust
Agreement, and, at the Closing Date, will have been duly executed by the
Regular Trustees and, when issued and delivered by the Trust to the Guarantor
against payment therefor as set forth in the Trust Agreement, will be duly
and validly issued and fully paid non-assessable undivided beneficial
interests in the Trust entitled to the benefits provided by the Trust
Agreement; the issuance of the Common Securities by the Trust is not subject
to preemptive or other similar rights; at the Closing Date, all of the issued
and outstanding Common Securities will be directly owned by the Guarantor,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; and the Common Securities conform in all material respects
to the description thereof contained in the Prospectus.
(p) The Trust Agreement has been duly qualified under the 1939 Act, and
has been duly authorized by the Guarantor, and, at the Closing Date, will
have been duly executed and delivered by the Guarantor and each of the
Regular Trustees, and, assuming due authorization, execution and delivery of
the Trust Agreement by the Property Trustee and the Delaware Trustee, will
constitute a valid and binding instrument of the Guarantor and the Regular
Trustees enforceable against the Guarantor and the Regular Trustees in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles (whether
considered in a proceeding in equity or at law); and the Trust Agreement
conforms to the description thereof in the Prospectus.
(q) The Preferred Securities Guarantee Agreement has been duly
qualified under the 1939 Act, and has been duly authorized by the Guarantor,
and, at the Closing Date, will have been duly executed and delivered by the
Guarantor, and, assuming due authorization, execution and delivery of the
Preferred Securities Guarantee Agreement by the Guarantee Trustee, will
constitute a valid and binding instrument of the Guarantor enforceable
against the Guarantor in
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accordance with its terms, except as limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles (whether
considered in a proceeding in equity or at law); and the Preferred Securities
Guarantee and the Preferred Securities Guarantee Agreement conform to the
descriptions thereof contained in the Prospectus.
(r) The Common Securities Guarantee Agreement has been duly authorized
by the Guarantor, and, at the Closing Date, will have been duly executed and
delivered by the Guarantor and will constitute a valid and binding instrument
of the Guarantor enforceable against the Guarantor in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting creditors' rights
and by general equitable principles (whether considered in a proceeding in
equity or at law); and the Common Securities Guarantee and the Common
Securities Guarantee Agreement conform to the descriptions thereof contained
in the Prospectus.
(s) The Indenture has been duly qualified under the 1939 Act, and has
been duly authorized by the Guarantor, and, at the Closing Date, will have
been duly executed and delivered by the Guarantor, and assuming due
authorization, execution and delivery of the Indenture by the Indenture
Trustee, will constitute a valid and binding instrument of the Guarantor
enforceable against the Guarantor in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights and by
general equitable principles (whether considered in a proceeding in equity or
at law); and the Indenture conforms to the description thereof contained in
the Prospectus.
(t) The Subordinated Debentures have been duly authorized and, on the
Closing Date, will have been duly executed by the Guarantor and, when
authenticated in the manner provided for in the Indenture and delivered
against payment therefor by the Trust as described in the Prospectus, will
constitute valid and binding obligations of the Guarantor enforceable against
the Guarantor in accordance with their respective terms, except as limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
other similar laws affecting creditors' rights and by general equitable
principles (whether considered in a proceeding in equity or at law) and will
be entitled to the benefits of the Indenture; and the Subordinated Debentures
conform to the description thereof contained in the Prospectus.
(u) Richard L. Hinckley and Richard C. Schmalz, in their capacities as
regular trustees (the "Regular Trustees") under the Trust Agreement, are
employees of the Guarantor and have been duly authorized by the Guarantor to
execute and deliver the Trust Agreement.
(v) Neither (i) the issuance and sale of the Trust Securities by the
Trust and the purchase by the Trust of the Subordinated Debentures, (ii) the
compliance by the Trust with all of the provisions of this Agreement, the
Trust Securities and the Trust Agreement, (iii) the execution, delivery and
performance by the Trust of this Agreement and the Trust Agreement nor (iv)
the consummation of the transactions contemplated herein or therein will
conflict with or constitute a breach of, or default under, or result in the
creation, imposition or violation of any lien, charge or encumbrance upon any
property or assets of the Trust pursuant to, (A) its certificate of trust or
the Trust Agreement, (B) any law, administrative regulation or administrative
or court order or
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decree applicable to the Trust or (C) any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument to which the Trust is a party or by which the Trust is bound or to
which any of the property or assets of the Trust is subject, where, in each
such case, such conflict, breach or default, or lien, charge or encumbrance
would have a material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Trust.
(w) Neither (i) the issuance by the Guarantor of the Guarantees and the
Subordinated Debentures, (ii) the compliance by the Guarantor with all of the
provisions of this Agreement, the Guarantees, the Subordinated Debentures and
the Guarantor Agreements, (iii) the execution, delivery and performance by
the Guarantor of this Agreement and the Guarantor Agreements nor (iv) the
consummation of the transactions contemplated herein or therein will conflict
with or constitute a breach of, or default under, or result in the creation,
imposition or violation of any lien, charge or encumbrance upon any property
or assets of the Guarantor or any of its subsidiaries pursuant to, (A) the
articles of incorporation or by-laws of the Guarantor or any such subsidiary,
(B) any law, administrative regulation or administrative or court order or
decree applicable to the Guarantor or any such subsidiary or (C) any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Guarantor or any such
subsidiary is a party or by which it or any of them is bound or to which any
of the property or assets of the Guarantor or any such subsidiary is subject,
where, in each such case, such conflict, breach or default, or lien, charge
or encumbrance would have a material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of the Guarantor
and its subsidiaries, taken as a whole.
(x) The Guarantor and each of its subsidiaries has good and marketable
title to all properties and assets described in the Registration Statement or
the Prospectus as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the Prospectus
or are not material to the business of the Guarantor or its subsidiaries.
(y) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement that is not described or filed as
required.
(z) No statement, representation, warranty or covenant made by the
Offerors in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Underwriters was or will be, when made,
inaccurate, untrue or incorrect.
(aa) Neither the Guarantor nor any of its directors, officers or
controlling persons has taken directly or indirectly any action intended, or
which might reasonably be expected, to cause or result, under the 1933 Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Guarantor to facilitate the sale or resale of
the Preferred Securities.
(bb) No holder of securities of the Guarantor has rights to the
registration of any securities of the Guarantor because of the filing of the
Registration Statement.
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(cc) Neither the Guarantor nor any of its subsidiaries is involved in
any material labor dispute nor, to the knowledge of the Guarantor, is any
such dispute threatened.
(dd) Neither the Guarantor nor any of its subsidiaries nor, to the
Guarantor's knowledge, any employee or agent of the Guarantor or any
subsidiary has made any payment of funds of the Guarantor or any subsidiary
or received or retained any funds in violation of any law, rule or regulation
or of a character required to be disclosed in the Registration Statement or
the Prospectus.
(ee) Neither the Guarantor nor any of its subsidiaries is currently
subject to the registration requirements of the Public Utility Holding
Company Act of 1935.
SECTION 4. OFFERING. The Representatives advise the Offerors that the
Underwriters propose to make a public offering of their respective portions
of the Preferred Securities as soon after the effectiveness of this Agreement
as in their judgment the Representatives deem advisable. The Representatives
further advise the Offerors that the Preferred Securities initially will be
offered to the public at the initial public offering price specified in the
Prospectus.
SECTION 5. TIME AND PLACE OF CLOSING; DELIVERY TO UNDERWRITERS.
Delivery of certificates for the Preferred Securities and payment of the
purchase price therefor by wire transfer of immediately available funds shall
be made at the offices of [Winthrop, Stimson Putnam & Roberts, One Battery Park
Plaza, New York, New York], at 10:00 A.M., New York time, on _____ __, 1998
or at such other time on the same or such other day as shall be agreed upon
by the Guarantor and the Representatives. The hour and date of such delivery
and payment are herein called the "Closing Date."
The Preferred Securities will be represented by one global certificate
in definitive form and registered in the name of Cede & Co., as the nominee
of The Depository Trust Company. Such global certificate shall be delivered
to the Representatives through the facilities of The Depository Trust Company
in New York, New York for the accounts of the several Underwriters with any
transfer taxes payable in connection with the transfer of the Preferred
Securities duly paid, against payment of the purchase price therefor.
On the Closing Date, the Guarantor will pay, or cause to be paid, the
compensation payable at such time to the Underwriters pursuant to Section 1
hereof by wire transfer in immediately available funds to an account
designated by Bear, Stearns & Co. Inc., for the accounts of the several
Underwriters.
SECTION 6. COVENANTS OF THE OFFERORS. Each of the Offerors, jointly
and severally, covenants and agrees with the several Underwriters:
(a) To prepare the Prospectus in a form approved by the
Representatives, to file the Prospectus pursuant to Rule 424(b) of the 1933
Act Regulations and to not, during such period as the Prospectus is required
by law to be delivered in connection with sales of the Preferred Securities
by an Underwriter or dealer, file any amendment or supplement to the
Registration Statement or the Prospectus, unless a copy thereof shall first
have been submitted to the Underwriters within a reasonable period of time
prior to the filing thereof and the Underwriters shall not have objected
thereto in good faith.
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(b) To notify the Underwriters promptly, and to confirm such notice in
writing, (i) when any post-effective amendment to the Registration Statement
becomes effective, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose or the threat thereof, (iv) of the
happening of any event during the period referred to in Section 6(f) hereof
that in the judgment of the Guarantor makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to
make the statements therein, in the light of the circumstances in which they
are made, not misleading and (v) of receipt by the Guarantor or any
representative or attorney of the Guarantor of any other communication from
the Commission relating to the Offerors, the Registration Statement, any
preliminary prospectus or the Prospectus; and if at any time the Commission
shall issue any order suspending the effectiveness of the Registration
Statement, to make every reasonable effort to obtain the withdrawal of such
order at the earliest possible moment.
(c) Not later than the Closing Date, to deliver to the Representatives
a copy of the Registration Statement in the form that it or the most recent
post-effective amendment thereto became effective or a conformed copy
thereof, certified by an officer of the Guarantor to be in such form.
(d) To deliver to the Underwriters as many copies of the Prospectus
(and any amendments or supplements thereto) as the Underwriters may
reasonably request.
(e) To comply with all the provisions of any undertakings contained in
the Registration Statement.
(f) During such period of time as the Underwriters are required by law
to deliver a prospectus after this Agreement has become effective, if any
event relating to or affecting the Offerors, or of which the Offerors shall
be advised by the Representatives orally (to be confirmed in writing) or in
writing, shall occur which in the opinion of the Guarantor should be set
forth in a supplement or amendment to the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances when it is
delivered to a purchaser of the Preferred Securities, to amend or supplement
the Prospectus so that, as supplemented or amended, it will not contain any
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 when the Prospectus is delivered to a purchaser, not misleading.
(g) To cooperate with the Underwriters and counsel to the Underwriters
in connection with the registration or qualification of the Preferred
Securities (or the Subordinated Debentures issuable upon the redemption of
the Preferred Securities) for offer and sale under the securities or blue sky
laws of such jurisdictions as the Underwriters may request; provided, that in
no event shall the Guarantor be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to general service of process in any jurisdiction where it
is not now so subject.
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(h) During the period of five years commencing on the Effective Date,
to furnish to the Representatives copies of such financial statements and
other periodic and special reports as the Guarantor may from time to time
distribute generally to the holders of any class of its capital stock and to
furnish to the Underwriters a copy of each annual or other report it is
required to file with the Commission.
(i) In the case of the Guarantor, to timely file such reports pursuant
to the 1934 Act as are necessary to make generally available to holders of
its securities, as soon as may be required under the 1934 Act, an earning
statement (which need not be audited but shall be in reasonable detail) for a
period of 12 months ended commencing after the Effective Date, and satisfying
the provisions of Section 11(a) of the 1933 Act (including Rule 158 of the
1933 Act Regulations).
(j) To not at any time, directly or indirectly, take any action
intended, or which might reasonably be expected, to cause or result in, or
which will constitute, stabilization of the price of the Preferred Securities
to facilitate the sale or resale of any of the Preferred Securities.
(k) In the case of the Trust, to apply the net proceeds from the
offering and sale of the Trust Securities and, in the case of the Guarantor,
to apply the net proceeds from the offering and sale of the Subordinated
Debentures, in the manner set forth in the Prospectus under "Use of Proceeds."
(l) In the case of the Guarantor, to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Guarantor with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the 1934 Act for so long as the delivery of a prospectus is required in
connection with the offering and sale of the Preferred Securities.
(m) During the period of 30 days from the date hereof, not to, directly
or indirectly, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, except as provided hereunder, Preferred Securities, any
other beneficial interests in the assets of the Trust, or any preferred
securities or any other securities of the Trust or the Company that are
substantially similar to the Preferred Securities, including any guarantee of
such securities, or any securities convertible into or exchangeable for or
that represent the right to receive securities, preferred securities or any
such substantially similar securities of either the Trust or the Company,
without the prior written consent of the Representatives.
(n) To use their best efforts to cause the Preferred Securities to be
duly authorized for listing on the New York Stock Exchange, Inc. (the
"NYSE"), subject to notice of issuance, and to be registered under the 1934
Act; and if the Preferred Securities are exchanged for Subordinated
Debentures, to use its best efforts to have the Subordinated Debentures
listed on the exchange or other organization on which the Preferred
Securities were then listed and to have the Subordinated Debentures
registered under the 1934 Act.
SECTION 7. PAYMENT OF EXPENSES.
The Guarantor covenants and agrees with the several Underwriters that it
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Guarantor's counsel and accountants in connection with the
registration of the Securities under the 1933 Act and all other expenses in
connection with the preparation, printing and filing of the Registration
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Statement, any preliminary prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing this
Agreement, any Guarantor Agreement, the Securities and any blue sky
memorandum; (iii) all reasonable expenses in connection with the
qualification of the Preferred Securities for offering and sale under state
securities laws as provided in Section 6(g) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with any blue sky memorandum; (iv) any
fees charged by securities rating services for rating the Preferred
Securities; (v) any filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, any
required review by the National Association of Securities Dealers, Inc. of
the terms of the issuance and sale of the Preferred Securities; (vi) the cost
of preparing the Securities; (vii) the reasonable fees and expenses of the
Regular Trustees, the Indenture Trustee, the Property Trustee, the Delaware
Trustee and the Guarantee Trustee, and any agent of any trustee and the
reasonable fees and disbursements of counsel for any trustee in connection
with the Trust Agreement, the Indenture, the Guarantee Agreement and the
Securities; (viii) any fees and expenses in connection with listing the
Preferred Securities and, if applicable, the Subordinated Debentures on the
NYSE and the cost of registering the Preferred Securities and, if applicable,
the Subordinated Debentures, under Section 12 of the 194 Act; and (ix) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section
7. Except as provided in this Section 7 and Section 9 hereof, the
Underwriters will pay all of their own costs and expenses, except that, if
this Agreement is terminated by the Guarantor or the Trust pursuant to any of
the provisions hereof (other than in connection with an Underwriter default
pursuant to Section 11 hereof), if for any reason the Guarantor or the Trust
shall be unable to perform its obligations hereunder or if this Agreement is
terminated by the Underwriters in accordance with the provisions of Section 8
hereof, the Guarantor shall reimburse the several Underwriters for all
out-of-pocket expenses (including the fees, disbursements and other charges
of counsel to the Underwriters) reasonably incurred by them in connection
herewith.
SECTION 8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS.
The obligations of the Underwriters under this Agreement shall be
subject to the condition that all representations and warranties of the
Offerors are, at and as of the Closing Date, true and correct, the condition
that the Offerors shall have performed all of their respective obligations
hereunder theretofore to be performed and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) of the 1933 Act Regulations within the applicable time period
prescribed for such filing by the 1933 Act and the 1933 Act Regulations and
in accordance with Section 6(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and no order suspending trading or striking or
withdrawing the Preferred Securities from listing on the NYSE or registration
thereof under the 1934 Act shall be in effect, no proceedings for such
purpose shall be pending before or threatened by the NYSE and all requests
for additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction.
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(b) Winthrop, Stimson, Putnam & Roberts, counsel for the Underwriters,
shall have furnished to the Representatives an opinion, dated the Closing
Date, with respect to such matters as the Representatives may reasonably
request, and such counsel shall have received such documents and information
as they may reasonably request to enable them to pass upon such matters. In
rendering such opinion, such counsel may (i) state that such opinion is
limited to matters governed by the laws of the United States of America, the
State of New York, the State of Nevada and the State of Delaware, (ii) rely,
as to matters involving the application of the laws of the State of Nevada,
upon the opinion of Richard L. Hinckley, Esq., Vice President, Secretary and
General Counsel of the Guarantor, rendered pursuant to Section 8(d) hereof,
(iii) rely, as to matters involving the application of the laws of the State
of Delaware, upon the opinion of Richards, Layton & Finger, special Delaware
counsel to the Offerors, rendered pursuant to Section 8(e) hereof and (iv)
rely, as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Offerors and of public officials.
(c) Best Best & Krieger LLP, counsel for the Offerors, shall have
furnished to the Representatives an opinion, dated the Closing Date, in form
and substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Guarantor and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, is duly licensed or qualified to do
business and is in good standing as a foreign corporation in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such license or
qualification necessary, has full corporate power and authority to conduct
all the activities conducted by it, to own or lease all the assets owned or
leased by it and to conduct its business as described in the Registration
Statement and the Prospectus and has all governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to carry on
its business as contemplated in the Prospectus. The Guarantor is the sole
record and beneficial owner of all of the capital stock of each of its
subsidiaries and all of the Common Securities.
(ii) The Subordinated Debentures have been duly authorized and
executed by the Guarantor and, when authenticated in the manner provided
for in the Indenture and delivered against payment therefor by the Trust as
described in the Prospectus, will constitute valid and binding obligations
of the Guarantor enforceable against the Guarantor in accordance with their
respective terms, except as limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting creditors'
rights and by general equitable principles (whether considered in a
proceeding in equity or at law) and will be entitled to the benefits of the
Indenture.
(iii) No consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is required
in connection with (A) the issuance and sale of the Trust Securities by the
Trust, (B) the purchase of the Subordinated Debentures by the Trust, (C)
the issuance of the Guarantees or the Subordinated Debentures by the
Guarantor or (D) the consummation by the Offerors of the transactions
contemplated by this Agreement and the Guarantor Agreements, except
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an approving order of the PUCN, which has been obtained and is in full
force and effect, such as have been obtained under the 1933 Act, the 1933
Act Regulations, the 1934 Act, the 1934 Act Regulations, the 1939 Act and
the 1939 Act Regulations and such as may be required by state securities
laws in connection with the purchase and distribution by the Underwriters
of the Preferred Securities.
(iv) The statements set forth in the Prospectus under the caption
"Risk Factors," "Description of the Preferred Securities," "Description of
the Subordinated Debentures," "Description of the Guarantee" and "Effect of
Obligations Under the Subordinated Debentures and the Guarantee," insofar
as they purport to summarize certain provisions of documents or securities
specifically referred to therein, are accurate summaries of such provisions
in all material respects.
(v) Except in each case as to the financial statements and other
financial or statistical data included or incorporated by reference
therein, upon which such counsel need not pass, the Registration Statement,
at the Effective Date, and the Prospectus, as of its date, complied as to
form in all material respects with the applicable requirements of the 1933
Act, the 1939 Act, the 1933 Act Regulations and the 1939 Act Regulations or
pursuant to said regulations are deemed to comply therewith; and with
respect to the documents or portions thereof filed with the Commission
pursuant to the 1934 Act, and incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3, such documents
or portions thereof, on the date they were filed with the Commission,
complied as to form in all material respects with the applicable provisions
of the 1934 Act and the 1934 Act Regulations or pursuant to said
regulations are deemed to comply therewith.
(vi) Such counsel has participated in the preparation of the
Registration Statement and the Prospectus and nothing has come to such
counsel's attention which has caused them to believe that the Registration
Statement, at the Effective Date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus, as of its date and at the Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits 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
(except that such counsel need express no opinion as to the financial
statements and other financial or statistical data included or incorporated
by reference therein).
(vii) The Registration Statement has become effective under the 1933
Act and no order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been instituted or,
to the best of such counsel's knowledge, is threatened, pending or
contemplated.
(viii) All descriptions in the Prospectus of statutes, regulations or
legal or governmental proceedings are accurate and fairly present the
information required to be shown (except that such counsel need express no
opinion as to any such descriptions set forth therein under the caption
"Certain Federal Income Tax Consequences").
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(ix) The Indenture has been duly authorized, executed and delivered by
the Guarantor and constitutes a valid and binding instrument of the
Guarantor enforceable against the Guarantor in accordance with its terms,
except as limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights and
general equitable principles (whether considered in a proceeding in equity
or at law).
(x) The Guarantee Agreements have been duly authorized, executed and
delivered by the Guarantor and constitute valid and binding instruments of
the Guarantor enforceable against the Guarantor in accordance with their
terms, except as limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights and
general equitable principles (whether considered in a proceeding in equity
or at law).
(xi) This Agreement has been duly authorized, executed and delivered
by the Guarantor on behalf of itself and as sponsor under the Trust
Agreement; the Trust Agreement has been duly authorized, executed and
delivered by the Guarantor; and the Preferred Securities have been duly
executed and delivered by the Regular Trustees.
(xii) To the best of such counsel's knowledge, neither the Guarantor
nor any of its subsidiaries is in violation of its articles of
incorporation or by-laws or in default in the performance of any
obligation, agreement or condition contained in any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond, debenture,
note agreement or other evidence of indebtedness, lease, contract or other
agreement or instrument known to such counsel to which the Guarantor or any
of its subsidiaries is a party or by which it or its properties is bound or
affected and neither the Guarantor nor any of its subsidiaries is in
violation of any judgment, ruling, decree, order, franchise, license or
permit known to such counsel or any statute, rule or regulation of any
court or other governmental agency or body applicable to the business or
properties of the Guarantor or any of its subsidiaries, where such
violation or default might have a material adverse effect on the business,
properties, business prospects, condition (financial or otherwise) or
results of operations of the Guarantor or any of its subsidiaries, taken as
a whole.
(xiii) The issuance by the Guarantor of the Guarantees and the
Subordinated Debentures, the compliance by the Guarantor with all of the
provisions of this Agreement, the Guarantees, the Subordinated Debentures
and the Guarantor Agreements, the execution, delivery and performance by
the Guarantor of this Agreement and the Guarantor Agreements and the
consummation of the transactions contemplated herein and therein will not
result in a breach or violation of the articles of incorporation or by-laws
of the Guarantor or any of its subsidiaries.
(xiv) Neither the Trust nor the Guarantor is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company", as such terms are defined in the 1940 Act.
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(xv) Each of the Indenture, the Trust Agreement and the Preferred
Securities Guarantee Agreement is qualified under the 1939 Act and no
proceedings to suspend such qualifications have been instituted or, to the
best of such counsel's knowledge, threatened by the Commission.
In rendering such opinion, such counsel may (i) state that such opinion
is limited to matters governed by the laws of the United States of America,
the State of New York and the State of Nevada, (ii) rely, as to matters
involving the application of the laws of the State of New York, upon the
opinion of Winthrop, Stimson, Putnam & Roberts, counsel for the Underwriters,
rendered pursuant to Section 8(b) hereof, (iii) rely, as to matters involving
the application of the laws of the States of Nevada and Utah, upon the
opinion of Richard L. Hinckley, Esq., Vice President, Secretary and General
Counsel of the Guarantor, rendered pursuant to Section 8(d) hereof, (iv)
rely, as to the matters involving the application of the laws of the State of
Delaware, upon the opinion of Richards, Layton & Finger, special Delaware
counsel to the Offerors, rendered pursuant to Section 8(e) hereof and (v)
rely, as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Offerors and of public officials.
(d) Richard L. Hinckley, Esq., Vice President, Secretary and General
Counsel of the Guarantor, shall have furnished to the Representatives an
opinion, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect set forth in Section
8(c)(i), (iii), (vi), (ix), (x), (xi), (xii) and (xiii) hereof and to the
effect that:
(i) The Subordinated Debentures have been duly authorized and
executed by the Guarantor and, when authenticated in the manner provided
for in the Indenture and delivered against payment therefor by the Trust as
described in the Prospectus, will constitute valid and binding obligations
of the Guarantor, except as limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting creditors'
rights and by general equitable principles (whether considered in a
proceeding in equity or at law) and will be entitled to the benefits of the
Indenture.
(ii) All of the issued and outstanding capital stock of each
subsidiary has been duly authorized and validly issued and is fully paid
and non-assessable, and all of such capital stock owned by the Guarantor,
directly or through subsidiaries, is owned free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity.
(iii) Such counsel knows of no actions, suits or proceedings pending
or threatened against or affecting the Guarantor or any of its subsidiaries
or any of their respective officers in their capacity as such, before or by
any federal or state court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, wherein an
unfavorable ruling, decision or finding might materially and adversely
affect the Guarantor or any of its subsidiaries, taken as a whole, or their
business, properties, business prospects, condition (financial or
otherwise) or results of operations or materially and adversely affect the
Guarantor's ability to consummate the transactions contemplated by this
Agreement or the Guarantor Agreements, except as set forth in or
contemplated by the Registration Statement and the Prospectus.
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(iv) Neither (A) the issuance and sale of the Trust Securities by the
Trust and the purchase by the Trust of the Subordinated Debentures, (B) the
compliance by the Trust with all of the provisions of this Agreement, the
Trust Securities and the Trust Agreement, (C) the execution, delivery and
performance by the Trust of this Agreement and the Trust Agreement nor (D)
the consummation of the transactions contemplated herein or therein will
conflict with or constitute a breach of, or default under, or result in the
creation, imposition or violation of any lien, charge or encumbrance upon
any property or assets of the Trust pursuant to, (x) any law,
administrative regulation or administrative or court order or decree
applicable to the Trust or (y) any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument known to such counsel to which the Trust is a party or by which
the Trust is bound or to which any of the property or assets of the Trust
is subject, where, in each such case, such conflict, breach or default, or
lien, charge or encumbrance would have a material adverse effect on the
condition, financial or otherwise, or the earnings or business affairs of
the Trust.
(v) Neither (A) the issuance by the Guarantor of the Guarantees and
the Subordinated Debentures, (B) the compliance by the Guarantor with all
of the provisions of this Agreement, the Guarantees, the Subordinated
Debentures and the Guarantor Agreements, (C) the execution, delivery and
performance by the Guarantor of this Agreement and the Guarantor Agreements
nor (D) the consummation of the transactions contemplated herein or therein
will conflict with or constitute a breach of, or default under, or result
in the creation, imposition or violation of any lien, charge or encumbrance
upon any property or assets of the Guarantor or any of its subsidiaries
pursuant to, (x) the articles of incorporation or by-laws of the Guarantor
or any such subsidiary, (y) any law, administrative regulation or
administrative or court order or decree applicable to the Guarantor or any
such subsidiary or (z) any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or instrument
known to such counsel to which the Guarantor or any such subsidiary is a
party or by which it or any of them is bound or to which any of the
property or assets of the Guarantor or any such subsidiary is subject,
where, in each such case, such conflict, breach or default, or lien, charge
or encumbrance would have a material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of the
Guarantor and its subsidiaries, taken as a whole.
In rendering such opinion, such counsel may (i) state that such opinion
is limited to matters governed by the laws of the States of Nevada and Utah,
(ii) rely, as to the matters involving the application of the laws of the
State of Delaware, upon the opinion of Richards, Layton & Finger, special
Delaware counsel to the Offerors, rendered pursuant to Section 8(e) hereof
and (iii) rely, as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Offerors and of public officials.
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(e) Richards, Layton & Finger, special Delaware counsel to the
Offerors, shall have furnished to the Representatives an opinion, dated the
Closing Date, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, and all
filings required under the laws of the Delaware Business Trust Act with
respect to the creation and valid existence of the Trust as a business
trust have been made.
(ii) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the trust power and authority to own property and conduct its
business, all as described in the Prospectus, (i) to issue and sell the
Trust Securities in accordance with the Trust Agreement, and as described
in the Prospectus, and to perform its other obligations under the Trust
Agreement, this Agreement and the Trust Securities, (ii) to execute and
deliver this Agreement, and (iii) to consummate the transactions
contemplated by this Agreement.
(iii) The Trust Agreement constitutes a valid and binding instrument
of the Guarantor and the Regular Trustees enforceable against the Guarantor
and the Regular Trustees in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization or other
similar laws affecting creditors' rights, by applicable public policy on
the enforceability of provisions relating to indemnification or
contribution, and by general equitable principles (whether considered in a
proceeding in equity or at law).
(iv) Under the Trust Agreement and the Delaware Business Trust Act,
(A) the issuance and sale by the Trust of the Trust Securities and the
execution and delivery by the Trust of this Agreement, and the performance
by the Trust of its obligations hereunder, have been duly authorized by all
necessary trust action on the part of the Trust and (B) assuming the due
authorization, execution and delivery of this Agreement by the Guarantor as
sponsor under the Trust Agreement on behalf of the Trust and of the
certificates for the Preferred Securities by the Regular Trustees on behalf
of the Trust, this Agreement and the Preferred Securities have been duly
executed and delivered by the Trust.
(v) The Trust Securities have been duly authorized by the Trust
Agreement and the Trust and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and are entitled to the
benefits provided by the Trust Agreement; and the Securityholders, as
beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware; provided that such counsel may note that the Securityholders may
be obligated, pursuant to the Trust Agreement, to provide indemnity and/or
security in connection with and pay taxes or governmental charges arising
from transfers or exchanges of Preferred Securities certificates and the
issuance of replacement Preferred Securities certificates and provide
security and
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indemnity in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Trust Agreement.
(vi) Under the Delaware Business Trust Act and the Trust Agreement,
the issuance of the Trust Securities is not subject to preemptive rights.
(vii) The issuance and sale by the Trust of the Trust Securities and
the execution, delivery and performance by the Trust of this Agreement and
the consummation of the transactions contemplated by this Agreement do not
violate (A) the certificate of trust of the Trust or the Trust Agreement or
(B) any applicable Delaware law, rule or regulation.
(viii) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets, activities
(other than maintaining the Delaware Trustee and the filing of documents
with the Secretary of State of the State of Delaware) or employees in the
State of Delaware, no authorization, approval, consent or order of any
Delaware court or Delaware governmental authority or agency is required to
be obtained by the Trust solely in connection with the issuance and sale of
the Trust Securities (except that such counsel need express no opinion
concerning the securities laws of the State of Delaware).
(ix) Assuming that the Trust derives no income from or connected with
sources within the State of Delaware and has no assets, activities (other
than maintaining the Delaware Trustee and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the State of
Delaware, that the Delaware Trustee satisfies the requirements of Section
3807 of the Delaware Business Trust Act and that the Trust will be treated
as a grantor trust for United States federal income tax purposes, the
Securityholders (other than those holders of the Preferred Securities who
reside or are domiciled in the State of Delaware) will have no liability
for income taxes imposed by the State of Delaware solely as a result of
their participation in the Trust and the Trust will not be liable for any
income tax imposed by the State of Delaware.
In rendering such opinion, such counsel may (i) state that such opinion
is limited to matters governed by the laws of the State of Delaware and (ii)
rely, as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Offerors and of public officials.
(f) Winthrop, Stimson, Putnam & Roberts, as special tax counsel for
the Offerors, shall have furnished to the Representatives an opinion, dated
the Closing Date, in form and substance satisfactory to the Representatives,
to the effect that such firm confirms its opinion described in the Prospectus
under "Certain Federal Income Tax Consequences."
(g) On the date of this Agreement, the Accountants shall have furnished
to the Representatives a letter, dated the date hereof to the effect set
forth in Schedule III hereto, and in form and substance satisfactory to the
Representatives.
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(h) On or after the date hereof, there shall have been no material
adverse change in the capitalization of the Guarantor, the Trust or any of
the Guarantor's subsidiaries or in the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Guarantor and its subsidiaries, taken as a whole, whether or not arising in
the ordinary course of business, the effect of which is in the judgment of
the Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Preferred Securities on the terms and in the manner contemplated in the
Prospectus.
(i) On or after the date hereof, the rating assigned by any nationally
recognized statistical ratings organization to any debt securities or
preferred stock of the Guarantor as of the date hereof shall not have been
lowered, and no such ratings organization shall have publicly announced that
it has placed any debt securities of the Guarantor on what is commonly termed
a "watch list" for possible downgrading.
(j) On or after the date hereof, there shall not have occurred any of
the following: (i) any material adverse change in the financial markets in
the United States or any outbreak or escalation of hostilities or other
national or international calamity or crisis, the effect of which shall be
such as to make it, in the reasonable judgment of the Representatives,
impracticable to market the Preferred Securities or enforce contracts for the
sale of the Preferred Securities, (ii) trading in any securities of the
Guarantor shall have been suspended by the Commission, the NYSE or the
Pacific Exchange, Inc., (iii) trading generally on either the NYSE, the
Pacific Exchange, Inc. or the Nasdaq Stock Market's National Market shall
have been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required,
by either of said exchanges or by order of the Commission or any other
governmental authority or (iv) a banking moratorium shall have been declared
by either federal, Nevada or New York authorities.
(k) At the Closing Date, there shall have been issued and there shall
be in full force and effect an approving order of the PUCN authorizing the
issuance and sale of the Securities.
(l) At the Closing Date, the Representatives shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Guarantor, to the effect that (i) the
representations and warranties of the Guarantor contained herein are true and
correct and (ii) the Guarantor has performed and complied with all agreements
and conditions in this Agreement to be performed or complied with by the
Guarantor at or prior to the Closing Date.
(m) At the Closing Date, the Representatives shall have received a
certificate, dated the Closing Date and signed by an authorized
representative of the Trust, to the effect that (i) the representations and
warranties of the Trust contained herein are true and correct and (ii) the
Trust has performed and complied with all agreements and conditions in this
Agreement to be performed or complied with by the Trust at or prior to the
Closing Date.
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(n) At the Closing Date, the Accountants shall have furnished the
Representatives with a letter, dated the Closing Date, confirming, as of a
date not more than five days prior to the Closing Date, the statements
contained in the letter delivered pursuant to Section 8(g) hereof.
(o) On or prior to the Closing Date, the Representatives shall have
received from the Guarantor evidence reasonably satisfactory to Bear, Stearns
& Co. Inc. that Standard & Poor's Ratings Services and Fitch Investor
Services have publicly assigned to the Preferred Securities ratings of ____
and ____, respectively, which ratings shall be in full force and effect on
the Closing Date.
(p) On or prior to the Closing Date, (i) the Preferred Securities shall
have been duly listed, subject to notice of issuance, on the NYSE and (ii)
the Guarantor's registration statement on Form 8-A relating to the Preferred
Securities shall have become effective under the 1934 Act.
(q) The Offerors will furnish the Underwriters with such additional
certificates and documents as may be reasonably requested.
If any of the conditions specified in this Section 8 shall not
have been fulfilled, this Agreement may be terminated by the Underwriters
upon notice thereof to the Offerors at any time at or prior to the Closing
Date. Any such termination shall be without liability of any party to any
other party, except as otherwise provided in Section 7 and Section 9 hereof.
SECTION 9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors, jointly and severally, will indemnify and hold
harmless each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or in
the Prospectus, or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however,
that neither of the Offerors shall be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission in reliance
upon and in conformity with written information furnished to the Offerors by
the Representatives expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the Offerors, its
directors and officers and each person who controls the foregoing within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any losses, claims, damages or liabilities to
22
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which the Offerors may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or in the Prospectus, or the omission
or alleged omission to state therein a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, in each case to the extent, but only to the
extent, that any such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
preliminary prospectus or the Prospectus in reliance upon and in conformity
with written information furnished to the Offerors by the Representatives
expressly for use therein and will reimburse the Offerors for any legal or
other expenses reasonably incurred by the Offerors in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission to so notify such
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party under such subsection, except to the extent such
omission prejudices the indemnifying party's ability to adequately defend
such action or claim, or otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, which consent shall not be unreasonably withheld, be counsel to the
indemnifying party), unless such indemnified party reasonably objects to such
assumption on the ground that there may be legal defenses available to it
that are different from or in addition to those available to such
indemnifying party, in which case such indemnifying party cannot assume the
control of the defense. If an indemnifying party assumes the defense of such
action, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under subsection (a) or (b) above for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written onsent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include any statement as to, or
an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party. The indemnifying party shall not be required to
indemnify the indemnified party for any amount paid or payable by
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the indemnifying party in the settlement of any claim or action effected
without the written consent of the indemnifying party, which consent shall
not be unreasonably withheld.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and
the Underwriters on the other from the offering of the Securities to which
such loss, claim, damage or liability (or action in respect thereof) relates.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Offerors on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Offerors on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
such offering (before deducting expenses) received by the Offerors bear to
the total underwriting compensation received by the Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Offerors on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such satement or omission. The Offerors
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Preferred Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations with respect to the Preferred
Securities and not joint. The obligations of the Offerors and the
Underwriters under this Section 9 shall be in addition to any liability that
the Offerors and the Underwriters may otherwise have.
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SECTION 10. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. The respective indemnities, agreements, representations,
warranties and other statements of the Offerors and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Offerors, or any officer or director or controlling person of the
Offerors, and shall survive delivery of and payment for the Preferred
Securities.
SECTION 11. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at the Closing Date to purchase the Preferred
Securities which it or they are obligated to purchase hereunder (the
"Defaulted Securities"), then the Representatives shall have the right,
within the first 36 hours thereafter, to make arrangements for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, within such first 36
hour period, the Representatives are unable to make arrangements for the
purchase of all of the Defaulted Securities, then the Offerors shall have the
right, within the next 36 hours thereafter, to make arrangements for any
other underwriter(s) reasonably satisfactory to the nondefaulting
Underwriters to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein
set forth; if, however, after such 72 hours neither the Representatives nor
the Offerors shall have completed such arrangements for the purchase of all
of the Defaulted Securities, then (a) if the aggregate principal amount of
Defaulted Securities does not exceed 10% of the aggregate principal amount of
the Preferred Securities to be purchased pursuant to this Agreement, the
Offerors shall have the right to require the non-defaulting Underwriters
named herein to purchase the full amount thereof in the proportions that
their respective underwriting obligations bear to the underwriting
obligations of all non-defaulting Underwriters, or (b) if the aggregate
principal amount of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Preferred Securities to be purchased pursuant to this
Agreement, or the Offerors shall not exercise their right pursuant to clause
(a) above, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter except as otherwise provided in Section 7 and
in Section 9 hereof.
No action taken pursuant to this Section 11 shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement.
In the event of any such default by any Underwriter or Underwriters as set
forth in this Section 11, either the Representatives or the Offerors shall
have the right to postpone the Closing Date for a period not to exceed seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
SECTION 12. NOTICES. In all dealings hereunder, the Representatives
shall act on behalf of each of such Underwriters, and the parties hereto
shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by the Representatives
jointly.
25
<PAGE>
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail or
facsimile transmission to Bear, Stearns & Co. Inc. at the address set forth
at the beginning of this Underwriting Agreement (to the attention of its
General Counsel) or, if to the Offerors, shall be mailed or delivered to them
at 6226 West Sahara Avenue, Las Vegas, Nevada 89146, Attention: Treasurer;
provided, however, that any notice to an Underwriter pursuant to Section 9(c)
hereof shall be delivered or sent by mail or facsimile transmission to such
Underwriter at its address set forth in its underwriters' questionnaire,
which address will be supplied to the Offerors by the Representatives upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
SECTION 13. PARTIES. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Trust, the Guarantor and, to
the extent provided in Section 9 hereof, the officers and directors of the
Trust, the Guarantor and each person who controls the Trust or the Guarantor
or any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Preferred
Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
SECTION 14. MISCELLANEOUS. THE RIGHTS AND DUTIES OF THE PARTIES TO
THIS UNDERWRITING AGREEMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This
Agreement shall become effective when a fully executed copy thereof is
delivered to the Offerors and to the Representatives. This Agreement may be
executed in any number of separate counterparts, each of which, when so
executed and delivered, shall be deemed to be an original and all of which,
taken together, shall constitute but one and the same agreement.. Should any
part of this Agreement for any reason be declared invalid, such declaration
shall not affect the validity of any remaining portion, which remaining
portion shall remain in full force and effect as if this Agreement had been
executed with the invalid portion thereof eliminated. The term "successor"
as used in this Agreement shall not include any purchaser, as such purchaser,
of any Preferred Securities from the Underwriters.
26
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts of this Agreement, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this Agreement and such
acceptance hereof, shall constitute a binding agreement among each of the
Underwriters and the Guarantor and the Trust.
Very truly yours,
NEVADA POWER COMPANY
By:
-----------------------------
Name:
Title:
NVP CAPITAL III
By: NEVADA POWER COMPANY,
as Sponsor
By:
-----------------------------
Name:
Title:
Accepted as of the date first above written:
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
EVEREN SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
As representatives of the other several
Underwriters named in Schedule I hereto
By: BEAR, STEARNS & CO. INC.
By:
---------------------
Name:
Title:
27
<PAGE>
SCHEDULE I
NVP Capital III
___% Trust Issued Preferred Securities
<TABLE>
<CAPTION>
Number of
Underwriter Preferred Securities
----------- ------------------------
<S> <C>
Bear, Stearns & Co. Inc. .........................
PaineWebber Incorporated .........................
Prudential Securities Incorporated ...............
EVEREN Securities, Inc. ..........................
Credit Suisse First Boston Corporation ...........
---------
Total .................................. 2,800,000
---------
---------
</TABLE>
<PAGE>
SCHEDULE II
NVP Capital III
___% Trust Issued Preferred Securities
Information Furnished in Writing to the Guarantor Specifically for Inclusion
in the Registration Statement, any preliminary prospectus or the Prospectus:
1. The statements with respect to the public offering of the Preferred
Securities set forth in the last paragraph on the cover page of the
Prospectus.
2. The legend on the inside cover page of the Prospectus relating to the
stabilization activities of the Underwriters with respect to the Preferred
Securities.
3. The statements contained in the third paragraph under the table under
"Underwriting" in the Prospectus relating to the resale of the Preferred
Securities by the Underwriters.
4. The statements contained in the seventh paragraph under the table under
"Underwriting" in the Prospectus relating to the stabilization activities of
the Underwriters with respect to the Preferred Securities.
<PAGE>
SCHEDULE III
NVP Capital III
___% Trust Issued Preferred Securities
Pursuant to Section 8(g) of the Underwriting Agreement, the Accountants shall
furnish a letter to the Representatives to the effect that:
(i) They are independent certified public accountants with respect to
the Guarantor and its subsidiaries within the meaning of the 1933 Act and the
1933 Act Regulations;
(ii) In their opinion, the financial statements audited by them and
included or incorporated by reference in the Registration Statement and the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1934 Act, Regulations and the
1934 Act Regulations;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred
to below, a reading of the latest available interim financial statements of
the Guarantor and its subsidiaries, inspection of the minute books of the
Guarantor and its subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus, inquiries
of officials of the Guarantor and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them to
believe that:
(A) (i) the unaudited financial statements included or incorporated
by reference in the Registration Statement and the Prospectus do not comply
as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations or (ii) any material modifications should be made
to the unaudited financial statements included or incorporated by reference
in the Registration Statement and the Prospectus, for them to be in
conformity with United States generally accepted accounting principles;
(B) at the date of the latest available financial statements of the
Guarantor and its subsidiaries and as of a specified date not more than
five days prior to the date of such letter, there have been any changes in
the capital stock of the Guarantor (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in each
case which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Registration Statement and the
Prospectus), any increase in the consolidated long-term debt of the
Guarantor or any decreases in total assets or stockholders' equity of the
Guarantor, in each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the Prospectus,
except in
<PAGE>
each case for changes, increases or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur or which
are described in such letter; and
(C) for the twelve months ended as of the date of the latest
available financial statements of the Guarantor and its subsidiaries there
were any decreases in revenues, operating profit or the total or per share
amounts of net income, in each case as compared with the comparable period
of the preceding year except in each case for decreases which the
Registration Statement and the Prospectus disclose have occurred or may
occur or which are described in such letter; and
(iv) In addition to the audit referred to in their report included
or incorporated by reference in the Registration Statement and the
Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iii) above, they
have carried out certain specified procedures, not constituting an audit
in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Guarantor and its subsidiaries, which are included or incorporated by
reference in the Registration Statement and the Prospectus and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Guarantor and its subsidiaries and
have found them to be in agreement.
<PAGE>
SCHEDULE IV
NVP Capital III
___% Trust Issued Preferred Securities
The following are the only subsidiaries of the Guarantor:
<PAGE>
WSP&R
DRAFT
9/14/98
- ------------------------------------------------------------------------------
NEVADA POWER COMPANY
TO
IBJ SCHRODER BANK & TRUST COMPANY
as Trustee
________________________
INDENTURE
Dated as of _________, 1998
________________________
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE 2038
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 102. Compliance Certificates and Opinions. . . . . . . . . . . . .8
Section 103. Form of Documents Delivered to Trustee. . . . . . . . . . . .9
Section 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . .9
Section 105. Notices, Etc., to Trustee and Company.. . . . . . . . . . . 11
Section 106. Notice to Holders; Waiver.. . . . . . . . . . . . . . . . . 11
Section 107. Conflict with Trust Indenture Act.. . . . . . . . . . . . . 11
Section 108. Effect of Headings and Table of Contents. . . . . . . . . . 12
Section 109. Successors and Assigns. . . . . . . . . . . . . . . . . . . 12
Section 110. Separability Clause.. . . . . . . . . . . . . . . . . . . . 12
Section 111. Benefits of Indenture.. . . . . . . . . . . . . . . . . . . 12
Section 112. Governing Law.. . . . . . . . . . . . . . . . . . . . . . . 12
Section 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE TWO
THE DEBENTURES
Section 201. Form and Dating.. . . . . . . . . . . . . . . . . . . . . . 13
Section 202. Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 203. Payment.. . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 204. Global Debentures.. . . . . . . . . . . . . . . . . . . . . 14
Section 205. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 206. Extension of Interest Payment Period. . . . . . . . . . . . 16
Section 207. Notice of Extension.. . . . . . . . . . . . . . . . . . . . 17
Section 208. No Sinking Fund.. . . . . . . . . . . . . . . . . . . . . . 17
Section 209. Form of Legend for Global Debentures. . . . . . . . . . . . 17
Section 210. Denominations.. . . . . . . . . . . . . . . . . . . . . . . 18
Section 211. Execution, Authentication, Delivery and Dating. . . . . . . 18
i
<PAGE>
Section 212. Temporary Debentures. . . . . . . . . . . . . . . . . . . . 19
Section 213. Registration of Transfer and Exchange.. . . . . . . . . . . 19
Section 214. Mutilated, Destroyed, Lost and Stolen Debentures. . . . . . 20
Section 215. Defaulted Interest; Interest Rights Preserved.. . . . . . . 21
Section 216. Persons Deemed Owners.. . . . . . . . . . . . . . . . . . . 22
Section 217. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE THREE
SATISFACTION AND DISCHARGE
Section 301. Satisfaction and Discharge of Indenture.. . . . . . . . . . 23
Section 302. Application of Trust Money. . . . . . . . . . . . . . . . . 24
ARTICLE FOUR
REMEDIES
Section 401. Events of Default.. . . . . . . . . . . . . . . . . . . . . 24
Section 402. Acceleration of Maturity; Rescission and Annulment. . . . . 25
Section 403. Collection of Indebtedness and Suits for Enforcement
by Trustee. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 404. Trustee May File Proofs of Claim. . . . . . . . . . . . . . 27
Section 405. Trustee May Enforce Claims Without Possession of
Debentures. . . . . . . . . . . . . . . . . . . . . . . . 27
Section 406. Application of Money Collected. . . . . . . . . . . . . . . 27
Section 407. Limitation on Suits.. . . . . . . . . . . . . . . . . . . . 28
Section 408. Unconditional Right of Holders to Receive Principal and
Interest; Acknowledgement Regarding Preferred
Securities Holders. . . . . . . . . . . . . . . . . . . . 28
Section 409. Restoration of Rights and Remedies. . . . . . . . . . . . . 29
Section 410. Rights and Remedies Cumulative. . . . . . . . . . . . . . . 29
Section 411. Delay or Omission Not a Waiver. . . . . . . . . . . . . . . 29
Section 412. Control by Holders. . . . . . . . . . . . . . . . . . . . . 29
Section 413. Waiver of Past Defaults.. . . . . . . . . . . . . . . . . . 30
Section 414. Undertaking for Costs.. . . . . . . . . . . . . . . . . . . 30
Section 415. Waiver of Usury, Stay or Extension Laws.. . . . . . . . . . 30
Section 416. Third Party Beneficiaries.. . . . . . . . . . . . . . . . . 30
ARTICLE FIVE
THE TRUSTEE
Section 501. Certain Duties and Responsibilities.. . . . . . . . . . . . 31
ii
<PAGE>
Section 502. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . 31
Section 503. Certain Rights of Trustee.. . . . . . . . . . . . . . . . . 31
Section 504. Not Responsible for Recitals or Issuance of Debentures. . . 32
Section 505. May Hold Debentures.. . . . . . . . . . . . . . . . . . . . 33
Section 506. Money Held in Trust.. . . . . . . . . . . . . . . . . . . . 33
Section 507. Compensation and Reimbursement. . . . . . . . . . . . . . . 33
Section 508. Disqualification; Conflicting Interests.. . . . . . . . . . 34
Section 509. Corporate Trustee Required; Eligibility.. . . . . . . . . . 34
Section 510. Resignation and Removal; Appointment of Successor.. . . . . 34
Section 511. Acceptance of Appointment by Successor. . . . . . . . . . . 35
Section 512. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 513. Preferential Collection of Claims Against Company.. . . . . 36
Section 514. Appointment of Authenticating Agent.. . . . . . . . . . . . 36
ARTICLE SIX
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 601. Company to Furnish Trustee Names and Addresses of Holders.. 38
Section 602. Preservation of Information; Communications to Holders. . . 38
Section 603. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . 38
Section 604. Reports by Company. . . . . . . . . . . . . . . . . . . . . 39
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 701. Company May Consolidate, Etc., Only on Certain Terms. . . . 39
Section 702. Successor Substituted.. . . . . . . . . . . . . . . . . . . 40
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 801. Supplemental Indentures without Consent of Holders. . . . . 40
Section 802. Supplemental Indentures with Consent of Holders.. . . . . . 40
Section 803. Execution of Supplemental Indentures. . . . . . . . . . . . 41
Section 804. Effect of Supplemental Indentures.. . . . . . . . . . . . . 41
Section 805. Conformity with Trust Indenture Act.. . . . . . . . . . . . 42
Section 806. Reference in Debentures to Supplemental Indentures. . . . . 42
iii
<PAGE>
ARTICLE NINE
COVENANTS
Section 901. Payment of Principal and Interest.. . . . . . . . . . . . . 42
Section 902. Maintenance of Office or Agency.. . . . . . . . . . . . . . 42
Section 903. Money for Debentures Payments to Be Held in Trust.. . . . . 43
Section 904. Statement by Officers as to Default.. . . . . . . . . . . . 44
Section 905. Existence.. . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 906. Maintenance of Properties.. . . . . . . . . . . . . . . . . 44
Section 907. Payment of Taxes and Other Claims.. . . . . . . . . . . . . 44
Section 908. Limitation on Dividends; Transactions with Affiliates.. . . 45
Section 909. Covenants as to the Trust.. . . . . . . . . . . . . . . . . 45
Section 910. Payment of Expenses.. . . . . . . . . . . . . . . . . . . . 45
Section 911. Listing on an Exchange. . . . . . . . . . . . . . . . . . . 46
Section 912. Waiver of Certain Covenants.. . . . . . . . . . . . . . . . 46
ARTICLE TEN
REDEMPTION OF DEBENTURES
Section 1001. Optional and Special Event Redemption.. . . . . . . . . . . 46
Section 1002. Election to Redeem: Notice to Trustee.. . . . . . . . . . . 47
Section 1003. Selection by Trustee of Debentures to Be Redeemed.. . . . . 47
Section 1004. Notice of Redemption. . . . . . . . . . . . . . . . . . . . 48
Section 1005. Deposit of Redemption Price.. . . . . . . . . . . . . . . . 48
Section 1006. Debentures Payable on Redemption Date.. . . . . . . . . . . 48
Section 1007. Debentures Redeemed in Part.. . . . . . . . . . . . . . . . 49
ARTICLE ELEVEN
SUBORDINATION
Section 1101. Agreement to Subordinate; Ranking of Debentures.. . . . . . 49
Section 1102. Default on Senior Indebtedness. . . . . . . . . . . . . . . 49
Section 1103. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . . 50
Section 1104. Subrogation.. . . . . . . . . . . . . . . . . . . . . . . . 51
Section 1105. Trustee to Effectuate Subordination.. . . . . . . . . . . . 52
Section 1106. Notice by the Company.. . . . . . . . . . . . . . . . . . . 52
Section 1107. Rights of the Trustee; Holders of Senior Indebtedness.. . . 53
iv
<PAGE>
Section 1108. Subordination May Not Be Impaired.. . . . . . . . . . . . . 53
ARTICLE TWELVE
DEFEASANCE
Section 1201. Defeasance and Discharge. . . . . . . . . . . . . . . . . . 54
Section 1202. Conditions to Defeasance. . . . . . . . . . . . . . . . . . 54
Section 1203. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions.. . . . . . 56
Section 1204. Reinstatement.. . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF DEBENTURES
Section 1301. Purpose for Which Meetings May be Called. . . . . . . . . . 57
Section 1302. Call, Notice and Place of Meetings. . . . . . . . . . . . . 57
Section 1303. Persons Entitled to Vote at Meetings. . . . . . . . . . . . 57
Section 1304. Quorum; Action. . . . . . . . . . . . . . . . . . . . . . . 57
Section 1305. Determination of Voting Rights; Conduct and Adjournment
of Meetings.. . . . . . . . . . . . . . . . . . . . . . . 58
Section 1306. Counting Votes and Recording Action of Meetings.. . . . . . 59
Exhibit A: Form of Debenture
</TABLE>
v
<PAGE>
NEVADA POWER COMPANY
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
Section 310 (a) (1) . . . . . . . . . . . . . . 509
(a) (2) . . . . . . . . . . . . . . 509
(a) (3) . . . . . . . . . . . . . . Not Applicable
(a) (4) . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . 508
510
Section 311 (a) . . . . . . . . . . . . . . 513
(b) . . . . . . . . . . . . . . 513
Section 311 (a) . . . . . . . . . . . . . . 601
. . . . . . . . . . . . . . 602
(b) . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . 602
Section 313 (a) . . . . . . . . . . . . . . 603
(b) . . . . . . . . . . . . . . 603
(c) . . . . . . . . . . . . . . 603
(d) . . . . . . . . . . . . . . 603
Section 314 (a) . . . . . . . . . . . . . . 604
(a) (4) . . . . . . . . . . . . . . 101
. . . . . . . . . . . . . . 904
(b) . . . . . . . . . . . . . . Not Applicable
(c) (1) . . . . . . . . . . . . . . 102
(c) (2) . . . . . . . . . . . . . . 102
(c) (3) . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . 102
Section 315 (a) . . . . . . . . . . . . . . 501
(b) . . . . . . . . . . . . . . 502
(c) . . . . . . . . . . . . . . 501
(d) . . . . . . . . . . . . . . 501
(e) . . . . . . . . . . . . . . 414
Section 316 (a) . . . . . . . . . . . . . . 101
(a) (1) (A) . . . . . . . . . . . . . . 402
. . . . . . . . . . . . . . 412
(a) (1) (B) . . . . . . . . . . . . . . 413
(a) (2) . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . 408
(c) . . . . . . . . . . . . . . 104
. . . . . . . . . . . . . . 401
. . . . . . . . . . . . . . 402
i
<PAGE>
. . . . . . . . . . . . . . 412
Section 317 (a) (1) . . . . . . . . . . . . . . 403
(a) (2) . . . . . . . . . . . . . . 404
(b) . . . . . . . . . . . . . . 903
Section 318 (a) . . . . . . . . . . . . . . 107
</TABLE>
- ----------------
This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
<PAGE>
INDENTURE, dated as of ____________, 1998, between NEVADA POWER
COMPANY, a corporation duly organized and existing under the laws of the
State of Nevada (herein called the "Company"), having its principal office at
6226 West Sahara Avenue, Las Vegas, Nevada 89146, and IBJ SCHRODER BANK &
TRUST COMPANY, a New York banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its ____% Junior Subordinated
Deferrable Interest Debentures due 2038 (herein called the "Debentures").
All things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Debentures, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with United States generally
accepted accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of such
computation;
(4) the words "Article" and "Section" refer to an Article and
Section, respectively, of this Indenture;
<PAGE>
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(6) a reference to the masculine includes the feminine and vice
versa.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Interest" has the meaning given such term in
Section 205(3).
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 514 to act on behalf of the Trustee to authenticate the
Debentures.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Securities" has the meaning given to such term in the
Declaration.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, Chief
Executive Officer, President or a Vice President, Treasurer or an Assistant
Treasurer or other officer or agent of the Company duly authorized by the
board of directors of the Company to execute such request or order.
"Compounded Interest" has the meaning given such term in Section 206.
"Corporate Trust Office" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of
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execution of this Indenture is located at One State Street, New York,
New York 10004, Attention: Corporate Trust Department.
"Corporation" means a corporation, association, company,
joint-stock company or statutory business trust.
"Debentures" has the meaning stated in the first recital of this
Indenture and more particularly means any Debentures authenticated and
delivered under this Indenture.
"Debt" means with respect to the Company whether recourse is to all
or a portion of the assets of the Company and whether or not contingent,
(i) every obligation of the Company for money borrowed, (ii) every obligation
of the Company evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of the Company with respect to letters of credit, bankers'
acceptances, lines of credit or similar facilities issued for the account of
the Company, (iv) every obligation of the Company issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business)
(v) every capital lease obligation of the Company and (vi) every obligation
of the type referred to in clauses (i) through (v) of another person and all
dividends of another person the payment of which, in either case, the Company
has guaranteed or is responsible or liable for, directly or indirectly, as
obligor or otherwise.
"Declaration" means the Amended and Restated Declaration of Trust
relating to the Trust dated as of ____________, 1998 among Nevada Power
Company, as sponsor, IBJ Schroder Bank & Trust Company, as Property Trustee,
Delaware Trust Capital Management, Inc., as Delaware Trustee, Richard L.
Hinckley and Richard C. Schmalz, as Regular Trustees, and the holders, from
time to time, of undivided beneficial interests in the Trust issued pursuant
to the Declaration.
"Defaulted Interest" has the meaning specified in Section 215.
"Defeasance" has the meaning specified in Section 1201.
"Deferred Interest" means Additional Interest and Compounded
Interest; any reference herein to interest on the Subordinated Debentures
shall be deemed to include any Deferred Interest.
"Definitive Debentures" has the meaning specified in Section 201.
"Definitive Preferred Security Certificates" has the meaning given
such term in the Declaration.
"Delaware Trustee" has the meaning given such term in the
Declaration.
"Depositary" means, with respect to Debentures issuable in whole or
in part in the form of one or more Global Debentures, a clearing agency
registered under the Exchange Act
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that is designated to act as Depositary for the Debentures; the initial
Depositary shall be The Depository Trust Company, New York, New York.
"Dissolution Event" means a termination of the Trust pursuant to
Section 8.1(a)(v) of the Declaration pursuant to which the Debentures held by
the Property Trustee are to be distributed to the holders of the Trust
Securities in accordance with the Declaration.
"Distributions" has the meaning given such term in the Declaration.
"Event of Default" has the meaning specified in Section 401.
"Exchange Act" means the Securities Exchange Act of 1934, as the
same may be amended from time to time, and any successor legislation.
"Extended Maturity Date" means, if the Company elects to extend the
Maturity Date in accordance with Section 202(2), the date selected by the
Company which is after ____________, 2038 but no later than ____________,
2047.
"Extension Period" has the meaning given such term in Section 206.
"Global Certificate" has the meaning given such term in the
Declaration.
"Global Debentures" has the meaning given such term in
Section 204(1)(a).
"Holder" means the Person in whose name a Debenture is registered
in the Register.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended, including, for all purposes
of this instrument, the provisions of the Trust Indenture Act that are deemed
to be a part of and govern this instrument.
"Interest Payment Date," has the meaning given to such term in
Section 205(1).
"Interest Rate" has the meaning given such term in Section 205(1).
"Investment Company Act Event" means receipt by the Trust or the
Company of an opinion of nationally recognized independent counsel
experienced in such matters to the effect that, as a result of a change in
law or regulation or a written change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or
regulatory authority after the date hereof, there is more than an
insubstantial risk that the Trust is or will be considered an investment
company under the Investment Company Act of 1940 (the "1940 Act").
"Lien" means any lien, mortgage, pledge, security interest, charge
or other encumbrance of any kind.
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"Maturity," when used with respect to any Debenture, means the date
on which the principal of such Debenture or an installment of interest
thereon becomes due and payable as therein or herein provided, whether at an
Interest Payment Date, at the Maturity Date or by declaration of
acceleration, call for redemption or otherwise.
"Maturity Date" means the date determined in accordance with
Section 202 and on which the Debentures shall mature and the principal
thereof shall be due and payable together with all accrued and unpaid
interest thereon, including Deferred Interest, if any, which date shall be
either ____________, 2038 or the Extended Maturity Date.
"Officer's Certificate" means a certificate signed by the Chief
Executive Officer, President, a Vice President, Treasurer or an Assistant
Treasurer or other officer or agent of the Company duly authorized by the
board of directors of the Company to execute such certificate, and delivered
to the Trustee. The officer signing an Officer's Certificate pursuant to
Section 904 shall be the principal executive, financial or accounting officer
of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall, and which opinion shall, be
acceptable to the Trustee.
"Outstanding," when used with respect to the Debentures, means, as
of the date of determination, all Debentures theretofore authenticated and
delivered under this Indenture, EXCEPT:
(1) Debentures theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) Debentures for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Debentures; provided that, if such Debentures are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Debentures as to which Defeasance has been effected pursuant to
Section 1202; and
(4) Debentures which have been paid pursuant to Section 214 or in
exchange for or in lieu of which other Debentures have been authenticated
and delivered pursuant to this Indenture, other than any such Debentures in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Debentures are held by a bona fide purchaser
in whose hands such Debentures are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Debentures have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Debentures owned by the Company or any other obligor upon the Debentures or
any Subsidiary of the Company or of such other obligor shall be disregarded
and
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deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Debentures which a Responsible
Officer of the Trustee knows to be so owned shall be so disregarded.
Debentures so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debentures and that the
pledgee is not the Company or any other obligor upon the Debentures or any
Subsidiary of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of or interest on any Debenture on behalf of the Company.
"Person" means a legal person, including any individual,
corporation, estate, limited liability company, partnership, joint venture,
association, joint stock company, trust, statutory business trust,
unincorporated association or government or any agency or political
subdivision thereof.
"Place of Payment" means, except as otherwise specified herein, the
Corporate Trust Office of the Trustee.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 214 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture
shall be deemed to evidence the same debt as the lost, destroyed, mutilated
or stolen Debenture.
"Preferred Securities" means 2,800,000 ____% Trust Issued Preferred
Securities of the Trust representing preferred undivided beneficial interests
in the assets of the Trust.
"Preferred Securities Guarantee" has the meaning given such term in
the Declaration.
"Property Trustee" has the meaning given such term in the
Declaration.
"Redemption Date", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price" has the meaning specified in Section 1001(1)(a).
"Register" and "Registrar" have the respective meanings specified
in Section 213.
"Regular Record Date" has the meaning given to such term in
Section 205(1).
"Regular Trustee" has the meaning given to such term in the
Declaration.
"Responsible Officer," when used with respect to the Trustee, means
any vice president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer or any other officer in the Corporate Trust Office of
the Trustee customarily performing functions similar to those performed by
any of the above designated officers and having direct responsibility for the
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administration of this Indenture, and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Securities Act" means the Securities Act of 1933, as the same may
be amended from time to time, or any successor legislation.
"Senior Indebtedness" means, with respect to the Company, principal
of and premium and interest, if any, on Debt of the Company, except for
(i) any Debt that is by its terms subordinated to or PARI PASSU with the
Debentures, (ii) any Debt (including all other debt securities and guarantees
in respect of those debt securities) initially issued to any trust, or a
trustee of such trust, partnership, or other entity affiliated with the
Company that is, directly or indirectly, a financing vehicle of the Company
in connection with the issuance by such entity of preferred securities or
other similar securities that contain or have applicable thereto
subordination provisions substantially identical in effect to the
subordination provisions set forth herein applicable to the Debentures
providing for such indebtedness being junior and subordinate in right of
payment to all Senior Indebtedness, (iii) any Debt of the Company which when
incurred and without respect to any election under Section 1111(b) of the
United States Bankruptcy Code, was without recourse to the Company, (iv) any
Debt of the Company to any of its Subsidiaries, (v) Debt to any employee of
the Company, (vi) any liability for taxes and (vii) Debt or monetary
obligations to trade creditors created or assumed by the Company or any of
its Subsidiaries in the ordinary course of business in connection with the
obtaining of goods, materials or services.
"Special Event" means the occurrence of an Investment Company Act
Event or a Tax Event.
"Special Record Date" for the payment of any Defaulted Interest on
any Debenture means a date fixed by the Trustee pursuant to Section 215.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
"Tax Event" means receipt by the Trust or the Company of an opinion
of nationally recognized independent tax counsel experienced in such matters
to the effect that, as a result of (i) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any amendment to or change in an
interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority (including the
enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date hereof), (iii) any
interpretation or pronouncement by any such body, court, agency or authority
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (iv) any action
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taken by any governmental agency or regulatory authority, which amendment or
change is enacted, promulgated or effective, or which interpretation or
pronouncement is issued or announced, or which action is taken, in each case
on or after the date hereof, there is more than an insubstantial risk that
(a) the Trust is, or within 90 days of the date thereof will be, subject to
United States federal income tax with respect to income accrued or received
on the Debentures, (b) interest payable by the Company on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by the
Company for United States federal income tax purposes or (c) the Trust is, or
within 90 days of the date thereof will be, subject to more than a DE MINIMIS
amount of other taxes, duties or other governmental charges.
"Trust" means NVP Capital III, a Delaware statutory business trust.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
with respect to the Debentures pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as the
same may be amended from time to time, or any successor legislation.
"Trust Securities" means Common Securities and Preferred Securities.
"U.S. Government Obligations" has the meaning specified in
Section 1202(1).
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
Section 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required
under the Trust Indenture Act. Each such certificate or opinion shall be
given in the form of an Officer's Certificate, if to be given by an officer
of the Company, or an Opinion of Counsel, if to be given by counsel, and
shall comply with the requirements of the Trust Indenture Act and any other
requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent,
or of the holding by any Person of a Debenture, shall be sufficient for any
purpose of this Indenture and (subject to Section 501) conclusive in favor of
the Trustee and the Company and any agent of the Trustee or the Company, if
made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a
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notary public or other officer authorized by law to take acknowledgments of
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a
signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
The ownership, principal amount and serial number of Debentures
shall be proved by the Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Debenture shall bind every future
Holder of the same Debenture and the Holder of every Debenture issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as the record date for the purpose of determining
the Holders of Outstanding Debentures entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
permitted by this Indenture to be given or taken by Holders of Debentures.
With regard to any record date set pursuant to this paragraph, the Holders of
Outstanding Debentures on such record date (or their duly appointed agents),
and only such Persons, shall be entitled to give or take the relevant action,
whether or not such Holders remain Holders after such record date. With
regard to any action that may be given or taken hereunder only by Holders of
a requisite principal amount of Outstanding Debentures (or their duly
appointed agents) and for which a record date is set pursuant to this
paragraph, the Company may, at its option, set an expiration date after which
no such action purported to be given or taken by any Holder shall be
effective hereunder unless given or taken on or prior to such expiration date
by Holders of the requisite principal amount of Outstanding Debentures on
such record date (or their duly appointed agents). On or prior to any
expiration date set pursuant to this paragraph, the Company may, on one or
more occasions at its option, extend such date to any later date. Nothing in
this paragraph shall prevent any Holder (or any duly appointed agent thereof)
from giving or taking, after any expiration date, any action identical to,
or, at any time, contrary to or different from, any action given or taken, or
purported to have been given or taken, hereunder by a Holder on or prior to
such date, in which event the Company may set a record date in respect
thereof pursuant to this paragraph.
Without limiting the foregoing, a Holder entitled hereunder to give
or take any action hereunder with regard to any particular Debenture may do
so with regard to all or any part of the principal amount of such Debenture
or by one or more duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any different part of such principal
amount.
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Section 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office or sent by facsimile
to the Trustee at (212) 858-2952 or at any other number previously
furnished in writing to the Company by the Trustee, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it to the attention of its Treasurer at the address of its
principal office specified in the first paragraph of this instrument or at
any other address previously furnished in writing to the Trustee by the
Company or if sent to the Company by facsimile addressed to it to the
attention of its Treasurer at (702) 367-5864.
Section 106. NOTICE TO HOLDERS; WAIVER.
Except as otherwise expressly provided in or pursuant to this
Indenture, where this Indenture provides for notice to Holders of Debentures of
any event, such notice shall be sufficiently given to Holders of Debentures if
in writing and mailed, first-class postage prepaid, to each Holder of a
Debenture affected by such event, at his address as it appears in the Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.
In any case where notice to Holders of Debentures is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder of a Debenture shall affect the sufficiency of such
notice with respect to other Holders of Debentures given as provided herein.
Any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given or provided. In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Debentures shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
Section 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of
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the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Section 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or any Debenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Debentures, express or implied, shall
give to any Person (including any Paying Agent or Authenticating Agent appointed
pursuant to Section 514), other than the parties hereto and holders of Senior
Indebtedness and their successors hereunder and the Holders of Debentures, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 112. GOVERNING LAW.
This Indenture and the Debentures shall, pursuant to New York General
Obligations Law Section 5-1401, be governed by and construed in accordance with
the law of the State of New York.
Section 113. LEGAL HOLIDAYS.
In any case where any Redemption Date or the Maturity Date shall not
be a Business Day at the Place of Payment, then (notwithstanding any other
provision of this Indenture or the Debentures) payment of principal need not be
made at the Place of Payment on such date, but may be made on the next
succeeding Business Day at the Place of Payment with the same force and effect
as if made on the respective Redemption Date or the Maturity Date, provided that
no interest shall accrue for the period from and after such Redemption Date or
the Maturity Date, as the case may be.
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ARTICLE TWO
THE DEBENTURES
Section 201. FORM AND DATING.
There is hereby authorized $72,164,950 aggregate principal amount of
Debentures designated the "____% Junior Subordinated Deferrable Interest
Debentures due 2038." Pursuant to Section 211, the Debentures are to be
initially issued in fully registered certificated form without interest coupons
("Definitive Debentures") in the name of the Property Trustee pursuant to the
Declaration on behalf of the Trust. The Debentures and the Trustee's
certificate of authentication thereof shall be substantially in the form set
forth in Exhibit A hereto, which is hereby incorporated in and made a part of
this Indenture. The Debentures may have such notations, legends or endorsements
as may be required by any law, rule, usage or agreement to which the Company is
subject.
Section 202. MATURITY.
(1) The Maturity Date will be either:
(a) ____________, 2038; or
(b) if the Company elects to extend the Maturity Date in
accordance with Section 202(2), the Extended Maturity Date.
(2) The Company may at any time before the day which is 90 days
before ____________, 2038, elect to extend the Maturity Date only once to
the Extended Maturity Date, PROVIDED THAT the following conditions in this
Section 202(2) are satisfied both at the date the Company gives notice in
accordance with Section 202(3) of its election to extend the Maturity Date
and at ____________, 2038:
(a) the Company shall not have pending a bankruptcy petition
pursuant to 11 U.S.C. Sections 101 ET. SEQ. or a similar petition
arising under the laws of any other jurisdiction or otherwise be
insolvent;
(b) an Event of Default shall not have occurred and be
continuing;
(c) the Company has made timely payments on the Debentures for
the immediately preceding 18 months without deferrals of interest;
(d) the Trust is not in arrears on payments of Distributions on
the Preferred Securities; and
(e) the Debentures are rated not less than BBB- by Standard &
Poor's Ratings Services or Fitch IBCA, Inc. or the equivalent by any
other nationally recognized statistical rating organization; and
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(f) the Extended Maturity Date is not later than the 49th
anniversary of the issuance of the Preferred Securities.
(3) If the Company elects to extend the Maturity Date in accordance
with this Section 202, the Company shall give notice to Holders of the
Debentures, the Property Trustee, the Trust and the Trustee of the
extension of the Maturity Date and the Extended Maturity Date at least 90
days before ____________, 2038.
Section 203. PAYMENT.
Principal of and interest on Definitive Debentures will be payable,
the transfer of such Debentures will be registrable and such Debentures will be
exchangeable for Debentures bearing identical terms and provisions, at the
Corporate Trust Office of the Trustee; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the Holder
at such address as shall appear in the Register. Notwithstanding the foregoing,
(1) so long as the Holder of the Debentures is the Property Trustee, the payment
of the principal of and interest, including Deferred Interest, if any, on such
Debentures held by the Property Trustee will be made in immediately available
funds at such place and to such account as may be designated by the Property
Trustee and (2) so long as the Debentures are represented by a Global Debenture,
the payment of principal of and interest on the Debentures will be made in
immediately available funds to the Depositary.
Section 204. GLOBAL DEBENTURES.
(1) In connection with a Dissolution Event:
(a) if the Preferred Securities are represented by a global
certificate, the Definitive Debentures registered in the name of the
Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of such global certificate shall be
presented to the Trustee by the Property Trustee for cancellation in
exchange for one global Debenture in an aggregate principal amount
equal to such Definitive Debentures (the "Global Debentures") to be
registered in the name of the Depositary, or its nominee, and
delivered by the Trustee to the Depositary for crediting to the
accounts of its participants pursuant to the instructions of a Regular
Trustee. The Company upon any such presentation shall execute the
Global Debentures in such aggregate principal amount and deliver the
same to the Trustee together with a Company Order for authentication
and delivery in accordance with this Indenture; and
(b) if any Preferred Securities are represented by a Definitive
Preferred Security Certificate, the Definitive Debentures shall be
presented to the Trustee by the Property Trustee for cancellation and
such Definitive Preferred Security Certificate will be deemed to
represent beneficial interests in such Definitive Debentures until
such Definitive Preferred Security Certificate is presented to the
Company or its agent for transfer or reissuance, at which time such
Definitive Preferred Security Certificate will be cancelled, and
Definitive Debentures registered in the name of the holder of such
Definitive Preferred
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Security Certificate or the transferee of the holder of such
Definitive Preferred Security Certificate, as the case may be, with
an aggregate principal amount equal to the aggregate liquidation
amount of such Definitive Preferred Security Certificate will be
executed by the Company and delivered to the Trustee together with
a Company Order for authentication and delivery in accordance with
this Indenture.
(2) The Global Debentures may be transferred, in whole but not in
part only to another nominee of the Depositary, or to a successor
Depositary selected or approved by the Company or to a nominee of such
successor Depositary.
(3) The Global Debentures are exchangeable for Definitive Debentures
registered in the names of persons other than the Depositary or its nominee
only if (a) the Depositary notifies the Company that it is unwilling or
unable to continue as a depository for such Global Debentures and no
successor depository shall have been appointed, (b) the Depositary, at any
time, ceases to be a clearing agency registered under the Exchange Act at
which time the Depositary is required to be so registered to act as such
depository and no successor depository shall have been appointed, (c) the
Company, in its sole discretion, determines that such Global Debentures are
so exchangeable or (d) there shall have occurred an Event of Default with
respect to the Debentures. In such event the Company will execute and,
subject to this Article Two, the Trustee will authenticate and deliver
Definitive Debentures, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Debentures in
exchange for such Global Debentures. Upon the exchange of the Global
Debentures for such Definitive Debentures, in authorized denominations, the
Global Debentures shall be cancelled by the Trustee. Such Definitive
Debentures issued in exchange for the Global Debentures shall be registered
in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee in writing. The Trustee shall
deliver such Definitive Debentures to the Depositary for delivery to the
Persons in whose names such Definitive Debentures are so registered.
Section 205. INTEREST.
(1) Each Debenture will bear interest at the rate of ____% per annum
(the "Interest Rate") from the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal and
(to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Interest
Rate, compounded quarterly, payable (subject to the provisions of Section
206) quarterly in arrears on March 31, June 30, September 30 and December
31 of each year (each, an "Interest Payment Date"), commencing on December
31, 1998, to the Person in whose name such Debenture or any predecessor
Debenture is registered, at the close of business on the regular record
date for such interest installment, which, in respect of any Debenture
registered in the name of the Property Trustee or any Global Debenture,
shall be the close of business on the Business Day next preceding that
Interest Payment Date (the "Regular Record Date"). Notwithstanding the
foregoing sentence, if the Debentures are not registered in the name of
the Property Trustee or if the Debentures are not
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represented by Global Debentures, the Company may select a regular record
date for such interest installment which shall be any date at least one
Business Day before an Interest Payment Date.
(2) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period
shorter than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such a
30-day month. In the event that any date on which interest is payable on
the Debentures is not a Business Day, then payment of the interest payable
on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such
delay), except that, notwithstanding the provisions of Section 113, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(3) If at any time while the Property Trustee is the Holder of any
Debentures, the Trust is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes)
imposed by the United States, or any other taxing authority, then, in such
case, the Company will pay as additional interest on the Debentures
("Additional Interest"), such additional amounts as shall be required so
that the net amounts received and retained by the Trust after paying such
taxes, duties, assessments or other governmental charges will not be less
than the amounts the Trust would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
Section 206. EXTENSION OF INTEREST PAYMENT PERIOD.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time, and from time to time, during the term
of the Debentures to defer payments of interest by extending the interest
payment period on the Debentures for a period not exceeding 20 consecutive
quarters (each, an "Extension Period"), and not beyond the Maturity Date. To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 206, will bear interest thereon at the Interest Rate compounded
quarterly for each quarter of the Extension Period ("Compounded Interest"). At
the end of the Extension Period the Company shall pay all interest accrued and
unpaid on the Debentures, including any Deferred Interest that shall be payable,
to the Holders of the Debentures in whose names the Debentures are registered in
the Register on the first Regular Record Date after the end of the Extension
Period. Prior to the termination of any Extension Period, the Company may
further defer payments of interest by extending the interest payment period,
provided that such Extension Period together with all such previous and further
extensions thereof shall not exceed 20 consecutive quarters or the Maturity
Date. Upon the termination of any Extension Period and upon the payment of all
amounts then due, the Company may commence a new Extension Period, subject to
the foregoing requirements. No interest shall be due and payable during an
Extension Period except at the end thereof.
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Section 207. NOTICE OF EXTENSION.
(1) If the Property Trustee is the only Holder of the Debentures at
the time the Company selects an Extension Period, the Company shall give
written notice to the Regular Trustees, and the Property Trustee of its
selection of such Extension Period one Business Day prior to the earlier of
(a) the next succeeding date on which Distributions on the Trust Securities
are payable and (b) the date the Regular Trustees are required to give
notice of the record date or the date such Distributions are payable to the
New York Stock Exchange, Inc. (or other applicable self-regulatory
organization) or to holders of the Preferred Securities, but in any event
at least one Business Day before such record date.
(2) If the Property Trustee is not the only Holder of the Debentures
at the time the Company selects an Extension Period, the Company shall give
the Holders of the Debentures and the Trustee written notice of its
selection of such Extension Period 10 Business Days prior to the earlier of
(i) the next succeeding Interest Payment Date and (ii) the date the Company
is required to give notice of the record or such Interest Payment Date of
such interest payment to the New York Stock Exchange, Inc. (or other
applicable self-regulatory organization) or to Holders.
(3) The quarter in which any notice is given pursuant to paragraphs
(1) or (2) of this Section 207 shall be counted as one of the 20 quarters
permitted in the maximum Extension Period permitted under Section 206.
Section 208. NO SINKING FUND.
The Debentures are not entitled to the benefit of any sinking fund.
Section 209. FORM OF LEGEND FOR GLOBAL DEBENTURES.
Every Global Debenture authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"THIS DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL DEBENTURE IS EXCHANGEABLE FOR
DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES. EVERY DEBENTURE DELIVERED UPON
REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS GLOBAL
DEBENTURE SHALL BE A GLOBAL DEBENTURE SUBJECT TO THE FOREGOING, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED ABOVE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN
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AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS TO BE MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHERWISE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN."
Section 210. DENOMINATIONS.
The Debentures shall be issued in denominations of $25 and any
integral multiple thereof.
Section 211. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Debentures shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents or any other authorized officer under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Debentures may be
manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures.
The Company shall deliver the Debentures, executed by the Company, to
the Trustee for authentication, together with a Company Order (attaching a form
of the Debentures) for the authentication and delivery of the Debentures, and
the Trustee in accordance with the Company Order shall authenticate and deliver
such Debentures. Each Debenture shall be dated the date of its authentication.
The Trustee shall be entitled to receive and (subject to Section 501) shall be
fully protected in relying upon an Opinion of Counsel stating that the
Debentures, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute the legally valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors, rights generally (including,
without limitation, fraudulent conveyance laws) and by general principles of
equity, including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific
performance or injunctive relief regardless of whether considered in a
proceeding in equity or at law.
No Debenture shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Debenture shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Debenture to the Trustee
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for cancellation as provided in Section 217, for all purposes of this
Indenture such Debenture shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
Section 212. TEMPORARY DEBENTURES.
Pending the preparation of Definitive Debentures or Global Debentures
hereunder, the Company may execute, and upon Company Order the Trustee shall, at
the expense of the Company, authenticate and deliver, temporary Debentures which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of such Definitive
Debentures or Global Debentures in lieu of which they are issued, in registered
form and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such temporary Debentures may determine, as
evidenced by their execution of such temporary Debentures.
Every temporary Debenture shall be executed by the Company and
authenticated by the Trustee and registered by the Registrar, upon the same
conditions, and with like effect, as a Definitive Debenture or a Global
Debenture.
If temporary Debentures are issued, the Company will cause Definitive
Debentures or Global Debentures, as the case may be, to be prepared without
unreasonable delay. After the preparation of such Definitive Debentures or
Global Debentures, the temporary Debentures shall be exchangeable for such
Definitive Debentures or Global Debentures upon surrender of the temporary
Debentures at the office or agency of the Company in the Place of Payment,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Debentures, the Company shall execute and the Trustee shall, at
the expense of the Company, authenticate and deliver in exchange therefor one or
more Definitive Debentures or Global Debentures, of any authorized denominations
and of a like aggregate principal amount and tenor. Until so exchanged such
temporary Debentures shall in all respects be entitled to the same benefits
under this Indenture as Definitive Debentures or Global Debentures.
Section 213. REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company specified therefor being herein sometimes
collectively referred to as the "Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of transfer or exchange of Debentures. The Trustee is hereby appointed
"Registrar" for the purpose of registering transfers or exchanges of Debentures
as herein provided.
Upon surrender for registration of transfer of any Debenture at the
Corporate Trust Office of the Trustee or any office or agency specified therefor
by the Company, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Debentures, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Debentures may be exchanged for other
Debentures, of any authorized denominations and of a like aggregate principal
amount and tenor, upon
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surrender of the Debentures to be exchanged at such office or agency.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Debentures which
the Holder making the exchange is entitled to receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures, other than
exchanges pursuant to Section 212, 806 or 1007 not involving any transfer.
The Company shall not be required (1) to issue, register the transfer
of or exchange Debentures during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Debentures
selected for redemption under Section 1003 and ending at the close of business
on the day of such mailing, or (2) to register the transfer or exchange of any
Debenture so selected for redemption in whole or in part, except the unredeemed
portion of any Debenture being redeemed in part.
Notwithstanding any other provision in this Indenture, no Global
Debenture may be transferred to, or registered or exchanged for Definitive
Debentures unless such transfer, registration or exchange complies with
Section 204. Notwithstanding any other provision in this Indenture, a Global
Debenture to which the restriction set forth in the preceding sentence shall
have ceased to apply may be transferred only to, and may be registered and
exchanged for Definitive Debentures registered only in the name or names of,
such Person or Persons as the Depositary for such Global Debenture shall have
directed and no transfer thereof other than such a transfer may be registered.
Every Debenture authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Debenture to which the
restriction set forth in the first sentence of the preceding paragraph shall
apply, whether pursuant to this Section 213, Section 212, 214, 806 or 1007 or
otherwise, shall be authenticated, registered and delivered in the form of, and
shall be, a Global Debenture.
Section 214. MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES.
If any mutilated Debenture is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Debenture of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
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If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Debenture has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee, pursuant to a
Company Order, shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Debenture, a new Debenture of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section 214, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture, issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Debenture shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Debenture shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debentures duly issued hereunder.
The provisions of this Section 214 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures.
Section 215. DEFAULTED INTEREST; INTEREST RIGHTS PRESERVED.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names such Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Debenture and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause (1) provided. Thereupon the Trustee shall fix a
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special record date (the "Special Record Date") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Debentures at his address as it appears in the Register, not less than 10
days prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Debentures (or their respective Predecessor Debentures) are registered
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange, if, after
notice is given by the Company to the Trustee of the proposed payment
pursuant to this clause (2), such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 215, each
Debenture delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debenture.
Section 216. PERSONS DEEMED OWNERS.
Prior to due presentment of a Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of principal of and any interest
on such Debenture and for all other purposes whatsoever, whether or not such
Debenture be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Registrar
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of a Global
Debenture or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
In the event Debentures are represented by Global Debentures, the
Trustee may deal with the Depositary as the authorized representative of the
beneficial owners thereof and the Depositary may be treated by the Trustee and
its agents, employees, officers and directors as the sole Holder of the
Debentures so issued for all purposes hereunder.
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Section 217. CANCELLATION.
All Debentures surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Debentures
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Debentures
previously authenticated hereunder which the Company has not issued and sold,
and all Debentures so delivered shall be promptly cancelled by the Trustee. No
Debentures shall be authenticated in lieu of or in exchange for any Debentures
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Debentures held by the Trustee shall be disposed of as
directed by a Company Order.
ARTICLE THREE
SATISFACTION AND DISCHARGE
Section 301. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Debentures herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(a) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 214, and
(ii) Debentures for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 903) have been delivered to the Trustee for cancellation; or
(b) all such Debentures not theretofore delivered to the Trustee
for cancellation have become due and payable, and the Company has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Debentures, for principal and any interest
to the date of such deposit;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 507, the obligations of
the Trustee to any Authenticating Agent under Section 514 and, if money shall
have been deposited with the Trustee pursuant to subclause (b) of Clause (1) of
this Section 301, the obligations of the Trustee under Section 302 and the last
paragraph of Section 903 shall survive.
Section 302. APPLICATION OF TRUST MONEY.
Subject to provisions of the last paragraph of Section 903, all money
deposited with the Trustee pursuant to Section 301 shall be held in trust and
applied by it, in accordance with the provisions of the Debentures and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee.
ARTICLE FOUR
REMEDIES
Section 401. EVENTS OF DEFAULT.
"Event of Default," wherever used herein with respect to the
Debentures, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
Fourteen or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Debenture when it
becomes due and payable, and continuance of such default for a period of 10
days; provided, however, that a valid extension of the interest payment
period by the Company for the Debentures in accordance with this Indenture
shall not constitute a default in the payment of interest; or
(2) default in the payment of the principal of any Debenture at its
Maturity; provided, however, that a valid extension of the maturity of the
Debentures in accordance with this Indenture shall not constitute a default
in the payment of principal; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default or
breach for a period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Outstanding Debentures a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
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(4) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(5) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(6) the Trust shall have voluntarily or involuntarily dissolved,
wound up its business or otherwise terminated its existence pursuant to the
Declaration except in connection with (i) the distribution of Debentures to
holders of Trust Securities in liquidation or redemption of their interests
in the Trust, (ii) the redemption of all of the outstanding Trust
Securities of the Trust, or (iii) certain mergers, consolidations or
amalgamations, each as permitted by the Declaration.
Section 402. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Debentures at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Debentures
may declare the principal amount of all of the Debentures to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
the Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in aggregate principal amount of the
Outstanding Debentures, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(a) all overdue interest on the Debentures,
(b) the principal of any Debentures which has become due
otherwise than by such declaration of acceleration and any interest
thereon at the rate prescribed therefor in the Debentures,
(c) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate prescribed therefor in the
Debentures, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to the Debentures, other than
the non-payment of the principal of the Debentures which has become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 413.
No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.
Section 403. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest on any Debenture
when such interest becomes due and payable and such default continues for a
period of 10 days, or
(2) default is made in the payment of the principal of any Debenture
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debentures, the whole amount then due and payable on such
Debentures for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and on
any overdue interest, at the rate or rates prescribed therefor in such
Debentures, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If an Event of Default with respect to the Debentures occurs and is
continuing, the Trustee may in its discretion (or shall at the direction of the
requisite number of Holders pursuant to Section 412) proceed to protect and
enforce its rights and the rights of the Holders by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
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Section 404. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Debentures), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 507.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; PROVIDED,
HOWEVER, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
Section 405. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF DEBENTURES.
All rights of action and claims under this Indenture or the Debentures
may be prosecuted and enforced by the Trustee without the possession of any of
the Debentures or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Debentures in respect of which such
judgment has been recovered.
Section 406. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Debentures and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
507; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Debentures in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Debentures for principal and interest, respectively.
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Section 407. LIMITATION ON SUITS.
No Holder of any Debenture shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Debentures;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Debentures shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request in such amount as shall be reasonably
acceptable to the Trustee;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Debentures;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 408. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST;
ACKNOWLEDGEMENT REGARDING PREFERRED SECURITIES HOLDERS.
(1) Notwithstanding any other provision in this Indenture, the Holder
of any Debenture shall have the right, which is absolute and unconditional,
to receive payment of the principal of and (subject to Section 215)
interest on such Debenture, at the Maturity expressed in such Debenture and
to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
(2) The Company acknowledges that, with respect to any Debentures
registered in the name of the Property Trustee for the benefit of the
Trust, if the Property Trustee fails to enforce its rights under the
Debentures and this Indenture as such Holder, then holders of Preferred
Securities may institute legal proceedings directly against the Company to
enforce such rights without first instituting any legal proceedings against
the Property Trustee or any other Person. Notwithstanding the foregoing,
if an Event of Default has occurred under Section 401(1) or 401(2), any
holder of Preferred Securities may directly institute a proceeding against
the Company for enforcement of payment to such holder of the principal of
or interest on the Debentures having an aggregate principal
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amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due dates
specified in the Debentures.
Section 409. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 410. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures in the last paragraph
of Section 214, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 411. DELAY OR OMISSION NOT A WAIVER.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 412. CONTROL BY HOLDERS.
The Holders of a majority in aggregate principal amount of the
Outstanding Debentures shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Debentures, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 501, the Trustee shall have
the right to decline to follow such direction if the Trustee shall, in good
faith, determine that the
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proceeding so directed would be unjustly prejudicial to the Holders not
joining in any such direction or would potentially involve the Trustee in
personal liability.
Section 413. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Debentures may on behalf of the Holders of all the Debentures
waive any past default hereunder with respect to the Debentures and its
consequences, except a default
(1) in the payment of the principal of or interest on any Debenture,
or
(2) in respect of a covenant or provision hereof which under Article
Eight cannot be modified or amended without the consent of the Holder of
each Outstanding Debenture affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 414. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section 414 nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company.
Section 415. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 416. THIRD PARTY BENEFICIARIES.
The Property Trustee, the trustee under the Preferred Securities
Guarantee and the Delaware Trustee are each a third party beneficiary of, and
shall be entitled to enforce, and to exercise all rights and remedies with
respect to, the provisions of Section 910.
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ARTICLE FIVE
THE TRUSTEE
Section 501. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties, responsibilities, rights, immunities and protection of the
Trustee shall be as provided by the Trust Indenture Act. Prior to any Event of
Default the Trustee shall not be liable except for the performance of such
duties as are specifically set out herein and in the Trust Indenture Act and no
implied covenants or obligations shall be read into this Indenture against the
Trustee. Upon the occurrence of an Event of Default (which has not been cured
or waived), the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent individual would exercise or use under the circumstances
in the conduct of his or her own affairs. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 502. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default known to a Responsible
Officer of the Trustee with respect to the Debentures when, as and to the extent
provided by the Trust Indenture Act and in the manner provided by Section 106
hereof; PROVIDED, HOWEVER, that in the case of any default of the character
specified in Section 401(3) with respect to Debentures, no such notice to
Holders shall be given until at least 30 days after the default is known (as set
forth in Section 503(9)) to a Responsible Officer of the Trustee. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to the Debentures.
Section 503. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 501:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, Officer's
Certificate, statement, instrument, opinion, Opinion of Counsel, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
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(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities (including legal fees and expenses) which
might be incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney upon 10 Business Days advance
written notice and during regular business hours;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Indenture;
(9) the Trustee shall not be charged with knowledge of any Event of
Default unless either (i) a Responsible Officer of the Trustee shall have
actual knowledge or (ii) the Trustee shall have received written notice
thereof in accordance with Section 105(1) hereof from the Company or a
Holder; and
(10) no permissive power or authority available to the Trustee shall
be construed as a duty.
Section 504. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES.
The recitals contained herein and in the Debentures, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no
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representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee or any Authenticating Agent shall not be accountable
for the use or application by the Company of the Debentures or the proceeds
thereof.
Section 505. MAY HOLD DEBENTURES.
The Trustee, any Authenticating Agent, any Paying Agent, any Registrar
or any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Debentures and, subject to Sections 508 and 513,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Registrar or such other
agent.
Section 506. MONEY HELD IN TRUST.
Money held by the Trustee, or by any Paying Agent (other than the
Company if the Company shall act as Paying Agent), in trust hereunder need not
be segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Company.
Section 507. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or willful
misconduct; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder or performance of its
duties hereunder, including the costs and expenses (including legal fees
and expenses) of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
As security for the performance of the obligations of the Company
under this Section 507, the Trustee shall have a claim prior to the Debentures
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of or interest on particular
Debentures.
When the Trustee renders services or incurs expenses after the
occurrence of an Event of Default specified in Sections 401(4) or 401(5) hereof,
the compensation for services
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and expenses are intended to constitute expenses of administration under any
applicable bankruptcy or insolvency law or law applicable to creditors'
rights to the extent permitted by applicable law.
Section 508. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture and the Company
shall take prompt action to have a successor Trustee appointed in the manner
provided herein.
Section 509. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder, which shall be a
Person that (1) is eligible pursuant to the Trust Indenture Act to act as such,
and (2) has a combined capital and surplus of at least $50,000,000 and is
subject to supervision or examination by a Federal or State authority; PROVIDED,
HOWEVER, that if the Trustee shall be a member of a bank holding company group,
such bank holding company group shall have combined capital and surplus of at
least $50,000,000 and the Trustee shall have a combined capital and surplus of
at least $10,000,000. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 509, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
Section 510. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 511.
The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 511 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Debentures.
The Trustee may be removed at any time by Act of the Company or the
Holders of a majority in principal amount of the Outstanding Debentures,
delivered to the Trustee and to the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 508 after written
request therefor by the Company or by any Holder who has been a Holder of a
Debenture for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 509 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 414, any Holder who has been a Holder of a
Debenture for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee (it being
understood that any time there shall be only one Trustee) and shall comply with
the applicable requirements of Section 511. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by an Act of the Holders of a majority in
principal amount of the Outstanding Debentures delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 511, become the successor Trustee and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 511, any Holder who has been a Holder of a Debenture
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders of
Debentures in the manner provided in Section 106. The Company also shall give
notice of appointment (and acceptance of such appointment) of a successor
Trustee to the Trustee who is resigning or being removed. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
No resignation or removal pursuant to this Section 510 shall be
effective unless and until any and all amounts due to such Trustee pursuant to
Section 507 shall have been paid. The obligations of the Company provided for
in Section 507 shall survive such resignation or removal.
Section 511. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee, every
such successor Trustee so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the
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retiring Trustee, provided, however, that no Trustee under this Indenture
shall be liable for any act or omission of any successor Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 512. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures.
In the event any Debentures shall not have been authenticated by such
predecessor Trustee, any such successor Trustee may authenticate and deliver
such Debentures, in either its own name or that of its predecessor Trustee, with
the full force and effect which this indenture provides for the certificate of
authentication of the Trustee.
Section 513. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Debentures), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section 514. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Debentures issued
upon original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 214, and Debentures so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Debentures by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof
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or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall provide notice of such
appointment to the Holders of Debentures, in the manner provided in Section 106.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 507.
If an appointment is made pursuant to this Section 514, the Debentures
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Debentures referred to in the within-mentioned
Indenture.
----------------------------------
As Trustee
----------
By,
----------------------------------
As Authenticating Agent
-----------------------
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By,
----------------------------------
Authorized Officer
------------------
ARTICLE SIX
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 601. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Registrar.
Section 602. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 601 and the names and
addresses of Holders received by the Trustee in its capacity as Registrar. The
Trustee may destroy any list furnished to it as provided in Section 601 upon
receipt of a new list so furnished.
The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Debentures, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
Every Holder of Debentures, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 603. REPORTS BY TRUSTEE.
The Trustee shall transmit to the Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
A copy of each such report shall, at the time of such transmission to
the Holders, be filed by the Trustee with each stock exchange upon which the
Debentures are listed, with the
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Commission and with the Company. The Company will promptly notify the
Trustee when the Debentures are listed on any stock exchange.
Section 604. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to the Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 701. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership, limited
liability company or trust, shall be organized and validly existing under
the laws of the United States of America, any State thereof or the District
of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and interest on
all the Debentures and the performance or observance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company as a result of
such transaction as having been incurred by the Company at the time of such
transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and
be continuing;
(3) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
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Section 702. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 701, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Debentures.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 801. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Debentures; or
(2) to add to the covenants of the Company or to surrender any right
or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by the Trustee,
pursuant to the requirements of Section 511; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, provided that such action pursuant to this clause (5)
shall not adversely affect the interests of the Holders (except for holders
consenting pursuant to Section 802.
Section 802. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debentures, by Act of said Holders
delivered to the Company and the
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Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Indenture or of modifying in any manner the rights of
the Holders under this Indenture; PROVIDED, HOWEVER, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture,
(1) change the Maturity of the principal of or interest on, the
Debentures, or reduce the principal amount thereof or the rate of interest
thereon, or change the coin or currency in which any Debenture or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Maturity thereof (or, in
the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Debentures, the consent of whose Holders is required for any such
supplemental indenture or other modification or amendment of this
Indenture, or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Indenture relating to the
subordination of the Debentures in a manner adverse to the Holders, or
(4) modify any of the provisions of this Section 802 or Section 413,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Debenture affected thereby,
PROVIDED, HOWEVER, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section 802, or the deletion of
this proviso, in accordance with the requirements of Sections 511 and
801(4).
It shall not be necessary for any Act of Holders under this Section
802 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Section 803. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 501) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 804. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form
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a part of this Indenture for all purposes; and every Holder of Debentures
theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby.
Section 805. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 806. REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Debentures.
ARTICLE NINE
COVENANTS
Section 901. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of the Holders that
it will duly and punctually pay the principal of and interest on the Debentures
in accordance with the terms of the Debentures and this Indenture.
Section 902. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Place of Payment for the Debentures
an office or agency where Debentures may be presented or surrendered for
payment, where Debentures may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Place of Payment for the Debentures for such purposes. The Company will give
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prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
Section 903. MONEY FOR DEBENTURES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to the Debentures, it will, on or before each due date of the principal
of or interest on any of the Debentures, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
and interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will immediately notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Debentures, it will, prior to each due date of the principal of or interest on
the Debentures, deposit with a Paying Agent a sum sufficient to pay such amount,
such sum to be held as provided by the Trust Indenture Act, and (unless such
Paying Agent is the Trustee) the Company will immediately notify the Trustee of
its action or failure so to act.
The Company will cause each Paying Agent for the Debentures other than
the Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 903, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Debentures) in the making of any payment in respect of the Debentures, and upon
the written request of the Trustee, forthwith pay to the Trustee all sums held
in trust by such Paying Agent for payment in respect of the Debentures.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or interest
on any Debenture and remaining unclaimed for two years after such principal
or interest has become due and payable shall be paid to the Company on
Company Request (including interest income accrued on said funds to which the
Company is otherwise entitled), or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Debenture shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an appropriate
newspaper in the Place of Payment, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30
days from the
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date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 904. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
Section 905. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 906. MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the conduct of
its business to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; PROVIDED, HOWEVER, that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business and not disadvantageous in any material respect
to the Holders.
Section 907. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or upon the income,
profits or property of the Company, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company; PROVIDED, HOWEVER, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
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Section 908. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES.
If (1) there shall have occurred any event that would constitute an
Event of Default, (2) the Company shall be in default with respect to its
payment of any obligations under the Preferred Securities or the Preferred
Securities Guarantee, or (3) if the Company shall have given notice of its
election to defer payments of interest on the Debentures by extending the
interest payment period as provided herein and such period, or any extension
thereof, shall be continuing, then the Company shall not (1) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or (2) make any
payment of principal of, or interest or premium, if any, on or repay, repurchase
or redeem, or make any sinking fund payment with respect to, any indebtedness of
the Company (including other junior subordinated debt securities) that ranks
PARI PASSU with or junior in right of payment to the Debentures or make any
guarantee payments with respect to the foregoing (other than (a) dividends or
distributions in common stock of the Company, (b) redemptions or purchases of
any rights pursuant to the Company's Stock Purchase Rights Plan, or any
successor to such Stock Purchase Rights Plan, and the declaration of a dividend
of such rights or the issuance of preferred stock under such plans in the
future, (c) payments under the Preferred Securities Guarantee, (d) purchases of
common stock related to the issuance of common stock under the Company's Stock
Purchase and Dividend Reinvestment Plan and any of the Company's benefit plans
for its directors, officers or employees and (e) purchases of common stock
required to prevent the loss or secure the renewal or reinstatement of any
government license or franchise held by the Company or any of its subsidiaries).
Section 909. COVENANTS AS TO THE TRUST.
For so long as the Trust Securities remain outstanding, the Company
will (1) maintain 100% direct or indirect ownership of the Common Securities of
the Trust; PROVIDED, HOWEVER, that any permitted successor of the Company under
this Indenture may succeed to the Company's ownership of the Common Securities,
(2) not cause, as sponsor of the Trust, or permit, as holder of the Common
Securities, the dissolution or winding-up of the Trust, except in connection
with a distribution of the Debentures held by the Trust as provided in the
Declaration, and (3) use its reasonable efforts to cause the Trust (a) to remain
a statutory business trust, except in connection with a distribution of
Debentures as provided in the Declaration, the redemption of all of the Trust
Securities and in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration, and (b) to otherwise continue to be
treated as a grantor trust for United States federal income tax purposes.
Section 910. PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the Debentures
to the Trust in connection with the sale of the Trust Securities by the Trust,
as long as the Preferred Securities are outstanding the Company shall:
(1) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including compensation of the Trustee under the
Indenture in accordance with the provisions of Section 507 of the
Indenture;
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(2) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust; and
(3) pay all other debts and obligations of the Trust (other than with
respect to the Trust Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the
organization, maintenance and dissolution of the Trust, the fees and
expenses of the Property Trustee, the trustee under the Preferred
Securities Guarantee and the Delaware Trustee, the costs and expenses
relating to the operation of the Trust, including without limitation, costs
and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses or printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets).
Section 911. LISTING ON AN EXCHANGE.
If the Debentures are distributed to the holders of the Preferred
Securities upon a Dissolution Event, the Company will use its best efforts to
cause the Debentures to be listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities are then listed.
Section 912. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in this Indenture with respect to the
Debentures if before the time for such compliance the Holders of a majority in
aggregate principal amount of the Outstanding Debentures shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, provided that no such waiver
shall without the consent of each Holder affected thereby (1) change the
Maturity Date, (2) reduce the principal amount of the Debentures or the rate of
interest thereon or extend the time of payment of interest thereon (except
pursuant to Section 206), (3) change any Place of Payment or the currency in
which the Debentures or any interest thereon is payable or (4) reduce the
percentage in principal amount of the Outstanding Debentures, the consent of
whose Holders is required with respect to supplemental indentures and for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for herein.
ARTICLE TEN
REDEMPTION OF DEBENTURES
Section 1001. OPTIONAL AND SPECIAL EVENT REDEMPTION.
The Debentures shall be redeemable in accordance with their terms and
in accordance with this Article as follows:
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(1) OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the other provisions of this Article Ten, the
Company shall have the right to redeem the Debentures, in whole or in
part, from time to time, on or after ________ ___, 2003, at a
redemption price equal to 100% of the principal amount to be redeemed
plus any accrued and unpaid interest thereon to the date of such
redemption (the "Redemption Price"). If the Debentures are only
partially redeemed pursuant to this Section 1001(1), the Debentures
will be redeemed pro rata or by lot or by any other method utilized by
the Trustee; provided that, if at the time of redemption the
Debentures are represented by Global Debentures, the Depositary shall
determine by lot the principal amount of such Debentures held by each
owner of beneficial interests in such Debentures to be redeemed.
(b) If a partial redemption of the Debentures would result in
the delisting of the Preferred Securities, or a delisting of the
Debentures if such Debentures have been distributed to the holders of
the Preferred Securities in liquidation of the Trust, from any
national securities exchange or other organization on which the
Preferred Securities or the Debentures are then listed, the Company
shall not be permitted to effect such partial redemption and may only
redeem the Debentures in whole.
(2) SPECIAL EVENT REDEMPTION. Upon the occurrence of a Special
Event, the Company shall have the right, at any time, to redeem the
Debentures, in whole and not in part, at the Redemption Price.
Section 1002. ELECTION TO REDEEM: NOTICE TO TRUSTEE.
The election of the Company to redeem any Debentures shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Debentures, the Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of the Debentures to be redeemed. In the case of any
redemption of Debentures, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with all conditions precedent to
such redemption.
Section 1003. SELECTION BY TRUSTEE OF DEBENTURES TO BE REDEEMED.
The Trustee shall promptly notify the Company in writing of the
Debentures selected for redemption and, in the case of any Debentures selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures shall relate,
in the case of any Debentures redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debentures which has been or is to be
redeemed.
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Section 1004. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section
106, not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Debentures to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Debentures are to be redeemed,
the identification (and, in the case of partial redemption of any
Debentures, the principal amounts) of the particular Debentures to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date, and
(5) the place or places where such Debentures are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's direction, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
Section 1005. DEPOSIT OF REDEMPTION PRICE.
At least one Business Day prior to any Redemption Date, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 903) an amount of money sufficient to pay the Redemption Price of all of
the Debentures which are to be redeemed on that date. The Redemption Price
shall be paid prior to 12:00 noon, New York time, on the Redemption Date or at
such earlier time as the Company determines.
Section 1006. DEBENTURES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Debentures so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Debentures shall cease to bear interest. Upon surrender of any
such Debenture for redemption in accordance with said notice, such Debenture
shall be paid by the Company at the Redemption Price; PROVIDED, HOWEVER, that
installments of interest whose Maturity is on or prior to the Redemption Date
shall be payable to the Holders of such Debentures, or one or more Predecessor
Debentures, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 215.
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If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date at the rate prescribed therefor in the Debenture.
Section 1007. DEBENTURES REDEEMED IN PART.
Any Debenture which is to be redeemed only in part shall be
surrendered at the Place of Payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Debenture without service charge, a new Debenture or Debentures of like tenor,
of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Debenture so surrendered.
ARTICLE ELEVEN
SUBORDINATION
Section 1101. AGREEMENT TO SUBORDINATE; RANKING OF DEBENTURES.
The Company covenants and agrees, and each Holder of Debentures issued
hereunder by such Holder's acceptance thereof likewise covenants and agrees,
that all Debentures shall be issued subject to the provisions of this Article
Eleven; and each Holder of a Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The payment by the Company of the principal of and interest on the
Debentures shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment in full of all
present and future Senior Indebtedness and shall rank PARI PASSU with (1) all
notes, debentures and other evidences of indebtedness of the Company that shall
contain or have applicable thereto subordination provisions substantially
identical in effect to the subordination provisions applicable to the Debentures
providing for such indebtedness being junior and subordinate in right of payment
to all Senior Indebtedness and (2) obligations to, or rights of, the Company's
other general unsecured creditors, in each case whether outstanding at the date
of this Indenture or thereafter incurred.
No provision of this Article Eleven shall prevent the occurrence of
any default or Event of Default hereunder.
Section 1102. DEFAULT ON SENIOR INDEBTEDNESS.
In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, as the case may be, or in the event that the
maturity of any Senior Indebtedness of the Company, as the case may be, has been
accelerated because of a default, then, in either case,
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no payment shall be made by the Company with respect to the principal
(including redemption payments) of, or interest on, the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 1102, subject to the provisions of Section 1106, such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or a trustee) notify
the Trustee in writing within 90 days of such payment of the amounts then due
and owing on the Senior Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Senior Indebtedness.
Section 1103. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal of or interest on the Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders or the Trustee
would be entitled to receive from the Company, except for the provisions of this
Article Eleven, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior
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Indebtedness of the Company, as the case may be, remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in money in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article Eleven, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article Eleven with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the time be
outstanding provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of such Senior Indebtedness are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or other entity or the liquidation or
dissolution of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to another
corporation or other entity upon the terms and conditions provided for in
Article Seven shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 1103 if such other
corporation or other entity shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Seven.
Nothing in Section 1102 or in this Section 1103 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 507.
Section 1104. SUBROGATION.
Subject to the payment in full of all Senior Indebtedness of the
Company, the rights of the Holders shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company, as the case may be, applicable
to such Senior Indebtedness until the principal of and interest on the
Debentures shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of such Senior Indebtedness of
any cash, property or securities to which the Holders or the Trustee would be
entitled except for the provisions of this Article Eleven to or for the
benefit of the holders of such Senior Indebtedness by Holders or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness of the Company and the Holders, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is understood that
the provisions of this Article Eleven are intended solely for the purposes of
defining the relative rights of the Holders, on the one hand, and the holders
of such Senior Indebtedness on the other hand.
Nothing contained in this Article Eleven or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the Holders, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders the principal of and interest on the
Debentures as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of
the Holders and creditors of the Company, as the case may be, other than the
holders of Senior Indebtedness of the Company, as the case may be, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising
all remedies otherwise permitted by applicable law upon default under the
Indenture, subject to the
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rights, if any, under this Article Eleven of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company, as
the case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred
to in this Article Eleven, the Trustee, subject to the provisions of Section
503, and the Holders shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which any dissolution, winding-up,
liquidation or reorganization proceedings in respect of the Company are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Eleven.
Section 1105. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of Debentures by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article Eleven and appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
Section 1106. NOTICE BY THE COMPANY.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article Eleven.
Notwithstanding the provisions of this Article Eleven or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article Eleven, unless and until a Responsible Officer of
the Trustee shall have received written notice thereof from the Company or a
holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 503, shall be entitled in all respects to assume that
no such facts exist; PROVIDED, HOWEVER, that, if the Trustee shall not have
received the notice provided for in this Section 1106 at least two Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of or interest on any Debenture), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for
which they were received, and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to such
date.
The Trustee, subject to the provisions of Section 503, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness of the Company, as
the case may be (or a trustee on behalf of such holder) to establish that
such notice has been given by a holder of such Senior Indebtedness or a
trustee on
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behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to
the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article Eleven,
the Trustee shall be entitled to require such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent
to the rights of such Person under this Article Eleven, and, if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 1107. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Eleven in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article Eleven, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Section 503, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Holders, the Company or any other Person money
or assets to which any holder of such Senior Indebtedness shall be entitled
by virtue of this Article Eleven or otherwise.
Section 1108. SUBORDINATION MAY NOT BE IMPAIRED.
No right of any present or future holder of any Senior Indebtedness
of the Company to enforce subordination as herein provided shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part
of the Company, or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company, as the case may be, with the
terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Holders, without incurring responsibility to the Holders and without
impairing or releasing the subordination provided in this Article Eleven or
the obligations hereunder of the Holders to the holders of such Senior
Indebtedness, do any one or more of the following: (1) change the manner,
place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any
manner such Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (2) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (3) release any Person liable in
any manner for the collection of such Senior Indebtedness; and (4)
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exercise or refrain from exercising any rights against the Company, as the
case may be, and any other Person.
ARTICLE TWELVE
DEFEASANCE
Section 1201. DEFEASANCE AND DISCHARGE.
The Company shall be deemed to have been discharged from its
obligations with respect to the Outstanding Debentures appertaining thereto
as provided in this Section on and after the date the conditions set forth in
Section 1202 are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by the Outstanding
Debentures and to have satisfied all its other obligations under the
Debentures and this Indenture insofar as the Debentures are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of
Debentures to receive, solely from the trust fund described in Section 1202
and as more fully set forth in such Section, payments in respect of the
principal of and interest on such Debentures when payments are due, (2) the
Company's obligations with respect to the Debentures under Sections 212, 213,
214, 902 and 903, (3) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and (4) this Article Twelve.
Section 1202. CONDITIONS TO DEFEASANCE.
The following shall be the conditions to application of Section
1201 to the Outstanding Debentures:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies the
requirements contemplated by Section 509 and agrees to comply with the
provisions of this Article Twelve applicable to it) as trust funds in trust
for the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
Outstanding Debentures, (a) money in an amount, or (b) U.S. Government
Obligations that through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than
one day before the due date of any payment, money in an amount, or (c) a
combination thereof, in each case, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and interest on
the Debentures on the Maturity thereof in accordance with the terms of this
Indenture and the Debentures. As used herein, "U.S. Government Obligation"
means (x) any security that is (i) a direct obligation of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged or (ii) an obligation of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America the payment of
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which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case (i) or (ii), is
not callable or redeemable at the option of the issuer thereof, and (y)
any depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act, as amended) as custodian with respect to any U.S.
Government Obligation specified in clause (x) and held by such custodian
for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any such U.S.
Government Obligation, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.
(2) The Company shall have delivered to the Trustee an Opinion of
Counsel stating that (a) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date
first set forth hereinabove, there has been a change in the applicable
Federal income tax law, in either case (a) or (b) to the effect that, and
based thereon such opinion shall confirm that, the Holders of the
Outstanding Debentures will not recognize income, gain or loss for United
States federal income tax purposes as a result of the deposit, Defeasance
and discharge to be effected with respect to the Debentures and will be
subject to United States federal income tax on the same amount, in the same
manner and at the same times as would be the case if such deposit,
Defeasance and discharge were not to occur.
(3) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that the Debentures, if then listed on any
Debentures exchange, will not be delisted as a result of such deposit.
(4) No Event of Default or event that (after notice or lapse of time
or both) would become an Event of Default shall have occurred and be
continuing at the time of such deposit or, with regard to any Event of
Default or any such event specified in Sections 401(4), (5) and (6), at any
time on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after
such 90th day).
(5) Such Defeasance shall not cause the Trustee to have a conflicting
interest within the meaning of the Trust Indenture Act (assuming all
Debentures are in default within the meaning of the Trust Indenture Act).
(6) Such Defeasance shall not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the
Company is a party or by which it is bound.
(7) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance have been complied with.
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(8) Such Defeasance shall not result in the trust arising from such
deposit constituting an investment company within the meaning of the 1940
Act, as amended, unless such trust shall be qualified under such Act or
exempt from regulation thereunder.
Section 1203. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 903,
all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee (solely
for purposes of this Section 1203 and Section 1204, the Trustee and any
such other trustee are referred to collectively as the "Trustee")
pursuant to Section 1202 in respect of the Debentures shall be held in
trust and applied by the Trustee, in accordance with the provisions of
the Debentures and this Indenture, to the payment, either directly or
through any such Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders, of all sums
due and to become due thereon in respect of principal and interest, but
money so held in trust need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 1202 or the
principal and interest received in respect thereof other than any such
tax, fee or other charge that by law is for the account of the Holders of
Outstanding Debentures.
Anything in this Article Twelve to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from
time to time upon Company Request any money or U.S. Government
Obligations held by it as provided in Section 1202 with respect to
Debentures that, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof
that would then be required to be deposited to effect a Defeasance with
respect to the Debentures.
Section 1204. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money
in accordance with this Article Twelve with respect to the Debentures by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Debentures shall
be revived and reinstated as though no deposit had occurred pursuant to
this Article Twelve with respect to Debentures until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 1203 with respect to Debentures in accordance with
this Article Twelve; PROVIDED, HOWEVER, that if the Company makes any
payment of principal of or interest on any Debenture following the
reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of Debentures to receive such payment from the
money so held in trust.
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ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF DEBENTURES
Section 1301. PURPOSE FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders.
Section 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(1) The Trustee may at any time call a meeting of Holders for any
purpose specified in Section 1301, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, as the Trustee
shall determine. Notice of every meeting of Holders, setting forth the
time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given, in the manner provided in
Section 106, not less than 21 nor more than 180 days prior to the date
fixed for the meeting. The Trustee or the Company may fix, in advance of
the giving of such notice, a date as the record date for determining the
Holders entitled to notice or to vote at any such meeting not more than 15
days prior to the date fixed for the giving of such notice.
(2) In case at any time the Company or the Holders of at least 10% in
principal amount of the Outstanding Debentures shall have requested the
Trustee to call a meeting of the Holders for any purpose specified in
Section 1301, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
made the first publication of the notice of such meeting within 21 days
after receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Company or the Holders of
Debentures in the amount above specified, as the case may be, may determine
the time and the place in the Borough of Manhattan, The City of New York,
for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in subsection (1) of this Section.
Section 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders, a Person
shall be (1) a Holder of one or more Outstanding Debentures, or (2) a
Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Debentures by such Holder or Holders.
The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at such meeting
and their counsel, any representatives of the Trustee and its counsel and
any representatives of the Company and its counsel.
Section 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in principal amount of
the Outstanding Debentures shall constitute a quorum for a meeting of
Holders. In the absence of a quorum
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within 30 minutes after the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders, be dissolved. In
any other case the meeting may be adjourned for a period of not less than
10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a
period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting. Notice of
the reconvening of any adjourned meeting shall be given as provided in
Section 1302(1), except that such notice need be given only once not less
than five days prior the date on which the meeting is scheduled to be
reconvened.
Except as limited by the proviso to Section 802, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a
quorum is present as aforesaid may be adopted only by the affirmative
vote of the Holders of a majority in principal amount of the Outstanding
Debentures, PROVIDED, HOWEVER, that, except as limited by the proviso to
Section 802, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which
this Indenture expressly provides may be made, given or taken by the
Holders of a specified percentage, which is less than a majority in
principal amount of the Outstanding Debentures may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Debentures.
Any resolution passed or decision taken at any meeting of
Holders duly held in accordance with this Section shall be binding on all
the Holders, whether or not present or represented at the meeting.
Section 1305. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(1) Notwithstanding any other provisions of this Indenture, the
Company may make such reasonable regulations as it may deem advisable for
any meeting of Holders in regard to proof of the holding of Debentures and
of the appointment of proxies and in regard to the appointment and duties
of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meetings as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Debentures shall be proved in the manner
specified in Section 104. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other
proof.
(2) The Company shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in Section 1302(2), in
which case the Company or the Holders calling the meeting, as the case may
be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by vote
of the Persons entitled to vote a majority in principal amount of the
Outstanding Debentures represented at the meeting.
58
<PAGE>
(3) At any meeting each Holder or proxy shall be entitled to one vote
for each $1,000 principal amount of Debentures held or represented by him;
PROVIDED, HOWEVER, that no vote shall be cast or counted at any meeting in
respect of any Debenture challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting
shall have no right to vote, except as a Holder or proxy.
(4) Any meeting of Holders duly called pursuant to Section 1302 at
which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in principal amount of the Outstanding
Debentures represented at the meeting; and the meeting may be held as so
adjourned without further notice.
Section 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed the
signatures of the Holders or of their representatives by proxy and the
principal amounts and serial numbers of the Outstanding Debentures held
or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in triplicate
of all votes cast at the meeting. A record, at least in triplicate, of
the proceedings of each meeting of Holders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that
said notice was given as provided in Section 1302 and, if applicable,
Section 1304. Each copy shall be signed and verified by the affidavits
of the permanent chairman and secretary of the meeting and one such copy
shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
59
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
NEVADA POWER COMPANY
By:
----------------------------------
Name:
Title:
Attest:
- --------------------------------------
Secretary
IBJ SCHRODER BANK & TRUST COMPANY
as Trustee
By:
----------------------------------
Name:
Title:
Attest:
- --------------------------------------
Secretary
<PAGE>
EXHIBIT A
FORM OF DEBENTURE
(FORM OF FACE OF DEBENTURE)
(IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT -- This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter
referred to and is registered in the name of The Depository Trust Company
(the "Depositary") or a nominee of the Depositary. This Debenture is
exchangeable for Debentures registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Debenture (other than a transfer of this
Debenture as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances. Every
Debenture delivered upon registration of transfer of, or in exchange for, or
in lieu of, this Global Debenture shall be a Global Debenture, subject to the
foregoing, except in the limited circumstances described above.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the issuer or
its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or in such other
name as requested by an authorized representative of DTC (or to such other
entity as is requested by an authorized representative of DTC) and any
payment is made to Cede & Co. (or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.)
<PAGE>
No.
----
$
------------
CUSIP No.
------------
% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE 2038
Nevada Power Company, a Nevada corporation (the "Company"), which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to ____________________, or
registered assigns, the principal sum of __________________ Dollars on
______________, 2038, (or on such later date on or before ____________, 2047,
if the Company elects to extend the maturity date as further described
herein), together with any accrued and unpaid interest thereon, including any
Deferred Interest, and to pay interest on said principal sum from
____________, 1998, or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on March 31, June 30,
September 30 and December 31 of each year (each such date, an "Interest
Payment Date") commencing December 31, 1998, at the rate of % per
annum until the principal hereof shall have become due and payable, and on
any overdue principal and (without duplication and to the extent that payment
of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any period shorter than a full quarterly period for which
interest is computed will be computed on the basis of the actual number of
days elapsed per 30-day month. In the event that any date on which interest
is payable on this Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Debenture (or one or more
Predecessor Debentures, as defined in said Indenture) is registered at the
close of business on the regular record date for such interest installment,
which shall be the close of business on the Business Day next preceding such
Interest Payment Date. [IF THE PROPERTY TRUSTEE IS NO LONGER THE HOLDER OF
THE DEBENTURES OR PURSUANT TO THE PROVISIONS OF THE INDENTURE THE DEBENTURES
ARE NO LONGER REPRESENTED BY GLOBAL DEBENTURES -- which shall be the close of
business on the ___ Business Day next preceding such Interest Payment Date.]
Any such interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the registered Holders on such regular
record date and may be paid to the Person in whose name this Debenture (or
one or more Predecessor Debentures) is registered at the close of business on
a special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered Holders
of the Debentures not less than 10 days prior to such special record date, or
may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be
listed, and upon such notice as may be required by such exchange, all as
<PAGE>
more fully provided in the Indenture. The principal of and the interest on
this Debenture shall be payable at the Corporate Trust Office of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such
address as shall appear in the Debenture Register. Notwithstanding the
foregoing, so long as the Holder of this Debenture is the Property Trustee,
the payment of the principal of and interest on this Debenture will be made
at such place and to such account as may be designated by the Property
Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness of the Company, and this Debenture
is issued subject to the provisions of the Indenture with respect thereto.
Each Holder of this Debenture, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Trustee on his or
her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each
Holder hereof, by his or her acceptance hereof, hereby waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse side hereof, this Debenture shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated:
NEVADA POWER COMPANY
By
-------------------------------------
Attest:
By
-------------------------------
Secretary
2
<PAGE>
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned
Indenture.
IBJ SCHRODER BANK & TRUST COMPANY
By:
--------------------------------
Name:
Title:
<PAGE>
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of the duly authorized Debentures of the Company
(herein sometimes referred to as the "Debentures"), all issued under and
pursuant to an Indenture dated as of __________, 1998, (the "Indenture") duly
executed and delivered between the Company and IBJ Schroder Bank & Trust
Company, as Trustee (the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Debentures.
The Company shall have the right to redeem this Debenture at the option
of the Company, without premium or penalty, in whole or in part at any time
on or after _________, 2003 (an "Optional Redemption") or at any time in
certain circumstances upon the occurrence of a Special Event, at a redemption
price equal to 100% of the principal amount plus any accrued but unpaid
interest to the date of such redemption (the "Redemption Price"). Any
redemption pursuant to this paragraph will be made upon not less than 30 nor
more than 60 days' notice at the Redemption Price. If the Debentures are
only partially redeemed by the Company pursuant to an Optional Redemption,
the Debentures will be redeemed pro rata or by lot or by any other method
utilized by the Trustee; provided that if, at the time of redemption, the
Debentures are registered as a Global Debenture, the Depositary shall
determine by lot the principal amount of such Debentures held by each Holder
to be redeemed.
In the event of redemption of this Debenture in part only, a new
Debenture for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Debentures; PROVIDED, HOWEVER, that no such supplemental indenture shall (i)
extend the fixed maturity of the Debentures, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest
thereon, without the consent of the Holder of each Debenture so affected, or
(ii) reduce the aforesaid percentage of Debentures, the Holders of which are
required to consent to any such supplemental indenture, without the consent
of the Holders of each Debenture then outstanding and affected thereby. The
Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Debentures at the time outstanding affected
thereby, on behalf of all of the Holders of the Debentures, to waive any past
default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to the
Debentures, and its consequences, except a default in the payment of the
principal of or
2
<PAGE>
interest on any of the Debentures. Any such consent or waiver by the
registered Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Debenture and of any Debenture issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Debenture at the time and place and at the rate and in the money herein
prescribed.
The Company shall have the right at any time during the term of the
Debentures from time to time to extend the interest payment period of such
Debentures to up to 20 consecutive quarters (an "Extension Period"); provided
that an Extension Period may not extend beyond the Maturity Date. At the end
of any such Extension Period, the Company shall pay all interest then accrued
and unpaid (together with interest thereon at the rate specified for the
Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extension Period, the
Company may further extend such Extension Period, provided that such
Extension Period together with all such further extensions thereof shall not
exceed 20 consecutive quarters. At the termination of any such Extension
Period and upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may commence a new Extension Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on
the Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company in the City
and State of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by
the registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be made for any such transfer, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent and any Registrar may deem and
treat the registered Holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
interest due hereon and for all other purposes, and neither the Company nor
the Trustee nor any paying agent nor any Registrar shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether
by
3
<PAGE>
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Debentures are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. This Global
Debenture is exchangeable for Debentures in definitive form only under
certain limited circumstances set forth in the Indenture. Debentures so
issued are issuable only in registered form without coupons in denominations
of $25 and any integral multiple thereof as provided in the Indenture and
subject to certain limitations herein and therein set forth. Debentures so
issued are exchangeable for a like aggregate principal amount of Debentures
of a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
4
<PAGE>
CERTIFICATE OF TRUST OF
NVP CAPITAL III
THIS Certificate of Trust of NVP CAPITAL III (the "Trust") is being
duly executed and filed by Delaware Trust Capital Management, Inc., a
Delaware banking corporation, as trustee, to form a business trust under the
Delaware Business Trust Act (12 DEL.C. Section 3801, ET SEQ.).
1. NAME. The name of the business trust formed hereby is NVP
CAPITAL III.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust in the State of Delaware is Delaware Trust Capital
Management, Inc., 900 Market Street, 2nd Floor, Wilmington, Delaware 19801,
Attn: Corporate Trust Department.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective
upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust.
DELAWARE TRUST CAPITAL
MANAGEMENT, INC., as trustee
By:
-------------------------------------------
/s/ Delaware Trust Capital Management, Inc.
<PAGE>
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of March 23, 1998 (this "Trust
Agreement"), between (i) NEVADA POWER COMPANY, a Nevada corporation (the
"Sponsor"), and (ii) DELAWARE TRUST CAPITAL MANAGEMENT, INC., a Delaware
banking corporation (the "Trustee"). The Sponsor and the Trustee hereby
agree as follows:
1. The trust created hereby (the "Trust") shall be known as
"NVP Capital III" in which name the Trustee, or the Sponsor to the extent
provided herein, may engage in the transactions contemplated hereby, make and
execute contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers conveys and sets
over to the Trustee the sum of $10. The Trustee hereby acknowledges receipt
of such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustee hereby declares that it will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 DEL. C. Section 3801, ET SEQ.
(the "Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustee is hereby authorized and directed to
execute and file a certificate of trust with the Delaware Secretary of State
in accordance with the provisions of the Business Trust Act.
3. The Sponsor and the Trustee will enter into an amended
and restated Trust Agreement, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
Statement (as defined below), to provide for the contemplated operation of
the Trust created hereby and the issuance of the Preferred Securities and
Common Securities referred to therein. Prior to the execution and delivery
of such amended and restated Trust Agreement, the Trustee shall not have any
duty or obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior
to such execution and delivery of any licenses, consents or approvals
required by applicable law or otherwise.
4. The Sponsor and the Trustee hereby authorize and direct
the Sponsor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the
registration under the Securities Act of 1933, as amended (the "1933 Act"),
of the Preferred Securities of the Trust and certain other securities, (b)
any Prospectus or Preliminary Prospectus relating to the Preferred Securities
required to be filed under the 1933 Act, and (c) a Registration Statement on
Form 8-A (the "1934 Act Registration Statement") (including all pre-effective
and post-effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under the Securities Exchange Act of 1934,
as amended; (ii) to file with the New York Stock Exchange or any other
national stock exchange or The Nasdaq National Market (each, an "Exchange")
and execute on behalf of the Trust one or more listing applications and all
other applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on any
<PAGE>
of the Exchanges; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the
securities or blue sky laws of such jurisdictions as the Sponsor, on behalf
of the Trust, may deem necessary or desirable and (iv) to execute on behalf
of the Trust that certain Underwriting Agreement relating to the Preferred
Securities, among the Trust, the Sponsor and the several Underwriters named
therein, substantially in the form included as an exhibit to the 1933 Act
Registration Statement. In connection with the filings referred to above,
the Sponsor hereby constitutes and appoints Richard L. Hinckley and Richard
C. Schmalz, Jr., and each of them, as its true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for the
Sponsor or in the Sponsor's name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to the
1933 Act Registration Statement and the 1934 Act Registration Statement and
to file the same, with all exhibits thereto, and any other documents in
connection therewith, with the Commission, the Exchange and administrators of
state securities or blue sky laws, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as the Sponsor might or could to in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their respective substitute or substitutes, shall do or cause to be
done by virtue hereof.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be one (1) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable Delaware law.
Subject to the foregoing, the Sponsor is entitled to appoint or remove
without cause any Trustee at any time. The Trustees may resign upon thirty
(30) days' prior notice to the Sponsor.
7. This Trust Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
conflict of laws of principles).
[SIGNATURE PAGE FOLLOWS]
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed as of the day and year first above written.
NEVADA POWER COMPANY, as Sponsor
By:
---------------------------------------------
/s/ Nevada Power Company
DELAWARE TRUST CAPITAL
MANAGEMENT, INC., as Trustee
By:
---------------------------------------------
/s/ Delaware Trust Capital Management, Inc.
3
<PAGE>
WSP&R
DRAFT
9/14/98
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDED AND RESTATED DECLARATION OF TRUST
NVP CAPITAL III
DATED AS OF ________, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . 7
Section 2.2 Lists of Holders of Trust Securities . . . . . . . . . . . . 7
Section 2.3 Reports by the Property Trustee. . . . . . . . . . . . . . . 8
Section 2.4 Periodic Reports to Property Trustee . . . . . . . . . . . . 8
Section 2.5 Evidence of Compliance with Conditions Precedent . . . . . . 8
Section 2.6 Events of Default; Waiver. . . . . . . . . . . . . . . . . . 8
Section 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . 9
ARTICLE III
ORGANIZATION
Section 3.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.3 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.4 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.5 Title to Property of the Trust . . . . . . . . . . . . . . . 11
Section 3.6 Powers and Duties of the Regular Trustees. . . . . . . . . . 11
Section 3.7 Prohibition of Actions by the Trust and the Trustees . . . . 13
Section 3.8 Powers and Duties of the Property Trustee. . . . . . . . . . 14
Section 3.9 Certain Duties and Responsibilities of the Property Trustee. 16
Section 3.10 Certain Rights of Property Trustee.. . . . . . . . . . . . . 18
Section 3.11 Delaware Trustee.. . . . . . . . . . . . . . . . . . . . . . 20
Section 3.12 Execution of Documents.. . . . . . . . . . . . . . . . . . . 20
Section 3.13 Not Responsible for Recitals or Issuance of Trust
Securities . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.14 Duration of Trust. . . . . . . . . . . . . . . . . . . . . . 20
Section 3.15 Mergers. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
i
<PAGE>
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities. . . . . . . . . . . 22
Section 4.2 Responsibilities of the Sponsor. . . . . . . . . . . . . . . 22
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees . . . . . . . . . . . . . . . . . . . . . 23
Section 5.2 Delaware Trustee; Eligibility. . . . . . . . . . . . . . . . 23
Section 5.3 Property Trustee; Eligibility. . . . . . . . . . . . . . . . 23
Section 5.4 Qualifications of Regular Trustees Generally . . . . . . . . 24
Section 5.5 Initial Trustees.. . . . . . . . . . . . . . . . . . . . . . 24
Section 5.6 Appointment, Removal and Resignation of Trustees . . . . . . 25
Section 5.7 Vacancies among Trustees . . . . . . . . . . . . . . . . . . 26
Section 5.8 Effect of Vacancies. . . . . . . . . . . . . . . . . . . . . 26
Section 5.9 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.10 Delegation of Power. . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions. . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VII
ISSUANCE OF TRUST SECURITIES
Section 7.1 General Provisions Regarding Trust Securities. . . . . . . . 27
ARTICLE VIII
TERMINATION
Section 8.1 Termination of Trust . . . . . . . . . . . . . . . . . . . . 29
ii
<PAGE>
ARTICLE IX
TRANSFER OF INTEREST
Section 9.1 Transfer of Trust Securities . . . . . . . . . . . . . . . . 29
Section 9.2 Transfer of Certificates . . . . . . . . . . . . . . . . . . 30
Section 9.3 Deemed Trust Security Holders. . . . . . . . . . . . . . . . 30
Section 9.4 Book-Entry Interests . . . . . . . . . . . . . . . . . . . . 30
Section 9.5 Notices to Depositary. . . . . . . . . . . . . . . . . . . . 31
Section 9.6 Appointment of Successor Depositary. . . . . . . . . . . . . 31
Section 9.7 Definitive Preferred Security Certificates . . . . . . . . . 31
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates. . . . . . 32
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS
OF TRUST SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability. . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10.2 Exculpation. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.4 Indemnification. . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.5 Outside Businesses . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.2 Certain Accounting Matters . . . . . . . . . . . . . . . . . 36
Section 11.3 Banking. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.4 Withholding. . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 12.2 Meetings of the Holders of Trust Securities; Action by
Written Consent. . . . . . . . . . . . . . . . . . . . . . . 39
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<PAGE>
ARTICLE XIII
REPRESENTATIONS AND WARRANTIES OF
PROPERTY TRUSTEE AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee . . . . . 40
Section 13.2 Representations and Warranties of Delaware Trustee . . . . . 41
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 14.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 43
Section 14.3 Intention of the Parties . . . . . . . . . . . . . . . . . . 43
Section 14.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 14.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . 43
Section 14.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . 43
Section 14.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 43
Exhibit A . . . . . . . . Terms of Trust Securities
Exhibit B . . . . . . . . Form of Preferred Securities Guarantee Agreement
Exhibit C . . . . . . . . Form of Common Securities Guarantee Agreement
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Trust Indenture
Act of 1939, as amended Section of Declaration
--------------------------- ----------------------
<S> <C>
310(a) 5.3(a)
310(b) 5.3(c)
310(c) Inapplicable
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(f) Inapplicable
315(a) 3.9(b)
315(b) 2.7
315(c) 3.9(a)
315(d) 3.9(b)
316(a) 2.6, Exhibit A 5(b) & 6(c)
316(c) 3.6(c)
317(a) 3.8(e) & 3.8(g)
317(b) 3.8(h)
318 2.1
</TABLE>
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
i
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") of NVP
Capital III (the "Trust") dated as of ________, 1998 among (a) Nevada Power
Company, a Nevada corporation, as trust sponsor (the "Sponsor"), (b) IBJ
Schroder Bank & Trust Company, a New York banking corporation, as property
trustee (the "Property Trustee"), (c) Delaware Trust Capital Management, Inc., a
Delaware banking association, as Delaware trustee (the "Delaware Trustee"), (d)
Richard L. Hinckley and Richard C. Schmalz, individuals whose address is c/o
Nevada Power Company, 6226 West Sahara Avenue, Las Vegas, Nevada 89146 (each, a
"Regular Trustee" and, together with the Property Trustee and the Delaware
Trustee, the "Trustees") and (e) the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration.
WHEREAS, the Delaware Trustee and the Sponsor established the Trust under
the Business Trust Act (as hereinafter defined) pursuant to a Declaration of
Trust dated as of March 23, 1998, (the "Original Declaration") and a Certificate
of Trust filed with the Secretary of State of the State of Delaware on March 23,
1998, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in the Subordinated Debentures (as hereinafter
defined);
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 DEFINITIONS
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE>
(c) all references to "this Declaration" are to this Declaration as
modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of, and Exhibits to, this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person and, with respect to the Sponsor, the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Treasurer,
any assistant Treasurer, or other officer or agent of the Sponsor duly
authorized by the board of directors of the Sponsor to act in respect of matters
relating to this Declaration.
"Book-Entry Interests" mean beneficial interests in a Global Certificate,
ownership and transfers of which shall be maintained and made through
book-entries by the Depositary as described in Section 9.4.
"Business Day" means any day other than a day on which banking institutions
in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 ET SEQ., as it may be amended from time to time.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Closing Date" means _______, 1998.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement of the Sponsor
dated as of _________, 1998 in respect of the Common Securities in the form of
Exhibit C.
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<PAGE>
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex II to Exhibit A.
"Corporate Trust Office" means the principal office of the Property Trustee
at which at any particular time its corporate trust business shall be
administered which office at the date of execution of this Declaration is
located at One State Street, New York, New York 10004, Attention: Corporate
Trust Department.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Trust Securities.
"Delaware Trustee" has the meaning set forth in the preamble hereof and any
successor trustee meeting the eligibility requirements set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Depositary" means an organization registered as a clearing agency pursuant
to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book-entry transfers and pledges of Book-Entry Interests.
"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book-entry transfers and pledges of securities deposited with the Depositary.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Trust Securities
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, New York, New York, the initial
Depositary.
"Exchange Act" means the Securities Exchange Act of 1934, as the same may
be amended from time to time, or any successor legislation.
"Event of Default," in respect of the Trust Securities, means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Subordinated Debentures.
"Global Certificate" has the meaning specified in Section 9.4.
3
<PAGE>
"Guarantee Trustee" means IBJ Schroder Bank & Trust Company, as trustee
under the Preferred Securities Guarantee, until a successor is appointed
thereunder and thereafter means such successor trustee.
"Holder" means a Person in whose name a Certificate representing a Trust
Security is registered on the books and records of the Trust, such Person being
a beneficial owner within the meaning of the Business Trust Act, PROVIDED, THAT,
in determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Sponsor, as guarantor of the Trust Securities, or any
Affiliate of the Sponsor.
"Indemnified Person" means (a) any Trustee or the Property Trustee; (b) any
Affiliate of any Trustee or the Property Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Trustee or the Property Trustee; or (d) any employee or agent of the Trust or
its Affiliates.
"Indenture" means the Indenture dated as of _________, 1998 among the
Sponsor and the Indenture Trustee as modified, supplemented or amended from time
to time.
"Indenture Trustee" means IBJ Schroder Bank & Trust Company, as trustee
under the Indenture, until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as the
same may be amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(e).
"Majority in liquidation amount" means, except as provided in the terms of
the Trust Securities and the Trust Indenture Act, Holders of outstanding Trust
Securities voting together as a single class or, as the context may require,
Holders of outstanding Preferred Securities or Holders of outstanding Common
Securities voting separately as a class, representing more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Trust Securities of the relevant class.
"Maturity Date" has the meaning set forth in Section 101 of the Indenture.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by an Authorized Officer of such Person. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that such officer signing the Certificate has read
the covenant or condition and the definition relating thereto;
4
<PAGE>
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" or "opinion of counsel" means a written opinion of
counsel who may be counsel of the Trustee, the Property Trustee, or the Sponsor,
and who shall be reasonably acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement between the
Sponsor and the Guarantee Trustee dated as of _________, 1998, in respect of the
Preferred Securities in the form of Exhibit B.
"Preferred Securities" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry Interest, as
reflected on the books of the Depositary, or on the books of a Person
maintaining an account with such Depositary (directly as a Depositary
Participant or as an indirect participant, in each case in accordance with the
rules of such Depositary).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Annex I to Exhibit A.
"Property Trustee" has the meaning set forth in the preamble hereof or any
successor trustee meeting the eligibility requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Prospectus" means that certain prospectus dated _________, 1998 relating
to the Preferred Securities.
5
<PAGE>
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in the preamble hereof, or any
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer or any other officer in the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Declaration and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities Act" means the Securities Act of 1933, as the same may be
amended from time to time, or any successor legislation.
"66-2/3% in liquidation amount" means, except as provided in the terms of
the Trust Securities and by the Trust Indenture Act, Holders of outstanding
Trust Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities voting separately as a class, representing at least 66-2/3% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Trust Securities of the relevant class.
"Sponsor" has the meaning set forth in the preamble hereof or any successor
entity in a merger, consolidation or amalgamation.
"Subordinated Debentures" means $72,164,950 aggregate principal amount of
___% Junior Subordinated Deferrable Interest Debentures due 2038 to be issued by
the Sponsor under the Indenture and to be held by the Property Trustee for the
benefit of the Trust.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Securities" has the meaning set forth in Section 3.15(b).
"10% in liquidation amount" means, except as provided in the terms of the
Trust Securities or by the Trust Indenture Act, Holders of outstanding Trust
Securities voting together as a single class or, as the context may require,
Holders of outstanding Preferred Securities or Holders of outstanding Common
Securities, voting separately as a class, representing at least 10% of the
aggregate liquidation amount (including the stated amount that would be paid on
6
<PAGE>
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Trust Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" has the meaning set forth in the preamble hereof,
so long as such person shall continue in office in accordance with the terms
hereof, and all other Persons who may from time to time be duly appointed,
qualified and serving as Trustees in accordance with the provisions hereof, and
references herein to a Trustee or the Trustees shall refer to such Person or
Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as the same
may be amended from time to time, or any successor legislation.
"Trust Securities" means collectively the Common Securities and the
Preferred Securities.
"Underwriting Agreement" means the underwriting agreement for the offering
and sale of the Preferred Securities by the underwriters named therein.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a Trustee
for purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such duties imposed by
the Trust Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets
of the Trust.
(e) The Regular Trustee executing the certificate under Section
3.6(h) shall be deemed the principal executive officer and chief
financial officer of the Trust for purposes of the Trust Indenture
Act.
7
<PAGE>
Section 2.2 LISTS OF HOLDERS OF TRUST SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of
the Holders of the Trust Securities ("List of Holders") as of such
record date, PROVIDED THAT none of the Sponsor or the Regular Trustees
on behalf of the Trust shall be obligated to provide such list of
Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Property Trustee by the Sponsor
and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for
a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee. The Property Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity)
PROVIDED THAT the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with the obligations of an
indenture trustee under Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
Section 2.3 REPORTS BY THE PROPERTY TRUSTEE. Within 60 days after
December 31 of each year, the Property Trustee shall provide to the Holders of
the Preferred Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE. Each of the Sponsor
and the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 (if
any) of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each of
the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Declaration that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by officers of the Sponsor and the Regular Trustee pursuant
to Section 314(c)(1) of the Trust Indenture Act may be given in the form of an
Officer's Certificate.
Section 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past
8
<PAGE>
Event of Default with respect to the Preferred Securities and its
consequences, PROVIDED THAT, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of all of the holders of the
Subordinated Debentures to be waived under the Indenture, the Event of
Default under this Declaration may only be waived by the vote of all
of the Holders of the Preferred Securities.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities
of an Event of Default with respect to the Preferred Securities shall also
be deemed to constitute a waiver by the Holders of the Common Securities of
any such Event of Default with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or consent of
the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, PROVIDED THAT, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such
Event of Default under this Declaration as provided below in this
Section 2.6(b), the Event of Default under this Declaration shall
also not be waivable; or
(ii) requires the consent or vote of all of the holders of the
Subordinated Debentures to be waived, except where the Holders of
the Common Securities are deemed to have waived such Event of
Default under this Declaration as provided below in this Section
2.6(b), the Event of Default under this Declaration may only be
waived by the vote of all of the Holders of Common Securities;
PROVIDED THAT, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until all Events
of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, and until such Events of Default have
been so cured, waived or otherwise eliminated, the Property Trustee
will be deemed to be acting solely on behalf of the Holders of the
Preferred Securities, and only the Holders of the Preferred Securities
will have
9
<PAGE>
the right to direct the Property Trustee in accordance with the terms
of the Trust Securities. Subject to the foregoing provisions of this
Section 2.6(b), upon such waiver, any such default shall cease to
exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every
purpose of this Declaration but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the
Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration.
Section 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid,
to the Holders of the Trust Securities, notices of all defaults with
respect to the Trust Securities known to the Property Trustee, unless
such defaults have been cured before the giving of such notice (the
term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and irrespective
of the giving of any notice provided therein); PROVIDED THAT, except
for a default in the payment of principal of or interest on any of the
Subordinated Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as Responsible Officers of the
Property Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders of the Trust Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 401(l) and 401(2) of the Indenture;
or
(ii) any default as to which a Responsible Officer of the
Property Trustee charged with the administration of this
Declaration shall have obtained written or actual notice.
ARTICLE III
ORGANIZATION
Section 3.1 NAME. The Trust is named "NVP Capital III", as such
name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Trust Securities. The Trust's activities
may be conducted under the name of the Trust or any other name deemed
advisable by the Regular Trustees.
10
<PAGE>
Section 3.2 OFFICE. The address of the principal office of the
Trust is c/o Nevada Power Company, 6226 West Sahara Avenue, Las Vegas, Nevada
89102. On ten Business Days written notice to the Holders of Trust
Securities, the Regular Trustees may designate another principal office.
Section 3.3 PURPOSE. The exclusive purposes and functions of the
Trust are (a) to issue and sell Trust Securities and use the proceeds from
such sale to acquire the Subordinated Debentures and (b) except as otherwise
limited herein, to engage in only those other activities necessary or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the
Trust not to be classified for United States federal income tax purposes as a
grantor trust. All provisions of this Declaration shall be interpreted in a
manner consistent with such purposes.
Section 3.4 AUTHORITY. Subject to the limitations provided in
this Declaration, including the provisions of Sections 3.11, 5.2 and 8.1(b),
and to the specific duties of the Property Trustee, the Regular Trustees
shall have exclusive and complete authority to carry out the purposes of the
Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee in accordance with its powers shall constitute
the act of and serve to bind the Trust. In dealing with the Regular Trustees
acting on behalf of the Trust, no Person shall be required to inquire into
the authority of the Regular Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority
of the Trustees as set forth in this Declaration.
Section 3.5 TITLE TO PROPERTY OF THE TRUST. Except as provided in
Section 3.8 with respect to the Subordinated Debentures and the Property
Trustee Account or as otherwise provided in this Declaration, legal title to
all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
Section 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES. The Regular
Trustees shall have the exclusive power, duty and authority to cause the
Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; PROVIDED, HOWEVER,
that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
PROVIDED FURTHER, that there shall be no interests in the Trust other
than the Trust Securities, and the issuance of Trust Securities shall
be limited to the simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date;
(b) to acquire the Subordinated Debentures with the proceeds of the
sale of the Trust Securities; PROVIDED, HOWEVER, that the Regular
Trustees shall cause legal title to the Subordinated Debentures to be
held of record in the name of the Property Trustee for the benefit of
the Holders of the Trust Securities;
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(c) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including
and with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders of Trust
Securities as to such actions and applicable record dates;
(d) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Trust Securities;
(e) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against
the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Property Trustee has the exclusive power to bring such Legal Action;
(f) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(g) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(h) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be
executed by a Regular Trustee;
(i) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(j) to act as, or appoint another Person to act as, registrar and
transfer agent for the Trust Securities;
(k) to give prompt written notice to the Holders of the Trust
Securities and the Property Trustee of any notice received from the
Sponsor of its election (i) to defer payments of interest on the
Subordinated Debentures by extending the interest payment period under
the Indenture or (ii) to extend the scheduled maturity date on the
Subordinated Debentures pursuant to the Indenture;
(l) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(m) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under
the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of
the Holders of the Trust Securities or to enable the Trust to effect
the purposes for which the Trust was created;
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(n) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities
of the Trust as set out in this Section 3.6, including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the
Subordinated Debentures will be treated as indebtedness of the
Sponsor for United States federal income tax purposes,
PROVIDED THAT such action does not adversely affect the interests
of Holders or vary the terms of the Preferred Securities; and
(o) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on
behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the
Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.8.
Section 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES
(a) The Trust shall not, and the Trustees and the Property Trustee
shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the
Trustees and the Property Trustee shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Subordinated Debentures, but shall distribute all such proceeds
to Holders of Trust Securities pursuant to the terms of this
Declaration and of the Trust Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Debentures;
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(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Trust Securities in any
way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Trust Securities; or
(vii) other than as provided in this Declaration or as set forth
in Exhibit A hereto, (A) direct the time, method and place of
exercising any trust or power conferred upon the Indenture
Trustee with respect to the Subordinated Debentures, (B) waive
any past default that is waivable under Section 413 of the
Indenture, (C) exercise any right to rescind or annul any
declaration that the principal of all the Subordinated Debentures
shall be due and payable or (D) consent to any amendment,
modification, waiver or termination of the Indenture or the
Subordinated Debentures where such consent shall be required
unless the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax
purposes the Trust will not be classified as a grantor trust.
Section 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Subordinated Debentures shall be owned by
and held of record in the name of the Property Trustee in trust for
the benefit of the Holders of the Trust Securities. The right, title
and interest of the Property Trustee to the Subordinated Debentures
shall vest automatically in each Person who may hereafter be appointed
as Property Trustee in accordance with Section 5.6. Such vesting and
cessation of title shall be effective whether or not conveyancing
documents with regard to the Subordinated Debentures have been
executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Debentures to the Regular Trustees or to
the Delaware Trustee (if the Property Trustee does not also act as
Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and
under the exclusive control of the Property Trustee on behalf of
the Holders of the Trust Securities and, upon the receipt of
payments of funds made in respect of the Subordinated Debentures
held by the Property Trustee, deposit such funds into the
Property Trustee Account and make Distributions to the Holders of
the Trust Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Trustee Account shall be an
account that is maintained with the Property Trustee or with a
banking institution the rating on whose long term unsecured
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indebtedness is at least equal to the rating assigned to the
Preferred Securities by a "nationally recognized statistical
rating organization", as that term is defined for purposes of
Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust
Securities to the extent the Subordinated Debentures are redeemed
or mature; and
(iii) upon receipt of notice of distribution issued by the
Regular Trustees in accordance with the terms of the Trust
Securities, engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the
Subordinated Debentures to Holders of Trust Securities upon the
occurrence of certain special events (as may be defined in the
terms of the Trust Securities) arising from a change in law or a
change in legal interpretation or other specified circumstances
pursuant to the terms of the Trust Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee
pursuant to the terms of the Trust Securities.
(e) The Property Trustee shall take any Legal Action that arises out
of or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture
Act.
(f) The Property Trustee shall not resign as a trustee unless either:
(i) the Trust has been completely liquidated and the proceeds
of such liquidation have been distributed to the Holders of Trust
Securities pursuant to the terms of the Trust Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Subordinated
Debentures under the Indenture and, if an Event of Default occurs and
is continuing, the Property Trustee shall, for the benefit of Holders
of the Trust Securities, enforce its rights as holder of the
Subordinated Debentures subject to the rights of the Holders pursuant
to the terms of such Trust Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Trust
Securities and any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. The Property Trustee may remove any
Paying Agent at any time and a successor Paying Agent or additional
Paying Agents may be appointed at any time by the Property Trustee.
The Property Trustee will be the initial Paying Agent.
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(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the
Trust set out in Section 3.3 and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
Section 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY
TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Property Trustee shall exercise
such of the rights and powers vested in it by this Declaration, and
use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of
this Declaration, and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Property
Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively
rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall
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be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Trust Securities at the
time outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon
the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under
the terms of this Declaration or adequate indemnity against such
risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the
Subordinated Debentures and the Property Trustee Account shall be
to deal with such property in a similar manner as the Property
Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust Indenture
Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or
sufficiency of the Subordinated Debentures or the payment of any
taxes or assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with
the Sponsor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor
with their respective duties under this Declaration, nor shall
the Property Trustee be liable for the default or misconduct of
the Regular Trustees or the Sponsor.
Section 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
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(i) the Property Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officer's Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) shall be entitled, in the absence of bad
faith on its part, to request and rely upon an Officer's
Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax
or securities laws) (or any re-recording, refiling or
registration thereof);
(v) the Property Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include
any of its employees. The Property Trustee shall have the right
at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless
such Holder shall have provided to the Property Trustee security
and indemnity, acceptable to the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may
be requested by the Property Trustee provided that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve
the Property Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers vested in it
by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, Officer's Certificate,
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statement, instrument, opinion, Opinion of Counsel, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or
document, but the Property Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it
hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Trust
Securities, and the signature of the Property Trustee or its
agents alone shall be sufficient and effective to perform any
such action and no third party shall be required to inquire as to
the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder the Property Trustee (i) may request
instructions from the Holders of the Trust Securities which
instructions may only be given by the Holders of the same
proportion in liquidation amount of the Trust Securities as would
be entitled to direct the Property Trustee under the terms of the
Trust Securities in respect of such remedy, right or action, (ii)
may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii)
shall be protected in acting in accordance with such
instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration.
No provision of this Declaration shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or, authority available to the Property
Trustee shall be construed to be a duty.
Section 3.11 DELAWARE TRUSTEE. Notwithstanding any other provision
of this Declaration other than Sections 5.2 and 8.1(b), the Delaware Trustee
shall not be entitled to exercise any powers nor shall the Delaware Trustee
have any of the duties and responsibilities of
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the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Sections 5.2 and 8.1(b), the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act. The Delaware Trustee shall be
entitled to the benefit of all of the immunities and indemnities that the
Property Trustee is entitled to under this Declaration.
Section 3.12 EXECUTION OF DOCUMENTS. Unless otherwise determined by
the Regular Trustees, and except as otherwise required by the Business Trust
Act, a majority of or, if there are only two, both of the Regular Trustees
are authorized to execute on behalf of the Trust any documents that the
Regular Trustees have the power and authority to execute pursuant to Section
3.6; provided that, any listing application prepared by the Sponsor referred
to in Section 4.2(c) may be executed by one Regular Trustee.
Section 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF TRUST
SECURITIES. The recitals contained in this Declaration and the Trust
Securities shall be taken as the statements of the Sponsor and the Trustees
do not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or
any part thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration or the Trust Securities.
Section 3.14 DURATION OF TRUST. The Trust, unless terminated
pursuant to the provisions of Article VIII hereof, shall exist until December
31, 2053.
Section 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except
as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the Holders of the Trust
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as
such under the laws of any State; PROVIDED THAT:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Trust Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the
Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and maturity;
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(ii) the Sponsor expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Property Trustee as the Holder of the Subordinated Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange,
the Nasdaq Stock Market's National Market or other organization
on which the Preferred Securities are then listed;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges
of the Holders of the Trust Securities (including any Successor
Securities) in any material respect;
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the Trust
Securities (including any Successor Securities) in any
material respect; and
(B) following such merger, consolidation, amalgamation
or replacement, neither the Trust nor the Successor
Entity will be required to register as an Investment
Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall, except with the
consent of Holders of 100% in liquidation amount of the Trust
Securities, not consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the
Trust or Successor Entity not to be classified for United States
federal income tax purposes as a grantor trust.
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ARTICLE IV
SPONSOR
Section 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES. On the Closing
Date, the Sponsor will purchase all the Common Securities issued by the
Trust, in an amount equal to 3% of the capital of the Trust, at the same time
as the Preferred Securities are sold.
Section 4.2 RESPONSIBILITIES OF THE SPONSOR. In connection with the
issuance and sale of the Preferred Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:
(a) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on
Form S-3 in relation to the Preferred Securities and the Subordinated
Debentures, including any amendments thereto;
(b) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by the Trust, and the advice to the Trust
of actions it must take, and the preparation for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable
laws of any such states;
(c) the preparation and filing by the Trust and the execution on
behalf of the Trust of an application to the New York Stock Exchange
or any other national stock exchange or the Nasdaq Stock Market's
National Market for listing upon notice of issuance of the Preferred
Securities;
(d) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Preferred Securities
under Section 12(b) or 12(g) of the Exchange Act, including any
amendments thereto;
(e) the negotiation of the terms of, and the execution and delivery
of, the Underwriting Agreement providing for the sale of the Preferred
Securities; and
(e) the taking of any other action necessary and desirable to carry
out the foregoing activities.
ARTICLE V
TRUSTEES
Section 5.1 NUMBER OF TRUSTEES. The number of Trustees shall
initially be four (4), and:
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(a) at any time before the issuance of any Trust Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities, provided
that in any case, the number of Trustees shall be at least four (4)
unless the Trustee that acts as the Property Trustee also acts as the
Delaware Trustee pursuant to Section 5.2, in which case the number of
Trustees shall be at least three (3).
Section 5.2 DELAWARE TRUSTEE; ELIGIBILITY. If required by the
Business Trust Act, one Trustee shall be:
(a) a natural person who is at least 21 years of age and a resident
of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the
requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. Except as otherwise provided, the Delaware Trustee's
sole duty shall be to, upon the request of the other Trustees or the Sponsor,
execute any documents and maintain custody of any records required to form,
maintain the existence of, or dissolve, the Trust under the Business Trust Act.
Section 5.3 PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, state,
Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of
this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
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(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i)
of the first provision contained in Section 310(b) of the Trust
Indenture Act.
Section 5.4 QUALIFICATIONS OF REGULAR TRUSTEES GENERALLY. Each
Regular Trustee shall be a natural person who is at least 21 years of age and
shall be an employee or officer of the Sponsor or otherwise be affiliated with
the Sponsor.
Section 5.5 INITIAL TRUSTEES. The initial Regular Trustees shall
be:
Richard L. Hinckley
6226 West Sahara Avenue
Las Vegas, Nevada 89146
Richard C. Schmalz
6226 West Sahara Avenue
Las Vegas, Nevada 89146
The initial Delaware Trustee shall be:
Delaware Trust Capital Management, Inc.
900 Market Street, Second Floor
Wilmington, Delaware 19801
The initial Property Trustee shall be:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust Department
Section 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any securities, by written
instrument executed by the Sponsor;
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(ii) after the issuance of any Trust Securities, except as
provided in clause (iii) hereof, by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities; and
(iii) after the issuance of any Trust Securities, if an Event
of Default has occurred and is continuing, with respect only to
the Property Trustee or the Delaware Trustee, by vote of the
Holders of a Majority in liquidation amount of the Preferred
Securities voting as a class at a meeting of the Holders of the
Preferred Securities.
b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a successor
Property Trustee possessing the qualifications to act as Property
Trustee under Section 5.3 has been appointed and has accepted
such appointment by written instrument executed by such successor
Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee
under Section 5.2 has been appointed and has accepted such
appointment by written instrument executed by such successor
Delaware Trustee and delivered to the Regular Trustees and the
Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for
prior or subsequent accounting) by any instrument in writing signed by
the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later
date as is specified therein; PROVIDED, HOWEVER, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such successor Property Trustee and delivered
to the Trust, the Sponsor and the resigning Property
Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the
Holders of the Trust Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such successor
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Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a successor Delaware Trustee or successor Property
Trustee, as the case may be, as the Property Trustee or the Delaware
Trustee if the resigning Property Trustee or Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.6.
(e) If no successor Property Trustee or successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust
of an instrument of resignation, the resigning Property Trustee or
Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a successor Property Trustee or
successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
successor Property Trustee or successor Delaware Trustee, as the case
may be.
Section 5.7 VACANCIES AMONG TRUSTEES. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
a majority of the Regular Trustees shall be conclusive evidence of the existence
of such vacancy and copies of any such resolution shall be distributed promptly
to the remaining Trustees. The vacancy shall be filled with a Trustee appointed
in accordance with Section 5.6.
Section 5.8 EFFECT OF VACANCIES. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to annul the Trust. Whenever
a vacancy in the number of Regular Trustees shall occur, until such vacancy is
filled by the appointment of a Regular Trustee in accordance with Section 5.6,
the Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
Section 5.9 MEETINGS. Meetings of the Regular Trustees shall be
held from time to time upon the call of any Regular Trustee. Regular meetings
of the Regular Trustees may be held at a time and place fixed by resolution of
the Regular Trustees. Notice of any in-person meetings of the Regular Trustees
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours before
such meeting. Notice of any telephonic meetings of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the
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Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
Section 5.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of
21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name
of the Trust or the names of the Regular Trustees or otherwise as the
Regular Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 DISTRIBUTIONS. Holders shall receive Distributions in
accordance with the applicable terms of Exhibit A hereto and the applicable
terms of the relevant Holder's Trust Securities. Distributions shall be made on
the Preferred Securities and the Common Securities in accordance with the
preferences set forth in their respective terms. If and to the extent that the
Sponsor makes a payment of interest (including Deferred Interest (as defined in
the Indenture)), and principal on the Subordinated Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders.
ARTICLE VII
ISSUANCE OF TRUST SECURITIES
Section 7.1 GENERAL PROVISIONS REGARDING TRUST SECURITIES.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit
A and incorporated herein by reference (the "Preferred Securities")
and one class of common securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set
forth in Exhibit A and incorporated herein by reference (the "Common
Securities"). The Trust shall have no securities or other interests
in the assets of the Trust other than the Preferred Securities and the
Common Securities.
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(b) The Regular Trustees (or if there are more than two Regular
Trustees by any two of the Regular Trustees) shall sign the
Certificates on behalf of the Trust. Such signatures may be the
manual or facsimile signatures of the present or any future Regular
Trustee. Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the validity of
any Certificate. In case any Regular Trustee of the Trust who shall
have signed any of the Trust Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the
person who signed such Certificates had not ceased to be such Regular
Trustee; and any Certificate may be signed on behalf of the Trust by
such persons who, at the actual date of execution of such Trust
Security, shall be the Regular Trustees of the Trust, although at the
date of the execution and delivery of this Declaration any such person
was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks
or identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to
comply with any law or with any rule or regulation of any stock
exchange on which Trust Securities may be listed, or to conform to
usage.
(c) The consideration shall be received by the Property Trustee for
the issuance of the Trust Securities, which consideration shall
constitute a contribution to the capital of the Trust and shall not
constitute a loan to the Trust.
(d) The Holders shall not have any right or title in the assets of
the Trust other than an undivided beneficial interest in such assets
conferred by their Trust Securities, and they shall have no right to
call for any partition or division of any property, profits or rights
of the Trust except as otherwise provided herein. The Trust
Securities shall be personal property giving only the rights
specifically set forth therein and in this Declaration. The Trust
Securities, when issued and delivered against payment of purchase
price therefor, shall be deemed to be validly issued, fully paid and
non-assessable by the Trust.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration.
ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION OF TRUST.
(a) The Trust shall terminate on the earlier of December 31, 2053 or:
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(i) upon (x) the filing of a bankruptcy petition pursuant to
11 U.S.C. Sections 101 ET. SEQ. or similar petition arising under
the laws of any other jurisdiction by the Holder of the Common
Securities or the Sponsor or (y) the insolvency of the Holder of
the Common Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or
the Sponsor; the filing of a certificate of cancellation with
respect to the Trust or the revocation of the Holder of the
Common Securities or the Sponsor's charter and the expiration of
90 days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called
for redemption and the amounts necessary for redemption thereof
shall have been paid to the Holders in accordance with the terms
of the Trust Securities; and
(v) upon delivery of written direction to the Property
Trustee by the Sponsor at any time (which direction is wholly
optional and within the discretion of the Sponsor) to dissolve
the Trust and distribute the Subordinated Debentures to the
Holders of the Trust Securities in accordance with Section 3 of
Exhibit A.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Delaware Trustee shall file a
certificate of cancellation with the Secretary of State of the State
of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTEREST
Section 9.1 TRANSFER OF TRUST SECURITIES.
(a) Trust Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration
and in the terms of the Trust Securities. Any transfer or purported
transfer of any Trust Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of
the Sponsor; PROVIDED THAT, any such transfer is subject to the
conditions precedent that the
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transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
Section 9.2 TRANSFER OF CERTIFICATES. The Regular Trustees shall
provide for the registration of transfers of Certificates, which will be
effected without charge, but only upon payment (with such indemnity as the
Regular Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for
registration of transfer of any Certificate, the Regular Trustees shall cause
one or more new Certificates to be issued in the name of the designated
transferee or transferees. Every Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Regular Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Certificate surrendered
for registration of transfer shall be canceled by the Regular Trustees. A
transferee of a Certificate shall be entitled to the rights and subject to
the obligations of a Holder hereunder upon the receipt by such transferee of
a Certificate. By acceptance of a Certificate, each transferee shall be
deemed to have agreed to be bound by this Declaration and the documents
incorporated by reference herein.
Section 9.3 DEEMED TRUST SECURITY HOLDERS. The Trustees may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the Trust
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Trust Securities represented by such Certificate on the
part of any Person, whether or not the Trust shall have actual or other
notice thereof.
Section 9.4 BOOK-ENTRY INTERESTS. Unless otherwise specified in
the terms of the Preferred Securities, the Preferred Securities Certificates,
on original issuance, will be issued in the form of one or more fully
registered global Preferred Security Certificates (each, a "Global
Certificate"), to be delivered to DTC, the initial Depositary, or its
custodian, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner
will receive a Definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global Certificates,
except as provided in Section 9.7. Unless and until definitive, fully
registered Preferred Security Certificates (the "Definitive Preferred
Security Certificates") have been issued to the Preferred Security Beneficial
Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
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(b) the Trust and the Trustees shall be entitled to deal with the
Depositary for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals,
votes or consents hereunder) as the Holder of the Preferred Securities
and the sole holder of the Global Certificates and shall have no
obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Depositary and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Depositary and/or the Depositary
Participants. DTC will make book-entry transfers among the Depositary
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Depositary Participants.
Section 9.5 NOTICES TO DEPOSITARY. Whenever a notice or other
communication to the Preferred Security Holder is required under this
Declaration, unless and until Definitive Preferred Security Certificates
shall have been issued to the Preferred Security Beneficial Owners pursuant
to Section 9.7, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Preferred Security Holders
to the Depositary, and shall have no notice obligations to the Preferred
Security Beneficial Owners.
Section 9.6 APPOINTMENT OF SUCCESSOR DEPOSITARY. If any Depositary
elects to discontinue its services as securities depositary with respect to
the Preferred Securities, the Regular Trustees may, in their sole discretion,
appoint a successor Depositary with respect to such Preferred Securities.
Section 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES. If:
(a) a Depositary elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor
Depositary is not appointed within 90 days after such discontinuance
pursuant to Section 9.6;
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book-entry system through the Depositary with respect to
the Preferred Securities; or
(c) an Event of Default has occurred and a Majority in liquidation
amount of the Preferred Securities determined to discontinue the
book-entry system through the Depositary with respect to the
Preferred Securities.
then:
(d) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
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(e) upon surrender of the Global Certificates by the Depositary,
accompanied by registration instructions, the Regular Trustees shall
cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the
instructions of the Depositary. Neither the Trustees nor the Trust
shall be liable for any delay in delivery of such instructions and
each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Depositary. The Definitive
Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Preferred
Securities may be listed, or to conform to usage.
Section 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless,
then in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any two Regular Trustees on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Trust Securities, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS
OF TRUST SECURITIES, TRUSTEES OR OTHERS
Section 10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee and the terms of
the Trust Securities, the Sponsor shall not be:
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(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of
the Trust Securities which shall be made solely from assets of
the Trust; and
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or
otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act:
(i) the Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with
respect to the Trust Securities) to the extent not satisfied out
of the Trust's assets; and
(ii) the Holders of the Preferred Securities shall be entitled
to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware.
Section 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Declaration or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or,
in the case of the Property Trustee, negligence) or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person
as to matters the Indemnified Person reasonably believes are within
such other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Trust Securities might properly be paid.
Section 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust
or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration,
to the
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extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other
than the duties imposed on the Property Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such
other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any Holder of Trust
Securities,
the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case
the relative interest of each party (including its own interest)
to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or
accepted industry practices, and any applicable generally
accepted accounting practices or principles. In the absence of
bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by this Indemnified Person shall
not constitute a breach of this Declaration or any other
agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider
such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Trust
or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed
by this Declaration or by applicable law.
Section 10.4 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage, liability, tax, penalty, expense or claim of
any kind or nature whatsoever incurred by such Indemnified Person by
reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority
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conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by
reason of gross negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Sponsor prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the
Sponsor of an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified as authorized in Section
10.4(a). The indemnification shall survive the termination of this
Declaration or the earlier removal or resignation of any of the
Trustees or the Property Trustee.
Section 10.5 OUTSIDE BUSINESSES. Any Covered Person, the Sponsor,
the Delaware Trustee and the Property Trustee may engage in or possess an
interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders of Trust Securities shall have no rights
by virtue of this Declaration in and to such independent ventures or the
income or profits derived therefrom and the pursuit of any such venture, even
if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee or the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character
that, if presented to the Trust, could be taken by the Trust, and any Covered
Person, the Sponsor, the Delaware Trustee and the Property Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction
with the Sponsor or any Affiliate of the Sponsor, or may act as depositary
for, trustee or agent for, or act on any committee or body of holders of,
securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 FISCAL YEAR. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the
Code.
Section 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable
detail, each transaction of the Trust. The books of account shall be
maintained on the accrual method of accounting, in accordance with
generally accepted accounting principles, consistently applied.
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The Trust shall use the accrual method of accounting for United
States federal income tax purposes. The books of account and the
records of the Trust shall be examined by and reported upon as of
the end of each Fiscal Year by a firm of independent certified
public accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Trust Securities, within 90 days after the end
of each Fiscal Year of the Trust, annual financial statements of the
Trust, including a balance sheet of the Trust as of the end of such
Fiscal Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Trust Securities any United States
federal income tax information statement required by the Code,
containing such information with regard to the Trust Securities held
by each Holder as is required by the Code and the Treasury
Regulations, and any comparable statements required to be provided
under the law of any other taxing jurisdiction. Notwithstanding any
right under the Code or other law to deliver any such statement at a
later date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority an annual United States federal
income tax return Form 1041 or such other form required by United
States federal income tax law, and any other tax returns or reports
required to be filed by the Regular Trustees on behalf of the Trust
with any state or local taxing authority.
Section 11.3 BANKING. The Trust shall maintain one or
more bank accounts in the name and for the sole benefit of the
Trust; PROVIDED, HOWEVER, that all payments of funds in respect of
the Subordinated Debentures held by the Property Trustee shall be
made directly to the Property Trustee Account and no other funds of
the Trust shall be deposited in the Property Trustee Account. The
sole signatories for such accounts shall be designated by the
Regular Trustees; PROVIDED, HOWEVER, that the Property Trustee
shall designate the sole signatories for the Property Trustee
Account.
Section 11.4 WITHHOLDING. The Trust and the Regular
Trustees shall comply with all withholding requirements under
United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations
and forms as shall reasonably be requested by the Trust to assist
it in determining the extent of, and in fulfilling, its withholding
obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding
is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any
amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to
be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the
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amount required to be withheld was not withheld from actual Distributions
made to any Holder, the Trust may reduce subsequent Distributions to such
Holder by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Trust Securities, this Declaration may only be
amended by a written instrument approved and executed by the Regular
Trustees (or, if there are more than two Regular Trustees a majority
of the Regular Trustees); PROVIDED, HOWEVER, that:
(i) in the case of any proposed amendment, the Property
Trustee shall have first received an Officer's Certificate from
each of the Regular Trustees on behalf of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Trust
Securities);
(ii) in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property
Trustee, the Property Trustee shall have first received:
(A) an Officer's Certificate from each of the Regular
Trustees on behalf of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Trust
Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted
by, and conforms to, the terms of this Declaration
(including the terms of the Trust Securities);
(iii) no amendment shall be made, and any such purported
amendment shall be void and ineffective, to the extent the result
of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust and each Holder of the Trust
Securities not to be treated as owning an undivided
beneficial interest in the Subordinated Debentures, as
evidenced by an Opinion of Counsel to the effect that
such amendment shall not result in the foregoing;
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(B) reduce or otherwise adversely affect the powers of
the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(iv) at such time after the Trust has issued any Trust
Securities that remain outstanding, any amendment that would
adversely affect the rights, privileges or preferences of any
Holder of the Trust Securities may be effected only with such
additional requirements as may be set forth in the terms of such
Trust Securities;
(v) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Trust
Securities;
(vi) Article IV shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Common
Securities; and
(vii) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and
remove Trustees shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common
Securities.
(b) Notwithstanding Section 12.1(a)(iii), this Declaration may be
amended without the consent of the Holders of the Trust Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of
this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) conform to any change in Rule 3a-5 or other exemption
from the requirement to register as an Investment Company under
the Investment Company Act or written change in the
interpretation or application thereof by any legislative body,
court, government agency or regulatory authority which amendment
does not have a material adverse effect on the rights,
preferences or privileges of the Holders.
(c) Notwithstanding any other provision of this Declaration, neither
the Property Trustee nor the Delaware Trustee shall be required to
enter into any amendment to this Declaration which affects its own
rights, duties or immunities under this Declaration:
Section 12.2 MEETINGS OF THE HOLDERS OF TRUST SECURITIES; ACTION BY
WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Trust Securities may be
called at any
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time by the Regular Trustees (or as provided in the terms of the
Trust Securities) to consider and act on any matter on which
Holders of such class of Trust Securities are entitled to act under
the terms of this Declaration, the terms of the Trust Securities or
the rules of any stock exchange, the Nasdaq Stock Market's National
Market or other organization on which the Preferred Securities are
listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation amount of such class of
Trust Securities. Such direction shall be given by delivering to
the Regular Trustees one or more calls in a writing stating that
the signing Holders of Trust Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Trust Securities calling a meeting
shall specify in writing the Certificates held by the Holders of
Trust Securities exercising the right to call a meeting and only
those Trust Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second
sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Trust
Securities, the following provisions shall apply to meetings of
Holders of Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Trust Securities having a right to vote thereat at
least 7 days and not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the Holders of
Trust Securities is permitted or required under this Declaration
or the rules of any stock exchange, the Nasdaq Stock Market's
National Market or other organization on which the Preferred
Securities are listed or admitted for trading, such vote, consent
or approval may be given at a meeting of the Holders of Trust
Securities. Any action that may be taken at a meeting of the
Holders of Trust Securities may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by
the Holders of Trust Securities owning not less than the minimum
amount of Trust Securities in liquidation amount that would be
necessary to authorize or take such action at a meeting at which
all Holders of Trust Securities having a right to vote thereon
were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of Trust
Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot
submitted to a Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees;
(ii) each Holder of a Trust Security may authorize any Person
to act for it by proxy on all matters in which a Holder of Trust
Securities is entitled to participate, including waiving notice
of any meeting, or voting or participating at a meeting. No
proxy shall be valid after the expiration of 11 months from the
date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Holder of Trust
Securities executing it. Except as otherwise provided herein,
all matters relating to the
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giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Trust
Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Trust Securities shall
be conducted by the Regular Trustees or by such other Person that
the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Trust Securities, the Trust Indenture Act or the
listing rules of any stock exchange, the Nasdaq Stock Market's
National Market or other organization on which the Preferred
Securities are then listed or trading, otherwise provides, the
Regular Trustees, in their sole discretion, shall establish all
other provisions relating to meetings of Holders of Trust
Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of
Trust Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter
with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS AND WARRANTIES OF
PROPERTY TRUSTEE AND DELAWARE TRUSTEE
Section 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE. The
Property Trustee represents and warrants to the Trust and to the Sponsor at the
date of this Declaration, and each successor Property Trustee represents and
warrants to the Trust and the Sponsor at the time of its acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws
of the State of New York, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the
terms of, this Declaration and with its principal place of business in
New York.
(b) The execution, delivery and performance by the Property Trustee
of this Declaration have been duly authorized by all necessary
corporate action on the part of the Property Trustee. This
Declaration has been duly executed and delivered by the Property
Trustee, and, assuming due authorization, execution and delivery
hereof by the other parties hereto, it constitutes a legal, valid and
binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general
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principles of equity and the discretion of the court (whether
considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this Declaration by
the Property Trustee do not conflict with or constitute a breach of
the charter or by-laws of the Property Trustee.
(d) The Property Trustee, pursuant to this Declaration, shall hold
legal title and a valid ownership interest in the Subordinated
Debentures in accordance with the provisions hereof.
Section 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE. The
Delaware Trustee represents and warrants to the Trust and to the Sponsor at the
date of this Declaration, and each successor Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the time of its acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is either a natural person who is at least
21 years of age and a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in
the State of Delaware.
(b) The execution, delivery and performance by the Delaware Trustee
of this Declaration and the Certificate of Trust have been duly
authorized by all necessary corporate action on the part of the
Delaware Trustee. This Declaration has been duly executed and
delivered by the Delaware Trustee and, under Delaware law assuming due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of
the court (whether considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this Declaration and
the Certificate of Trust by the Delaware Trustee do not conflict with
or constitute a breach of the charter or by-laws of the Delaware
Trustee.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 NOTICES. All notices, instructions, requests and
demands provided for in this Declaration shall be in writing, duly signed by the
party giving same, and shall be delivered, telecopied or mailed by registered or
certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Trust Securities):
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NVP Capital III
6226 West Sahara Avenue
Las Vegas, Nevada 89146
Telecopy number: (702) 367-5864
(b) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give
notice of to the Holders of the Trust Securities):
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust Department
Telecopy number: (212) 858-2952
(c) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may give
notice of to the Holders of the Trust Securities):
Delaware Trust Capital Management, Inc.
900 Market Street, Second Floor
Wilmington, Delaware 19801
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89146
Attention: Chief Financial Officer
Telecopy number: (702) 367-5864
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 14.2 GOVERNING LAW. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
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Section 14.3 INTENTION OF THE PARTIES. It is the intention of the
parties hereto that the Trust not be characterized for United States federal
income tax purposes as an association taxable as a corporation or a partnership
but rather that the Trust be characterized as a grantor trust or otherwise in a
manner such that each Holder of Trust Securities will be treated as owning an
undivided beneficial interest in the Subordinated Debentures. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
Section 14.4 HEADINGS. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
Section 14.5 SUCCESSORS AND ASSIGNS. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
Section 14.6 PARTIAL ENFORCEABILITY. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section 14.7 COUNTERPARTS. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees and the Property Trustee
to one of such counterpart signature pages. All of such counterpart signature
pages shall be read as though one, and they shall have the same force and effect
as though all of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
RICHARD L. HINCKLEY,
as Regular Trustee
---------------------------------------
RICHARD C. SCHMALZ,
as Regular Trustee
---------------------------------------
DELAWARE TRUST CAPITAL MANAGEMENT, INC.,
as Delaware Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
NEVADA POWER COMPANY,
as Sponsor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
IBJ SCHRODER BANK & TRUST COMPANY,
as Property Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
<PAGE>
EXHIBIT A
TERMS OF
_____% TRUST ISSUED PREFERRED SECURITIES
_____% TRUST ISSUED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ________, 1998 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) PREFERRED SECURITIES. 2,800,000 Preferred Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of
seventy million dollars ($70,000,000) and a liquidation amount with respect to
the assets of the Trust of $25 per Preferred Security, are hereby designated for
the purposes of identification only as "_____% Trust Issued Preferred
Securities" (the "Preferred Securities"). The Certificates evidencing the
Preferred Securities shall be substantially in the form attached hereto as Annex
I, with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules of any
stock exchange on which the Preferred Securities are listed.
(b) COMMON SECURITIES. 86,598 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of two
million one hundred sixty-four thousand nine hundred and fifty dollars
($2,164,950) and a liquidation amount with respect to the assets of the Trust of
$25 per Common Security, are hereby designated for the purposes of
identification only as "_____% Trust Issued Common Securities" (the "Common
Securities"). The Certificates evidencing the Common Securities shall be
substantially in the form attached hereto as Annex II, with such changes and
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
2. DISTRIBUTIONS.
(a) Distributions payable on each Trust Security will be fixed at a
rate per annum of _____% (the "Coupon Rate") of the stated liquidation amount
of $25 per Trust Security, such rate being the rate of interest payable on
the Subordinated Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect
of the Subordinated Debentures held by the Property Trustee. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months,
and for any period shorter than a full quarterly Distribution period for
which Distributions are computed, Distributions will be computed on the basis
of the actual number of days elapsed per 30-day month.
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(b) Distributions on the Trust Securities will be cumulative, will
accumulate from ________, 1998, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
December 31, 1998, except as otherwise described below. The Sponsor has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Subordinated Debentures for
a period not exceeding 20 consecutive quarters (each, an "Extension Period")
and, during such Extension Period, Distributions will also be deferred.
Despite such deferral, quarterly Distributions will continue to accumulate
with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Sponsor may further extend
such Extension Period; PROVIDED THAT such Extension Period together with all
such previous and further extensions thereof may not exceed 20 consecutive
quarters and, in any event, may not extend beyond the Maturity Date (as
defined in the Indenture). Payments of accumulated Distributions will be
payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Sponsor may commence a new Extension Period, subject to the above
requirements.
(c) Distributions on the Trust Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Preferred Securities are represented by
Global Certificates, the relevant record dates shall be one Business Day
prior to the relevant payment dates which payment dates correspond to the
interest payment dates on the Subordinated Debentures. Subject to any
applicable laws and regulations and the provisions of the Declaration, as
long as the Preferred Securities are represented by Global Certificates, each
such payment in respect of the Preferred Securities will be made as described
under the heading "Description of the Preferred Securities--Book-Entry Only
Issuance--The Depository Trust Company" in the Prospectus dated _______, 1998
(the "Prospectus"), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust. The relevant record dates for the
Common Securities shall be the same record dates as for the Preferred
Securities. If the Preferred Securities shall not continue to be represented
by Global Certificates, the relevant record dates for the Preferred
Securities shall conform to the rules of any securities exchange on which the
securities are listed and, if none, shall be selected by the Regular
Trustees, which dates shall be at least 15 Business Days but less than 60
Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Subordinated Debentures, and
distributions will be payable at the Corporate Trust Office of the Property
Trustee. Distributions payable on any Trust Securities that are not
punctually paid on any Distribution payment date, as a result of the Sponsor
having failed to make a payment under the Subordinated Debentures, will cease
to be payable to the Person in whose name such Trust Securities are
registered on the relevant record date, and such Distribution will instead be
payable to the Person in whose name such Trust Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on the Trust
Securities is not a Business Day, then payment of the Distribution payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
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(d) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Trust
Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust, the Holders of the Trust Securities
on the date of the liquidation, dissolution, winding-up or termination, as
the case may be, will be entitled to receive out of the assets of the Trust
available for distribution to Holders of Trust Securities after satisfaction
of liabilities to creditors of the Trust an amount equal to the aggregate of
the stated liquidation amount of $25 per Trust Security plus accumulated and
unpaid Distributions thereon (including interest thereon) to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such liquidation, dissolution, winding-up or termination,
Subordinated Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Trust Securities shall be
distributed on a Pro Rata basis to the Holders of the Trust Securities in
exchange for such Trust Securities.
If, upon any such liquidation, dissolution, winding-up or termination,
the Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Trust
Securities shall be paid on a Pro Rata basis. The holders of the Common
Securities will be entitled to receive distributions upon any such
dissolution Pro Rata with the holders of the Preferred Securities, except
that if an Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities with regard to
such distributions.
On and from the date fixed by the Regular Trustees for any distribution
of Subordinated Debentures and dissolution of the Trust: (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) the Depositary,
as the Holder of the Preferred Securities, will receive a registered global
certificate representing the Subordinated Debentures to be delivered upon
such distribution, and (iii) any certificates representing Trust Securities
not held by the Depositary or its nominee (or any successor depositary or its
nominee), will be deemed to represent beneficial interests in the
Subordinated Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to
the Coupon Rate of, and accrued and unpaid interest equal to accumulated and
unpaid Distributions on, such Trust Securities until such certificates are
presented to the Sponsor or its agent for transfer or reissue.
If the Subordinated Debentures are distributed to holders of the Trust
Securities, pursuant to the terms of the Indenture, the Sponsor will use its
best efforts to have the Subordinated Debentures listed on the New York Stock
Exchange or on such other exchange, the Nasdaq Stock Market's National Market
or other organization as the Preferred Securities were listed immediately
prior to the distribution of the Subordinated Debentures.
4. REDEMPTION; REDEMPTION/DISTRIBUTION PROCEDURES.
(a) Upon the repayment of the Subordinated Debentures, whether at the
Maturity Date or upon redemption thereof, in whole or in part, the proceeds from
such repayment or redemption
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shall be simultaneously applied to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debentures so repaid or redeemed at a redemption price of $25
per Trust Security plus an amount equal to accumulated and unpaid
Distributions thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more than 60
days notice of such redemption.
(b) If fewer than all the outstanding Trust Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Section 4(d)(ii) below.
(c) The Trust may not redeem fewer than all the outstanding Trust
Securities unless all accumulated and unpaid Distributions have been paid on
all Trust Securities for all quarterly Distribution periods terminating on or
before the date of redemption.
(d) (i) Notice of any redemption of the Trust Securities, or
notice of distribution of Subordinated Debentures in
exchange for the Trust Securities (a "Redemption/Distribution
Notice"), will be given by the Regular Trustees on behalf of
the Trust by mail to each Holder of Trust Securities to be
redeemed or exchanged not fewer than 30 nor more than 60
days before the date fixed for redemption or exchange
thereof which, in the case of a redemption, will be the date
fixed for redemption of the Subordinated Debentures. For
purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant
to this Section 4(d)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first
mailed by first-class mail, postage prepaid, to Holders of
Trust Securities. Each Redemption/Distribution Notice shall
be addressed to the Holders of Trust Securities at the
address of each such Holder appearing in the books and
records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity
of the redemption or exchange proceedings with respect to
any other Holder.
(ii) In the event that fewer than all the outstanding Trust
Securities are to be redeemed, the Trust Securities to be
redeemed shall be redeemed Pro Rata and, in the event
Preferred Securities are represented by Global
Certificates held by or on behalf of the Depositary or
its nominee (or any successor depositary or its nominee),
the Depositary will reduce Pro Rata the amount of the
interest of each Depositary Participant in the Preferred
Securities to be redeemed; PROVIDED, THAT if, as a result
of such Pro Rata redemption, Depositary Participants
would hold fractional interests in the Preferred
Securities, the Depositary will adjust the amount of the
interest of each Depositary Participant to be redeemed to
avoid such fractional interests.
(iii) If Trust Securities are to be redeemed and the Regular
Trustees on behalf of the Trust give a Redemption/Distribution
Notice, which notice may only be issued if the Subordinated
Debentures are redeemed as set out in this Section 4 (which
notice will be irrevocable), then (A) while the Preferred
Securities
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<PAGE>
are represented by Global Certificates, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on
the redemption date, provided that the Sponsor has paid the
Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Subordinated
Debentures, then the Property Trustee will deposit
irrevocably with the Depositary funds sufficient to pay the
applicable Redemption Price with respect to the Preferred
Securities and will give the Depositary irrevocable
instructions and authority to pay the Redemption Price to
the Holders of the Preferred Securities, and (B) with
respect to Preferred Securities represented by Definitive
Preferred Security Certificates and Common Securities,
provided, that the Sponsor has paid the Property Trustee a
sufficient amount of cash in connection with the related
redemption or maturity of the Subordinated Debentures, then
the Property Trustee will pay the relevant Redemption Price
to the Holders of such Trust Securities by check mailed to
the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date upon
surrender of their Certificates evidencing such Preferred
Securities and such Common Securities. If a
Redemption/Distribution Notice shall have been given and
funds deposited as required, then immediately prior to the
close of business on the date of such deposit, or on the
redemption date, as applicable, Distributions will cease to
accumulate on the Trust Securities so called for redemption
and all rights of Holders of such Trust Securities so called
for redemption will cease, except the right of the Holders
of such Trust Securities to receive the Redemption Price,
but without interest on such Redemption Price. Neither the
Regular Trustees nor the Trust shall be required to register
or cause to be registered the transfer of any Trust
Securities that have been so called for redemption. If any
date fixed for redemption of Trust Securities is not a
Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is
a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect
of any Trust Securities is improperly withheld or refused
and not paid either by the Property Trustee or by the
Sponsor as guarantor pursuant to the Preferred Securities
Guarantee or the Common Securities Guarantee, as the case
may be, Distributions on such Trust Securities will continue
to accumulate from the original redemption date to the
actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for
purpose of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect
of the Preferred Securities, the Depositary if the
Preferred Securities are represented by Global
Certificates or, if Preferred Securities are represented
by Definitive Preferred Security
A-5
<PAGE>
Certificates, to the Holder thereof, and (B) in respect of
the Common Securities, to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities
laws), provided the acquiror is not the Holder of the
Common Securities or the obligor under the Indenture, the
Sponsor or any of its subsidiaries may at any time and
from time to time purchase outstanding Preferred
Securities by tender, in the open market or by private
agreement.
5. VOTING RIGHTS - PREFERRED SECURITIES.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required
by law, the Preferred Securities Guarantee and the Declaration, the
Holders of the Preferred Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders
of a Majority in liquidation amount of the Preferred Securities,
voting separately as a class may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property
Trustee, or the exercise of any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power
conferred on the Indenture Trustee with respect to the Subordinated
Debentures, (ii) waiving any past default and its consequences that is
waivable under Section 413 of the Indenture, or (iii) exercising any
right to rescind or annul a declaration that the principal of all the
Subordinated Debentures shall be due and payable, PROVIDED, HOWEVER,
that, where a consent under the Indenture would require the consent or
act of all of the holders of Subordinated Debentures affected thereby,
the Property Trustee may only give such consent or take such action at
the direction of all of the Holders of the Preferred Securities. The
Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other
than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the
Indenture Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of
the Preferred Securities under this paragraph unless the Property
Trustee has obtained an opinion of a nationally recognized independent
tax counsel experienced in such matters to the effect that for the
purposes of United States federal income tax the Trust will not fail
to be classified as a grantor trust on account of such action. If the
Property Trustee fails to enforce its rights under the Declaration or
the Subordinated Debentures, any Holder of Preferred Securities may
institute a legal proceeding directly against any Person to enforce
the Property Trustee's rights under the Declaration or the
Subordinated Debentures without first instituting a legal proceeding
against the Property Trustee or any other Person. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and
such event is attributable to the failure of the Sponsor to pay
interest or principal on the
A-6
<PAGE>
Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Preferred Securities may directly institute
a proceeding for enforcement of payment to such holder of the
principal of or interest on the Subordinated Debentures having a
principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder on or after the respective due
dates specified in the Subordinated Debentures. In connection with
such direct action, the Sponsor will be subrogated to the rights of
such Holder of Preferred Securities under the Declaration to the
extent of any payment made by the Sponsor to such Holder of Preferred
Securities in connection with such direct action.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of Trust
Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of
Preferred Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed
to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of
any resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which the written
consent is sought and (iii) instructions for the delivery of proxies
or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Debentures in accordance with the
Declaration and the terms of the Trust Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of
the Preferred Securities that are owned by the Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
6. VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under Sections 6(b) and 6(c), and as otherwise
required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace
any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration, only after an Event of
Default with respect to the Preferred Securities has been cured,
waived or otherwise eliminated and subject to the requirements set
forth in this paragraph, the Holders of a Majority in
A-7
<PAGE>
liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or the
exercise of any trust or power conferred upon the Property Trustee
under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred on the Property
Trustee with respect to the Subordinated Debentures, (ii) waiving any
past default and its consequences that is waivable under Section 413
of the Indenture, or (iii) exercising any right to rescind or annul a
declaration that the principal of all the Subordinated Debentures
shall be due and payable, PROVIDED, HOWEVER, that, where a consent or
action under the Indenture would require the consent or act of all of
the holders of the Subordinated Debentures, the Property Trustee may
only give such consent or take such action at the direction of all of
the Holders of the Common Securities. Pursuant to this Section 6(c),
the Property Trustee shall not revoke any action previously authorized
or approved by a vote of the Holders of the Common Securities. Other
than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the
Indenture Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Property Trustee
has obtained, at the expense of the Holders of the Common Securities,
a written opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that for the purposes of
United States federal income tax the Trust will not fail to be
classified as a grantor trust on account of such action. If the
Property Trustee fails to enforce its rights under the Declaration and
the Subordinated Debentures, any Holder of Common Securities may after
written request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against any Person to enforce
the Property Trustee's rights under the Declaration and the
Subordinated Debentures, without first instituting a legal proceeding
against the Property Trustee or any other person. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and
such event is attributable to the failure of the Sponsor to pay
interest or principal on the Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Common
Securities may directly institute a proceeding for enforcement of
payment to such holder of the principal of or interest on the
Subordinated Debentures having a principal amount equal to the
aggregate liquidation amount of the Common Securities of such holder
on or after the respective due dates specified in the Subordinated
Debentures. In connection with such direct action, the Sponsor will
be subrogated to the rights of such Holder of Common Securities under
the Declaration to the extent of any payment made by the Sponsor to
such Holder of Common Securities in connection with such direct
action.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Trust Securities
in the Trust or pursuant to written consent. The Regular Trustees
will cause a notice of any meeting at which Holders
A-8
<PAGE>
of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed
to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is
sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Subordinated Debentures in accordance with the
Declaration and the terms of the Trust Securities.
7. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect (i) any action that would
adversely affect the powers, preferences or special rights of the
Trust Securities, whether by way of amendment to the Declaration or
otherwise, or (ii) the involuntary or voluntary liquidation,
dissolution, winding-up or termination of the Trust, other than as
described in Section 8.1 of the Declaration, then the Holders of
outstanding Trust Securities as a class, will be entitled to vote on
such amendment or proposal (but not on any other amendment or
proposal) and such amendment or proposal shall not be effective except
with the approval of the Holders of at least 66-2/3% in liquidation
amount of the Trust Securities, voting together as a single class;
provided that a reduction of the aggregate liquidation amount or the
Distribution rate, a change in the payment dates or maturities of the
Preferred Securities or a reduction in the percentage in liquidation
amount of outstanding Preferred Securities, the consent of the Holders
of which is required for an amendment to the Declaration shall not be
permitted without the consent of each Holder of the Preferred
Securities. In the event any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities
or only the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of 66-2/3% in
liquidation amount of such class of Trust Securities.
(b) In the event the consent of the Property Trustee, as the holder of the
Subordinated Debentures, the Preferred Securities Guarantee and the
Common Securities Guarantee, is required under the Indenture with
respect to any amendment, modification, waiver or termination of the
Indenture, the Subordinated Debentures, the Preferred Securities
Guarantee or the Common Securities Guarantee, the Property Trustee
shall request the direction of the Holders of the Trust Securities
with respect to such amendment, modification, waiver or termination
and shall vote with respect to such amendment, modification, waiver or
termination as directed by a Majority in liquidation amount of the
Trust Securities voting together as a single class; PROVIDED, HOWEVER,
that where a consent under the Indenture would require the consent of
all of the holders of the Subordinated Debentures, the Property
A-9
<PAGE>
Trustee may only give such consent at the direction of all of the
Holders of the Trust Securities; PROVIDED, FURTHER, that the Property
Trustee shall not take any action in accordance with the directions of
the Holders of the Trust Securities under this Section 7(b) unless the
Property Trustee has obtained, at the expense of the Holders of the
Trust Securities, a written opinion of a nationally recognized
independent tax counsel experienced in such matters to the effect that
for the purposes of United States federal income tax the Trust will
not be classified as other than a grantor trust on account of such
action.
8. PRO RATA.
A reference to any payment, distribution or treatment as being "Pro Rata"
shall mean pro rata to each Holder of Trust Securities according to the
aggregate liquidation amount of the Trust Securities held by the relevant Holder
in relation to the aggregate liquidation amount of all Trust Securities
outstanding unless, in relation to a payment, an Event of Default under the
Indenture has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Preferred Securities
pro rata according to the aggregate liquidation amount of Preferred Securities
held by the relevant Holder relative to the aggregate liquidation amount of all
Preferred Securities outstanding, and only after satisfaction of all amounts
owed to the Holders of the Preferred Securities, to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding.
9. RANKING.
The Preferred Securities rank PARI PASSU and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Subordinated
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
10. LISTING.
The Regular Trustees shall use their best efforts to cause the Preferred
Securities to be listed on the New York Stock Exchange subject to notice of
issuance.
11. ACCEPTANCE OF TRUST SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. NO PREEMPTIVE RIGHTS.
A-10
<PAGE>
The Holders of the Trust Securities shall have no preemptive rights to
subscribe for any additional securities.
13. MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Trust at its principal place of business.
A-11
<PAGE>
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company, a New York corporation (the "Depositary"), or a nominee of the
Depositary. This Preferred Security is exchangeable for Preferred Securities
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration and no transfer of
this Preferred Security (other than a transfer of this Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of the Depositary to the Trust or its agent for registration of transfer,
exchange or payment, and any Preferred Security issued is registered in the name
of CEDE & Co. or such other name as is requested by an authorized representative
of the Depositary and any payment hereon is made to CEDE & Co. or such other
entity as is requested by an authorized representative of the Depositary, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, CEDE & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO.
Certificate Evidencing Preferred Securities
of
NVP CAPITAL III
Preferred Securities
(liquidation amount $25 per Preferred Security)
NVP CAPITAL III, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that _____________________
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the _____% Trust Issued Preferred Securities (liquidation amount
$25 per Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person
or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of ________, 1998, as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Preferred Securities
I-1
<PAGE>
as set forth in Exhibit A to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Preferred Securities Guarantee to
the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Preferred Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the holder agrees to treat for United States federal income
tax purposes, the Subordinated Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Subordinated
Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____ day
of ________________________, ________.
Richard L. Hinckley
as Trustee
__________________________________________
Richard C. Schmalz
as Trustee
__________________________________________
I-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _____________________________________
Signature: ________________________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
I-3
<PAGE>
ANNEX II
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
NVP CAPITAL III
Common Securities
(liquidation amount $25 per Common Security)
NVP CAPITAL III, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that ___________________ (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the _____%
Trust Common Securities (liquidation amount $25 per Common Security) (the
"Common Securities"). Subject to the limitations set forth in Article 9 of the
Declaration, the Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of _________, 1998, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as set forth in Exhibit A to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities Guarantee
to the extent provided therein. The Trust will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture to the Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal income
tax purposes the Subordinated Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Subordinated
Debentures.
II-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this __________
day of ________, ______.
Richard L. Hinckley
as Trustee
__________________________________________
Richard C. Schmalz
as Trustee
__________________________________________
II-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert assignee's social security or tax identification number)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _____________________________________
Signature: ________________________________
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
II-3
<PAGE>
EXHIBIT B
__________________________
PREFERRED SECURITIES GUARANTEE AGREEMENT
NVP CAPITAL III
DATED AS OF _________, 1998
__________________________
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01 Definitions and Interpretation. . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
Section 2.01 Trust Indenture Act; Application. . . . . . . . . . . . . . . 4
Section 2.02 Lists of Holders of Trust Securities. . . . . . . . . . . . . 4
Section 2.03 Reports by the Preferred Guarantee Trustee. . . . . . . . . . 5
Section 2.04 Periodic Reports to Preferred Guarantee Trustee . . . . . . . 5
Section 2.05 Evidence of Compliance with Conditions Precedent. . . . . . . 5
Section 2.06 Events of Default; Waiver . . . . . . . . . . . . . . . . . . 5
Section 2.07 Event of Default; Notice. . . . . . . . . . . . . . . . . . . 5
Section 2.08 Conflicting Interests . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
POWER, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
Section 3.01 Powers and Duties of the Preferred Guarantee Trustee. . . . . 6
Section 3.02 Certain Rights of Preferred Guarantee Trustee . . . . . . . . 7
Section 3.03 Not Responsible for Recitals or Issuance of Guarantee . . . . 9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
Section 4.01 Preferred Guarantee Trustee; Eligibility. . . . . . . . . . . 9
Section 4.02 Appointment, Removal and Resignation of Preferred
Guarantee Trustees. . . . . . . . . . . . . . . . . . . . . .10
ARTICLE V
GUARANTEE
Section 5.01 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . .11
Section 5.02 Subordination . . . . . . . . . . . . . . . . . . . . . . . .11
Section 5.03 Waiver of Notice and Demand . . . . . . . . . . . . . . . . .11
Section 5.04 Obligations Not Affected. . . . . . . . . . . . . . . . . . .11
i
<PAGE>
Section 5.05 Rights of Holders . . . . . . . . . . . . . . . . . . . . . .12
Section 5.06 Guarantee of Payment. . . . . . . . . . . . . . . . . . . . .12
Section 5.07 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . .12
Section 5.08 Independent Obligations . . . . . . . . . . . . . . . . . . .13
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.01 Limitation of Transactions. . . . . . . . . . . . . . . . . .13
Section 6.02 Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE VII
TERMINATION
Section 7.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . .14
ARTICLE VIII
INDEMNIFICATION
Section 8.01 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 8.02 Indemnification . . . . . . . . . . . . . . . . . . . . . . .14
ARTICLE IX
MISCELLANEOUS
Section 9.01 Successors and Assigns. . . . . . . . . . . . . . . . . . . .15
Section 9.02 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 9.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 9.04 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 9.05 Governing Law . . . . . . . . . . . . . . . . . . . . . . . .16
ii
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Trust Indenture Section of
Act of 1939, as amended Guarantee Agreement
-------------------------- -------------------
<S> <C>
310(a) 4.01(a)
310(b) 4.01(c)
310(c) Inapplicable
311(a) 2.02(b)
311(b) 2.02(b)
311(c) Inapplicable
312(a) 2.02(a)
312(b) 2.02(b)
313 2.03
314(a) 2.04
314(b) Inapplicable
314(c) 2.05
314(d) Inapplicable
314(e) 1.01, 2.05, 3.02
314(f) 2.01, 3.02
315(a) 3.01(d)
315(b) 2.07
315(c) 3.01
315(d) 3.01(d)
316(a) 1.01, 2.06, 5.05
316(b) 5.04
316(c) Inapplicable
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.01(b)
</TABLE>
* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
-i-
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Guarantee Agreement"), dated as of
_________, 1998, is executed and delivered by Nevada Power Company, a Nevada
corporation (the "Guarantor"), and IBJ Schroder Bank & Trust Company, a New York
banking corporation, as trustee (the "Preferred Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of NVP Capital III, a Delaware statutory business
trust (the "Issuer").
RECITALS
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of _________, 1998, among the trustees of the Issuer
named therein, the Guarantor as sponsor and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof $70,000,000 aggregate stated liquidation amount of
Preferred Securities designated the _____% Trust Issued Preferred Securities
(the "Preferred Securities");
WHEREAS, as incentive for the Holders (as hereinafter defined) to purchase
the Preferred Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth in this Guarantee Agreement, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee Agreement") with substantially
identical terms to this Guarantee Agreement for the benefit of the holders of
the Common Securities (as defined herein) except that if an Event of Default (as
defined in the Indenture (as defined herein)), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee Agreement are subordinated to the rights
of Holders of Preferred Securities to receive Guarantee Payments under this
Guarantee Agreement.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01 DEFINITIONS AND INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise requires:
<PAGE>
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble above have the respective meanings assigned to them
in this Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(c) all references to "this Guarantee Agreement" are to this
Guarantee Agreement as modified, supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person and, with respect to the Guarantor, the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Treasurer,
any assistant Treasurer or any other Officer, or agent of the Guarantor duly
authorized by the board of directors of the Guarantor to act in such matters
relating to the Declaration.
"Common Securities" means the common securities representing undivided
beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer: (i) any accumulated and unpaid Distributions (as defined in
the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer shall have funds
available therefor
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<PAGE>
with respect to any Preferred Securities called for redemption by the Issuer,
and (iii) upon a voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Subordinated Debentures to the Holders or the redemption of
all the Preferred Securities upon the redemption or Maturity Date (as defined
in the Indenture) of the Subordinated Debentures), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the Preferred Securities to the date of payment to the
extent the Trust shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Holder" means any holder, as registered on the books and records of the
Issuer of any Preferred Securities; PROVIDED, THAT, in determining whether the
holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Preferred
Guarantee Trustee.
"Indenture" means the Indenture dated as of _________, 1998, among the
Guarantor and IBJ Schroder Bank & Trust Company, as trustee, as modified,
amended or supplemented from time to time.
"Majority in liquidation amount of the Trust Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by an Authorized Officer of such Person. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that such officer signing the Officer's Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officer's Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
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<PAGE>
"Opinion of Counsel" or "opinion of counsel" means a written opinion of
counsel for the Preferred Guarantee Trustee or the Guarantor and who shall be
reasonably acceptable to the Preferred Guarantee Trustee.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means IBJ Schroder Bank & Trust Company,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, when used with respect to the Preferred
Guarantee Trustee, any vice-president, any assistant vice-president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer or
any other officer in the Corporate Trust Office customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for administration of this Guarantee Agreement and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as the same may be
amended from time to time, or any successor legislation.
"Subordinated Debentures" means $72,164,950 aggregate principal amount of
the Guarantor's _____% Junior Subordinated Deferrable Interest Debentures due
2038 held by the Property Trustee of the Issuer.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as the same
may be amended from time to time, or any successor legislation.
"Trust Securities" means collectively the Common Securities and the
Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions; and
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<PAGE>
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such duties imposed by the
Trust Indenture Act shall control.
Section 2.02 LISTS OF HOLDERS OF TRUST SECURITIES.
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such date, (i) within 14 days after each record date for payment of
distributions, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more
than 14 days before such List of Holders is given to the Preferred Guarantee
Trustee provided that the Guarantor shall not be obligated to provide such
List of Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Preferred Guarantee Trustee by the
Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture
Act.
Section 2.03 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
Within 60 days after December 31 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
Section 2.04 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Guarantee Agreement that relate to any of the matters set forth in Section
314 (c) of the Trust Indenture Act. Any certificate or opinion required to be
given by officers of the Guarantor pursuant to Section 314(c)(1) shall be given
in the form of an Officer's Certificate.
Section 2.06 EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event
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<PAGE>
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right
consequent thereon.
Section 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the
Preferred Guarantee Trustee, unless such defaults have been cured before the
giving of such notice, PROVIDED, THAT, the Preferred Guarantee Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer of the
Preferred Guarantee Trustee shall have received written notice as provided in
Section 9.03, or a Responsible Officer shall have obtained actual notice, of
such Event of Default.
Section 2.08 CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of the first proviso contained in Section
310(b) of the Trust Indenture Act.
ARTICLE III
POWER, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
Section 3.01 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders, and the Preferred Guarantee
Trustee shall not transfer this Guarantee Agreement to any Person except a
Holder exercising his or her rights pursuant to Section 5.05(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee
Trustee, and such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered pursuant to
the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to
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<PAGE>
perform only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Preferred Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06), the Preferred Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the
Preferred Guarantee Trustee shall be determined solely by the
express provisions of this Guarantee Agreement, and the Preferred
Guarantee Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Guarantee Agreement, and no implied covenants or obligations shall
be read into this Guarantee Agreement against the Preferred
Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Preferred Guarantee Trustee, the Preferred Guarantee Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions
that by any provision hereof are specifically required to be
furnished to the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer of
the Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Preferred Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust or
power conferred upon the Preferred Guarantee Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Preferred Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or
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<PAGE>
powers, if the Preferred Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably
assured to it.
Section 3.02 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) The Preferred Guarantee Trustee may rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, Officer's Certificate, statement, instrument, opinion,
Opinion of Counsel, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by a Direction
or an Officer's Certificate.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Preferred Guarantee Trustee shall deem it desirable that
a matter be proved or established before taking, suffering or omitting
any action hereunder, the Preferred Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad
faith on its part, request and rely upon an Officer's Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
re-recording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with
counsel, and the written advice or opinion of such counsel with respect
to legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such counsel
may be counsel to the Guarantor or any of its Affiliates and may include
any of its employees. The Preferred Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration of
this Guarantee Agreement from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity acceptable to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee; provided that, nothing contained in
this Section 3.02(a)(vi) shall be taken to
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<PAGE>
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested
in it by this Guarantee Agreement.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Preferred
Guarantee Trustee, in its discretion may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders, and the signature of the
Preferred Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required
to inquire as to the authority of the Preferred Guarantee Trustee to so
act or as to its compliance with any of the terms and provisions of this
Guarantee Agreement, both of which shall be conclusively evidenced by
the Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Guarantee
Agreement the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i)
may request instructions from the Holders, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in acting in
accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Preferred Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or imposed
on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available
to the Preferred Guarantee Trustee shall be construed to be a duty.
Section 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Guarantee Agreement.
<PAGE>
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
Section 4.01 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee that
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.02 (c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
Section 4.02 APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEES.
(a) Subject to Section 4.02(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.02(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor and the Preferred Guarantee Trustee being removed.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Guarantee
Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment by instrument in
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writing executed by such Successor Preferred Guarantee Trustee and delivered
to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may
deem proper, appoint a Successor Preferred Guarantee Trustee.
ARTICLE V
GUARANTEE
Section 5.01 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
Section 5.02 SUBORDINATION.
If an event of default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive
payments under the Common Securities Guarantee Agreement are subordinated to
the rights of Holders to receive Guarantee Payments.
Section 5.03 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
Section 5.04 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
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(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sums payable that results from the extension of any
interest payment period on the Subordinated Debentures or any extension of
the maturity date of the Subordinated Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.04 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.05 RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this
Guarantee Agreement.
(b) Notwithstanding anything contained herein, any Holder of
Preferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other Person.
Section 5.06 GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not of
collection.
B-12
<PAGE>
Section 5.07 SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Guarantee Agreement; PROVIDED, HOWEVER , that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
Section 5.08 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.04 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.01 LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the
Declaration, then the Guarantor shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock or (ii) make any payment of
principal of, or interest or premium, if any, on or repay, repurchase or
redeem, or make any sinking fund payment with respect to, any indebtedness of
the Company (including other junior subordinated debt securities) that ranks
PARI PASSU with or junior in right of payment to the Subordinated Debentures
or make any guarantee payments with respect to the foregoing (other than (a)
dividends or distributions in common stock of the Company, (b) redemptions or
purchases of any rights pursuant to the Company's Stock Purchase Rights Plan,
or any successor to such Stock Purchase Rights Plan, and the declaration of a
dividend of such rights or the issuance of preferred stock under such plans
in the future, (c) payments under this Guarantee Agreement, (d) purchases of
common stock related to the issuance of common stock under the Company's
Stock Purchase and Dividend Reinvestment Plan and any of the Company's
benefit plans for its directors, officers or employees and (e) purchases of
common stock required to prevent the loss or secure the renewal or
reinstatement of any government license or franchise held by the Company or
any of its subsidiaries).
B-13
<PAGE>
Section 6.02 RANKING.
This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor (other than the Common Securities Guarantee
or any guarantee now or hereafter entered into by the Guarantor in respect of
any preferred or preference stock of any Affiliate of the Guarantor), (ii) PARI
PASSU with the most senior preferred or preference stock now or hereafter issued
by the Guarantor and with any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference stock of any Affiliate of
the Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
Section 7.01 TERMINATION.
This Guarantee Agreement shall terminate upon (i) full payment of the
Redemption Price of all Preferred Securities, (ii) the distribution of the
Subordinated Debentures to the Holders of all Preferred Securities or (iii) full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Preferred Securities must restore payment of
any sums paid under the Preferred Securities or under this Preferred Securities
Guarantee. Notwithstanding anything contained herein to the contrary, the
obligations of the Guarantor set forth in Article VIII hereof shall survive
termination of this Guarantee Agreement or the earlier resignation or removal of
the Preferred Guarantee Trustee.
ARTICLE VIII
INDEMNIFICATION
Section 8.01 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance
with this Guarantee Agreement and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee Agreement or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been
B-14
<PAGE>
selected with reasonable care by or on behalf of the Guarantor, including
information, opinions, reports or statements as to the value and amount of
the assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders of
Preferred Securities might properly be paid.
Section 8.02 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person in
connection with this Guarantee Agreement including without limitation by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith in accordance with this Guarantee Agreement and in a manner
such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Guarantee Agreement,
except that no Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence or willful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of any
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.02(a).
ARTICLE IX
MISCELLANEOUS
Section 9.01 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives
of the Guarantor and shall inure to the benefit of the Holders of the
Preferred Securities then outstanding.
Section 9.02 AMENDMENTS.
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required),
this Guarantee Agreement may only be amended with the prior approval of the
Holders of at least 66-2/3% in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all the outstanding Preferred Securities (as
defined in the Declaration). The provisions of Section 12.2 of the
Declaration with respect to meetings or actions by written consent of Holders
of the Trust Securities apply to the giving of such approval. The Preferred
Guarantee Trustee may, but shall have no obligation to, execute and deliver
any amendment to
B-15
<PAGE>
this Guarantee Agreement which affects the Preferred Guarantee Trustee's
rights, duties or immunities hereunder or otherwise.
Section 9.03 NOTICES.
All notices provided for in this Guarantee Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust Department
Telecopy Number: (212) 858-2952
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89146
Telecopy Number: (702) 367-5864
(c) If given to any Holder of Preferred Securities, at the address
set forth in the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 9.04 BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders of the
Preferred Securities and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.
Section 9.05 GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
B-16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee Agreement
to be executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
NEVADA POWER COMPANY
By:
----------------------------------
Name:
Title:
IBJ SCHRODER BANK & TRUST COMPANY,
as Preferred Guarantee Trustee
By:
----------------------------------
Name:
Title:
B-17
<PAGE>
EXHIBIT C
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Guarantee Agreement"), dated as of
__________, 1998, is executed and delivered by Nevada Power Company, a Nevada
corporation (the "Guarantor"), for the benefit of the Holders (as defined
herein) from time to time of the Common Securities (as defined in the
Declaration referred to below) of NVP Capital III, a Delaware business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ____________, 1998, among the Trustees of the Issuer
named therein, the Guarantor as sponsor and the holders from time to time of
securities representing undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof $2,164,950 aggregate stated
liquidation amount of the Issuer's Common Securities designated the _____% Trust
Issued Common Securities (the "Common Securities"), representing beneficial
interests in the assets of the Issuer;
WHEREAS, as incentive for the Holders to purchase the Common Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee Agreement, to pay to the Holders of the Common
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement on substantially identical terms to this Guarantee Agreement for the
benefit of the holders of the Preferred Securities (the "Preferred Securities
Guarantee") except that if an Event of Default (as defined in the Indenture),
has occurred and is continuing, the rights of Holders of the Common Securities
to receive Guarantee Payments under this Guarantee Agreement are subordinated to
the rights of holders of Preferred Securities to receive Guarantee Payments
under the Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of Common
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 DEFINITIONS. In this Guarantee Agreement, unless the
context otherwise requires, the terms set forth below shall have the
following meanings.
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution of
this Guarantee Agreement have the same meaning when used in this Guarantee
Agreement unless otherwise defined in this Guarantee Agreement;
(c) A term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(d) All references to "this Guarantee Agreement" are to this
Guarantee Agreement as modified, supplemented or amended from time to time;
(e) All references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified; and
(f) A reference to the singular includes the plural and vice versa.
"Guarantee Payments" shall mean the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions which
are required to be paid on such Common Securities to the extent the Issuer shall
have funds available therefor, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the "Redemption
Price") to the extent the Issuer shall have funds available therefor, with
respect to any Common Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary liquidation, dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Subordinated Debentures to the Holders on the redemption of all the Common
Securities upon the redemption or Maturity Date of the Subordinated Debentures),
the lesser of (a) the aggregate of the liquidation amount and all accumulated
and unpaid Distributions on the Common Securities to the date of payment, and
(b) the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Common Securities.
C-2
<PAGE>
ARTICLE II
GUARANTEE
Section 2.1 GUARANTEE. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer
may have or assert. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Guarantor
to the Holders or by causing the Issuer to pay such amounts to the Holders.
Section 2.2 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of non-payment, notice of
dishonor, notice of redemption and all other notices and demands.
Section 2.3 SUBORDINATION. If an Event of Default (as defined in the
Indenture), has occurred and is continuing, the rights of Holders of the
Common Securities to receive Guarantee Payments under this Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities
to receive Guarantee Payments under the Preferred Securities Guarantee.
Section 2.4 OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall
in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Common Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Common Securities or the
extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Common Securities (other than an extension
of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Subordinated Debentures or any extension of
the maturity date of the Subordinated Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Common
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
C-3
<PAGE>
(e) any invalidity of, or defect or deficiency in the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 2.4 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 2.5 RIGHTS OF HOLDERS. The Guarantor expressly acknowledges
that any Holder of Common Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Issuer or
any other Person.
Section 2.6 GUARANTEE OF PAYMENT. This Guarantee Agreement creates a
guarantee of payment and not of collection.
Section 2.7 SUBROGATION OF PAYMENT. The Guarantor shall be
subrogated to all (if any) rights of the Holders of Common Securities against
the Issuer in respect of any amounts paid to such Holders by the Guarantor
under this Guarantee Agreement; PROVIDED, HOWEVER, that the Guarantor shall
not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement.
if any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders
and to pay over such amount to the Holders.
Section 2.8 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer
with respect to the Common Securities and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments pursuant to
the terms of this Guarantee Agreement notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 2.4
hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 3.1 LIMITATION OF TRANSACTIONS. So long as any Common
Securities remain outstanding, if (A) the Guarantor shall be in default with
respect to its Guarantee Payments or other obligations hereunder, or (B) there
shall have occurred any Event of Default, then the Guarantor shall not (i)
declare or pay any dividends or distributions on, or redeem, purchase,
C-4
<PAGE>
acquire or make a liquidation payment with respect to, any of its capital
stock or (ii) make any payment of principal of, or interest or premium, if
any, on or repay, repurchase or redeem, or make any sinking fund payment with
respect to, any indebtedness of the Company (including other junior
subordinated debt securities) that ranks PARI PASSU with or junior in right
of payment to the Subordinated Debentures or make any guarantee payments with
respect to the foregoing (other than (a) dividends or distributions in common
stock of the Company, (b) redemptions or purchases of any rights pursuant to
the Company's Stock Purchase Rights Plan, or any successor to such Stock
Purchase Rights Plan, and the declaration of a dividend of such rights or the
issuance of preferred stock under such plans in the future, (c) payments
under this Guarantee Agreement, (d) purchases of common stock related to the
issuance of common stock under the Company's Stock Purchase and Dividend
Reinvestment Plan and any of the Company's benefit plans for its directors,
officers or employees and (e) purchases of common stock required to prevent
the loss or secure the renewal or reinstatement of any government license or
franchise held by the Company or any of its subsidiaries).
Section 3.2 RANKING. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor (other
than any obligation in respect of the Preferred Securities Guarantee or any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor), (ii) PARI
PASSU with the most senior preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter entered into
by the Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor, and (iii) senior to the Guarantor's common stock.
If an Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of Holders of the Common Securities to receive
Guarantee Payments under this Guarantee Agreement are subordinated to the
rights of holders of Preferred Securities to receive Guarantee Payments.
ARTICLE IV
TERMINATION
Section 4.1 TERMINATION. This Guarantee Agreement shall terminate
upon full payment of the Redemption Price of all Common Securities, upon the
distribution of the Subordinated Debentures to the Holders of all of the
Common Securities or upon full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities
or under this Guarantee Agreement.
ARTICLE V
MISCELLANEOUS
Section 5.1 SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of
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<PAGE>
the Guarantor and shall inure to the benefit of the Holders of the Common
Securities then outstanding.
Section 5.2 AMENDMENTS. Except with respect to any changes which do
not adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of at least 66-2/3% in liquidation amount
of all the outstanding Common Securities. The provisions of Section 12.2 of
the Declaration with respect to meetings of holders of the Trust Securities
apply to the giving of such approval.
Section 5.3 NOTICES. All notices provided for in this Guarantee
Agreement shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail,
as follows:
(a) if given to the Issuer, in care of the Regular Trustees at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders of the Common Securities):
NVP Capital III
6226 West Sahara Avenue
Las Vegas, Nevada 89146
Telecopy Number: (702) 367-5864
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give
notice of to the Holders of the Common Securities):
Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89146
Telecopy Number: (702) 367-5864
(c) if given to any Holder of Common Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 5.4 BENEFICIARIES. This Guarantee Agreement is solely for
the benefit of the Holders and is not separately transferable from the Common
Securities.
Section 5.5 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
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<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
NEVADA POWER COMPANY
By:
--------------------
Name:
Title:
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<PAGE>
[Letterhead of Best Best & Krieger LLP]
September 15, 1998
Nevada Power Company
6226 West Sahara Avenue
Las Vegas, NV 89146
Ladies and Gentlemen:
We have acted as counsel to you, Nevada Power Company, a Nevada
corporation (the "Company"), in connection with the preparation and filing
with the Securities and Exchange Commission (the "Commission") of a
Registration Statement on Form S-3 (File Nos. 333-______ and 333-_______)
(the "Registration Statement"), under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the proposed issuance and sale of
$70,000,000 in aggregate principal amount of (i) the Company's Junior
Subordinated Deferrable Interest Debentures (the "Debentures"), issued
pursuant to an Indenture (the "Indenture") to be entered into between the
Company and IBJ Schroder Bank & Trust Company, as Trustee (the "Debenture
Trustee"), (ii) preferred securities (the "Preferred Securities") of NVP
Capital III, a trust formed under the laws of the State of Delaware (the
"Issuer"), and (iii) the Company's guarantee with respect to the Preferred
Securities (the "Guarantee") which will be issued pursuant to a Preferred
Securities Guarantee Agreement between the Company and the trustee thereunder
(the "Guarantee Agreement"). Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Registration
Statement.
We have examined the originals, photocopies or conformed copies of
all such records of the Company and all such agreements, certificates of
public officials, certificates of officers and representatives of the Company
and such other documents as we have deemed relevant and necessary as a basis
for the opinion hereinafter expressed. In such examinations, we have assumed
the genuineness of all signatures on original documents and the conformity to
the originals of all copies submitted to us as conformed copies or
photocopies. As to various questions of fact material to our opinion, we
have relied upon representations, statements or certificates of officers and
representatives of the Company, the Issuer and others. Based on the
foregoing, it is our opinion that:
(1) the Debentures, when (i) issued and duly executed and
authenticated in accordance with the terms of the Indenture, in the form
filed as Exhibit 4.1 to the Registration Statement (and assuming the due
authorization, execution and delivery of the
<PAGE>
Indenture by the Debenture Trustee), and (ii) delivered against payment
therefor, will be legally issued and will constitute binding obligations
of the Company.
(2) the Guarantee, when issued pursuant to the Guarantee Agreement,
in the form filed as Exhibit 4.6 of the Registration Statement (and
assuming the due authorization, execution and delivery of the Guarantee
Agreement by the trustee thereunder), will be legally issued and will
constitute a binding obligation of the Company.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not thereby concede that we are within the
category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations promulgated thereunder.
We are delivering this opinion to the Company, and no person other
than the Company may rely upon it without our prior written consent.
Very truly yours,
/s/ Best Best & Krieger LLP
BEST BEST & KRIEGER LLP
<PAGE>
[LETTERHEAD OF RICHARDS, LAYTON & FINGER]
September 15, 1998
NVP Capital III
c/o Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89146
Re: NVP CAPITAL III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Nevada Power Company,
a Nevada corporation (the "Company"), and NVP Capital III, a Delaware
business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust as filed with the office
of the Secretary of State of the State of Delaware on March 23, 1998;
(b) The Trust Agreement of the Trust, dated as of March 23, 1998,
between the Company and Delaware Trust Capital Management, Inc.;
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a Prospectus (the "Prospectus"), relating to the Trust
Issued Preferred Securities of the Trust representing undivided preferred
beneficial interests in the assets of the Trust (each, a "Preferred Security"
and collectively, the "Preferred Securities"), to be filed by the Company and
the Trust with the Securities and Exchange Commission; and
(d) A form of Amended and Restated Declaration of Trust for the
Trust, to be entered into between the Company, the trustees of the Trust
named therein, and the holders, from time to time, of the undivided
beneficial interests in the assets of such Trust (the "Declaration"),
attached as an exhibit to the Registration Statement.
<PAGE>
NVP Capital III
September 15, 1998
Page 2
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (d) above. In
particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (d) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that
is inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all of which we
have assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Declaration constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the
creation, operation and termination of the Trust, and that the Declaration
and the Certificate of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in
good standing of each party to the documents examined by us under the laws of
the jurisdiction governing its organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power
and authority to execute and deliver, and to perform its obligations under,
such documents, (v) the due authorization, execution and delivery by all
parties thereto of all documents examined by us, (vi) the receipt by each
Person to whom a Preferred Security is to be issued by the Trust
(collectively, the "Preferred Security Holders") of a Preferred Security
Certificate for such Preferred Security and the payment for such Preferred
Security, in accordance with the Declaration and the Registration Statement,
and (vii) that the Preferred Securities are issued and sold to the Preferred
Security Holders in accordance with the Declaration and the Registration
Statement. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.
<PAGE>
NVP Capital III
September 15, 1998
Page 3
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act.
2. The Preferred Securities when issued will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the Preferred
Security Holders may be obligated to make payments as set forth in the
Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of
the Securities and Exchange Commission thereunder. Except as stated above,
without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
<PAGE>
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
September 15, 1998
Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89146
NVP Capital III
c/o Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89146
Re: NVP Capital III Trust Issued Preferred Securities
Ladies and Gentlemen:
As special tax counsel to Nevada Power Company, a Nevada
corporation (the "Company"), and NVP Capital III, a Delaware business trust
(the "Issuer"), we have assisted in the preparation of the prospectus (the
"Prospectus") that forms a part of the registration statement on Form S-3
under the Securities Act of 1933 (the "Act"), as filed with the Securities
and Exchange Commission (the "Registration Statement"), in connection with
the proposed offering by the Issuer of 2,800,000 of its Trust Issued
Preferred Securities ($25 liquidation preference per preferred security), and
the proposed issuance by the Company to the Issuer of $70,000,000 aggregate
principal amount of its Junior Subordinated Deferrable Interest Debentures
due 2038. Unless otherwise defined herein, all terms used herein shall have
the meanings ascribed to them in the Prospectus.
We have examined and relied upon the Registration Statement and, in
each case as filed as an exhibit to the Registration Statement, (i) the form
of Amended and Restated Declaration of Trust of the Issuer among the Company,
as Sponsor, and the several trustees named therein, (ii) the form of
Indenture between the Company and IBJ Schroder Bank & Trust Company, as
Trustee, and (iii) the form of Preferred Securities Guarantee Agreement
between the Company, as Guarantor, and IBJ Schroder Bank & Trust Company, as
Preferred Guarantee Trustee.
Based on the foregoing and on our consideration of such other
information as we have deemed necessary and appropriate, we hereby confirm,
subject to the qualifications
<PAGE>
contained therein, our opinion as set forth in the Prospectus under the
heading "Certain Federal Income Tax Consequences."
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to our firm under the heading
"Certain Federal Income Tax Consequences" in the Prospectus. In giving such
consent, we do not thereby admit that we are included in the category or
persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Winthrop, Stimson, Putnam & Roberts
2
<PAGE>
NEVADA POWER COMPANY
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS)
<TABLE>
<CAPTION>
Twelve Months Ended Year Ended
June 30, December 31,
----------------------- --------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS:
Net Income 73,157 81,609 83,216 78,868 76,971 81,870 73,548
Taxes on Income 39,808 44,359 45,224 44,970 37,790 44,716 39,665
---------- ---------- ---------- ---------- ---------- ---------- ---------
Net Income Before Income Taxes 112,965 125,968 128,440 123,838 114,761 126,586 113,213
Fixed Charges 79,917 66,956 72,780 64,509 62,273 60,042 59,437
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total 192,882 192,924 201,220 188,347 177,034 186,628 172,650
---------- ---------- ---------- ---------- ---------- ---------- ---------
---------- ---------- ---------- ---------- ---------- ---------- ---------
FIXED CHARGES:
Interest Charges 78,858 65,959 71,798 63,548 61,466 58,839 58,699
One-third Annual Rentals 1,059 997 982 961 807 1,203 738
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total 79,917 66,956 72,780 64,509 62,273 60,042 59,437
---------- ---------- ---------- ---------- ---------- ---------- ---------
---------- ---------- ---------- ---------- ---------- ---------- ---------
12 MONTHS RATIO OF EARNINGS TO FIXED
CHARGES 2.41 2.88 2.76 2.92 2.84 3.11 2.90
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Nevada Power Company on Form S-3 of our reports dated February 13, 1998,
appearing in and incorporated by reference in the Annual Report on Form 10-K
of Nevada Power Company for the year ended December 31, 1997, and to the
reference to us under the heading "Experts" in the Prospectus, which is part
of this Registration Statement.
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
September 14, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (b) (2)
----------
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Alfred Bonanno, Assistant Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
NEVADA POWER COMPANY
(Exact name of obligor as specified in its charter)
Nevada 88-0045330
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6226 West Sahara Avenue
Las Vegas, Nevada 89146
(Address of principal executive office) (Zip code)
__% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE 2038
(Title of Securities)
--------------------------------
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B
Title of class Amount Outstanding
<S> <C>
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
2
<PAGE>
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, furnish the
following information:
(a) Title of the securities outstanding under each
such other indenture
Not Applicable
(b) A brief statement of the facts relied upon as a
basis for the claim that no conflicting interest
within the meaning of Section 310 (b) (1) of the
Act arises as a result of the trusteeship under
any such other indenture, including a statement as
to how the indenture securities will rank as
compared with the securities issued under such
other indenture.
Item 5. Interlocking directorates and similar relationships with the obligor
or underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner,
and executive officer of the obligor:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented
by amount given in
Col. C
<S> <C> <C> <C>
- ------------ ------------ ------------ ----------------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
3
<PAGE>
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and
each director, partner and executive officer of each such underwriter:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
<S> <C> <C> <C>
- ------------ ------------ ------------ ----------------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the obligor
owned beneficially or held as collateral security for obligations in
default by the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held securities
as collateral security represented by
for obligations in amount given in
default Col. C
<S> <C> <C> <C>
- ------------ ------------ ------------ ----------------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
4
<PAGE>
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of an underwriter
for the obligor, furnish the following information as
to each class of securities of such underwriter any of which
are so owned or held by the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held securities
as collateral security represented by amount
for obligations in given in Col. C
default
<S> <C> <C> <C>
- ------------ ------------ ------------ ----------------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 10. Ownership or holdings by the trustee of voting securities of certain
affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10 percent or more of the voting
securities of the obligor or (2) is an affiliate, other than a
subsidiary, of the obligor, furnish the following information as to
the voting securities of such person:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held securities
as collateral security represented by amount
for obligations in given in Col. C
default
<S> <C> <C> <C>
- ------------ ------------ ------------ ----------------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
5
<PAGE>
Item 11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the
knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to
each class of securities of such any of which are so owned or held by
the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
<S> <C> <C>
- ----------------------- -------------------- ---------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted
to the trustee, furnish the following information:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held securities
as collateral security represented by amount
for obligations in given in Col. C
default
<S> <C> <C> <C>
- ------------ ------------ ------------ ----------------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with
respect to the securities under this indenture.
Explain the nature of any such default.
Not Applicable
6
<PAGE>
(b) If the trustee is a trustee under another
indenture under which any other securities, or
certificates of interest or participation in any
other securities, of the obligor are outstanding,
or is trustee for more than one outstanding series
of securities under the indenture, state whether
there has been a default under any such indenture
or series, identify the indenture or series
affected, and explain the nature of any such
default.
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust Company
as amended to date. (See Exhibit 1A to Form T-1, Securities
and Exchange Commission File No. 22-18460).
*2. A copy of the Certificate of Authority of the Trustee to
Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as amended to
date (See Exhibit 4 to Form T-1, Securities and Exchange
Commission File No. 22-19146).
*4. A copy of the existing By-Laws of the Trustee, as amended to date
(See Exhibit 4 to Form T-1, Securities and Exchange Commission
File No. 22-19146).
7
<PAGE>
5. A copy of each Indenture referred to in Item 4, if the
Obligor is in default. Not Applicable.
6. The consent of the United States institutional trustee
required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a reference
to the copy of the Exhibit heretofore filed with the Securities and
Exchange Commission, to which there have been no amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its directors or
officers, the trustee has relied upon information furnished to it by the
obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items 1, 2
and 16 of this form since to the best knowledge of the trustee as indicated
in Item 13, the obligor is not in default under any indenture under which
the applicant is trustee.
8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, IBJ Schroder Bank & Trust
Company, a corporation organized and existing under the laws
of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City
of New York, and State of New York, on the 10th day of
September, 1998.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Alfred Bonanno
-----------------------------
Alfred Bonanno
Assistant Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, as amended, in connection with the proposed issue by Nevada Power
Company of its __% Junior Subordinated Deferrable Interest Debentures due
2038, we hereby consent that reports of examinations by Federal, State,
Territorial, or District authorities may be furnished by such authorities to
the Securities and Exchange Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Alfred Bonanno
---------------------------------------
Alfred Bonanno
Assistant Vice President
Dated: September 10, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (b) (2)
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S.Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Alfred Bonanno, Assistant Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
NVP CAPITAL III
(Exact name of obligor as specified in its charter)
Nevada To be applied for
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6226 West Sahara Avenue
Las Vegas, Nevada 89146
(Address of principal executive office) (Zip code)
__% TRUST ISSUED PREFERRED SECURITIES
(Title of Securities)
---------------------------------
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust
powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Col. A Col. B
Title of class Amount Outstanding
<S> <C>
- ---------------------------------------------------------------------------------
Not Applicable
</TABLE>
2
<PAGE>
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, furnish the following information:
(a) Title of the securities outstanding under
each such other indenture
Not Applicable
(b) A brief statement of the facts relied upon
as a basis for the claim that no conflicting
interest within the meaning of Section 310
(b) (1) of the Act arises as a result of the
trusteeship under any such other indenture,
including a statement as to how the
indenture securities will rank as compared
with the securities issued under such other
indenture.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers
of the trustee is a director, officer, partner, employee,
appointee, or representative of the obligor or of any
underwriter for the obligor, identify each such person having
any such connection and state the nature of each such
connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities
of the trustee owned beneficially by the obligor and each
director, partner, and executive officer of the obligor:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities
represented by
amount given in
Col. C
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
Not Applicable
Item 7. Voting securities of the trustee owned by underwriters or
their officials.
Furnish the following information as to the voting securities
of the trustee owned beneficially by each underwriter for the
obligor and each director, partner and executive officer of
each such underwriter:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities
represented by
amount given in
Col. C
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the
obligor owned beneficially or held as collateral security for
obligations in default by the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or securities
held as represented by
collateral amount given in
security for Col. C
obligations in
default
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Not Applicable
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral
security for obligations in default any securities of an
underwriter for the obligor, furnish the following information
as to each class of securities of such underwriter any of
which are so owned or held by the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or securities
held as represented by
collateral amount given in
security for Col. C
obligations in
default
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 10. Ownership or holdings by the trustee of voting securities
of certain affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral
security for obligations in default voting securities of a
person who, to the knowledge of the trustee (1) owns 10
percent or more of the voting securities of the obligor or (2)
is an affiliate, other than a subsidiary, of the obligor,
furnish the following information as to the voting securities
of such person:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or securities
held as represented by
collateral amount given in
security for Col. C
obligations in
default
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
5
<PAGE>
Item 11. Ownership or holdings by the trustee of any securities of
a person owning 50 percent or more of the voting securities of
the obligor.
If the trustee owns beneficially or holds as collateral
security for obligations in default any securities of a person
who, to the knowledge of the trustee, owns 50 percent or more
of the voting securities of the obligor, furnish the following
information as to each class of securities of such any of
which are so owned or held by the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
<S> <C> <C>
- ---------------------- -------------------- ------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is
indebted to the trustee, furnish the following information:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or securities
held as represented by
collateral amount given in
security for Col. C
obligations in
default
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with
respect to the securities under this indenture.
Explain the nature of any such default.
Not Applicable
6
<PAGE>
(b) If the trustee is a trustee under another
indenture under which any other securities,
or certificates of interest or participation
in any other securities, of the obligor are
outstanding, or is trustee for more than one
outstanding series of securities under the
indenture, state whether there has been a
default under any such indenture or series,
identify the indenture or series affected,
and explain the nature of any such default.
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe
each such affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign
trustee is authorized to act as sole trustee under indentures
qualified or to be qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust
Company as amended to date. (See Exhibit 1A to Form
T-1, Securities and Exchange Commission File No.
22-18460).
*2. A copy of the Certificate of Authority of the Trustee
to Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as
amended to date (See Exhibit 4 to Form T-1,
Securities and Exchange Commission File No.
22-19146).
*4. A copy of the existing By-Laws of the Trustee, as
amended to date (See Exhibit 4 to Form T-1,
Securities and Exchange Commission File No.
22-19146).
7
<PAGE>
5. A copy of each Indenture referred to in Item 4, if
the Obligor is in default. Not Applicable.
6. The consent of the United States institutional
trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements
of its supervising or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, IBJ Schroder Bank & Trust
Company, a corporation organized and existing under the laws
of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of
New York, and State of New York, on the 10th day of September,
1998.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Alfred Bonanno
---------------------------------
Alfred Bonanno
Assistant Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, as amended, in connection with the proposed issue by NVP Capital III of
its __% Trust Issued Preferred Securities, we hereby consent that reports of
examinations by Federal, State, Territorial, or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Alfred Bonanno
---------------------------------
Alfred Bonanno
Assistant Vice President
Dated: September 10, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (b) (2)
---------------------------
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S.Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Alfred Bonanno, Assistant Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
NEVADA POWER COMPANY
(Exact name of obligor as specified in its charter)
Nevada 88-0045330
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6226 West Sahara Avenue
Las Vegas, Nevada 89146
(Address of principal executive office) (Zip code)
GUARANTEE OF % NVP CAPITAL III TRUST ISSUED PREFERRED SECURITIES BY NEVADA POWER
COMPANY
(Title of Securities)
---------------------------------
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust
powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Col. A Col. B
Title of class Amount Outstanding
<S> <C>
- ---------------------------------------------------------------------------------
Not Applicable
</TABLE>
2
<PAGE>
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, furnish the following information:
(a) Title of the securities outstanding under
each such other indenture
Not Applicable
(b) A brief statement of the facts relied upon
as a basis for the claim that no conflicting
interest within the meaning of Section 310
(b) (1) of the Act arises as a result of
the trusteeship under any such other
indenture, including a statement as to how
the indenture securities will rank as
compared with the securities issued under
such other indenture.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers
of the trustee is a director, officer, partner, employee,
appointee, or representative of the obligor or of any
underwriter for the obligor, identify each such person having
any such connection and state the nature of each such
connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities
of the trustee owned beneficially by the obligor and each
director, partner, and executive officer of the obligor:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities
represented by
amount given in
Col. C
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
3
<PAGE>
Item 7. Voting securities of the trustee owned by underwriters or
their officials.
Furnish the following information as to the voting securities
of the trustee owned beneficially by each underwriter for the
obligor and each director, partner and executive officer of
each such underwriter:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities
represented by
amount given in
Col. C
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the
obligor owned beneficially or held as collateral security for
obligations in default by the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or securities
held as represented by
collateral amount given in
security for Col. C
obligations in
default
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
4
<PAGE>
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral
security for obligations in default any securities of an
underwriter for the obligor, furnish the following information
as to each class of securities of such underwriter any of
which are so owned or held by the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or securities
held as represented by
collateral amount given in
security for Col. C
obligations in
default
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 10. Ownership or holdings by the trustee of voting securities
of certain affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral
security for obligations in default voting securities of a
person who, to the knowledge of the trustee (1) owns 10
percent or more of the voting securities of the obligor or (2)
is an affiliate, other than a subsidiary, of the obligor,
furnish the following information as to the voting securities
of such person:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or securities
held as represented by
collateral amount given in
security for Col. C
obligations in
default
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
5
<PAGE>
Item 11. Ownership or holdings by the trustee of any securities of
a person owning 50 percent or more of the voting securities of
the obligor.
If the trustee owns beneficially or holds as collateral
security for obligations in default any securities of a person
who, to the knowledge of the trustee, owns 50 percent or more
of the voting securities of the obligor, furnish the following
information as to each class of securities of such any of
which are so owned or held by the trustee:
As of September 10, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
<S> <C> <C>
- ---------------------- -------------------- ------------
- -------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is
indebted to the trustee, furnish the following information:
As of September 10, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or securities
held as represented by
collateral amount given in
security for Col. C
obligations in
default
<S> <C> <C> <C>
- ----------- ------------- ------------ -----------------
- --------------------------------------------------------------------------------
Not Applicable
</TABLE>
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with
respect to the securities under this indenture.
Explain the nature of any such default.
Not Applicable
6
<PAGE>
(b) If the trustee is a trustee under another
indenture under which any other securities,
or certificates of interest or participation
in any other securities, of the obligor are
outstanding, or is trustee for more than one
outstanding series of securities under the
indenture, state whether there has been a
default under any such indenture or series,
identify the indenture or series affected,
and explain the nature of any such default.
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe
each such affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign
trustee is authorized to act as sole trustee under indentures
qualified or to be qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust
Company as amended to date. (See Exhibit 1A to Form
T-1, Securities and Exchange Commission File No.
22-18460).
*2. A copy of the Certificate of Authority of the Trustee
to Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as
amended to date (See Exhibit 4 to Form T-1,
Securities and Exchange Commission File No.
22-19146).
*4. A copy of the existing By-Laws of the Trustee, as
amended to date (See Exhibit 4 to Form T-1,
Securities and Exchange Commission File No.
22-19146).
7
<PAGE>
5. A copy of each Indenture referred to in Item 4, if
the Obligor is in default. Not Applicable.
6. The consent of the United States institutional
trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements
of its supervising or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, IBJ Schroder Bank & Trust
Company, a corporation organized and existing under the laws
of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of
New York, and State of New York, on the 10th day of September,
1998.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Alfred Bonanno
------------------------------
Alfred Bonanno
Assistant Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, as amended, in connection with the proposed issue by Nevada Power
Company of its Guarantee of Common NVP Capital III Securities, we hereby
consent that reports of examinations by Federal, State, Territorial, or
District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Alfred Bonanno
---------------------------------
Alfred Bonanno
Assistant Vice President
Dated: September 10, 1998
