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As filed with the Securities and Exchange Commission on December 18, 1996
Registration No. 333-17041
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT
NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SIERRA PACIFIC POWER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Nevada 88-0044418
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
P.O. Box 10100 (6100 Neil Road), Reno, Nevada 89520-0400, 702-689-4011
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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WILLIAM E. PETERSON, ESQ.
Senior Vice President and General Counsel
Sierra Pacific Power Company
P.O. Box 10100 (6100 Neil Road)
Reno, Nevada 89520-0400
(702) 689-4011
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
WILLIAM C. ROGERS, ESQ. DAVID C. CHAPIN, ESQ.
Choate, Hall & Stewart Ropes & Gray
53 State Street One International Place
Boston, Massachusetts 02109 Boston, Massachusetts 02110
(617) 248-5000 (617) 951-7000
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant 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 the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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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 State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PRELIMINARY PROSPECTUS DATED DECEMBER 18, 1996
SUBJECT TO COMPLETION
$35,000,000
SIERRA PACIFIC POWER COMPANY
COLLATERALIZED DEBT SECURITIES
______________________
Sierra Pacific Power Company (the "Company") may offer from time to time its
collateralized debt securities consisting of notes or other evidences of
indebtedness (the "Debt Securities") in an initial principal amount of
$35,000,000. The Debt Securities may be offered as separate series or tranches
in amounts, at prices and on terms to be determined in light of market
conditions at the time of sale and set forth in one or more Prospectus
Supplements or a pricing supplement thereto.
The terms of each series or tranche of Debt Securities, including, where
applicable, the specific designation, aggregate principal amount, authorized
denominations, maturity date or dates, interest rate or rates (which may be
fixed or variable) and time or times of payment of any interest, any terms for
optional or mandatory redemption or payment of additional amounts or any sinking
fund provisions, any initial public offering price, the net proceeds to the
Company and any other specific terms in connection with the offering and sale of
such series or tranche (the "Offered Securities") will be set forth in one or
more Prospectus Supplements or a supplement thereto; provided, however, that in
no event shall the interest rate (whether fixed or variable) on any Debt
Securities exceed the 9% interest rate on the underlying Mortgage Bonds (as
defined below) relating thereto. As used herein, Debt Securities shall only
include securities denominated in United States dollars and will not be issued
or payable in foreign or composite currencies.
The Debt Securities will be secured by one or more series of first mortgage
bonds (the "Mortgage Bonds") to be issued and pledged by the Company to Bankers
Trust Company, acting as trustee (the "Trustee") under the indenture for the
Debt Securities. The aggregate principal amount of the Debt Securities
outstanding and the aggregate premium thereon, if any, will not exceed the
aggregate principal amount of Mortgage Bonds pledged to and held by the
Trustee. The Mortgage Bonds will bear interest at times and in amounts
sufficient to provide for the payment of interest on the Debt Securities, and
the Mortgage Bonds also will be redeemed at times and in amounts that correspond
to the required payments of principal of and any premium on the Debt Securities.
Payments on the Debt Securities will satisfy payment obligations on the
underlying Mortgage Bonds relating thereto. See "Description of Debt
Securities--Security; Pledge of Mortgage Bonds" and "Description of Mortgage
Bonds".
The Debt Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. See
"Plan of Distribution". If any agents of the Company or any underwriters are
involved in the sale of any Debt Securities in respect of which this Prospectus
is being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to the Company from such a sale also will be set forth in a Prospectus
Supplement.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
___________________
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.___________________
The date of this Prospectus is December __, 1996
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Information regarding the Company's directors,
the remuneration paid to the Company's directors and officers, and interests of
management and others in certain transactions with the Company is disclosed in
reports filed by the Company with the Commission. The Company's parent, Sierra
Pacific Resources, is also subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information filed with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at 7 World Trade Center, 13th Floor, New York, New York 10048, and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission also
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission (http://www.sec.gov). This Prospectus does not contain all the
information set forth in the Registration Statement and exhibits thereto which
the Company has filed with the Commission under the Securities Act of 1933, as
amended (the "Act"), and to which reference is hereby made.
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INCORPORATION OF CERTAIN DOCUMENTS 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 made a
part hereof:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1995, including the Form 10-K/A amendment thereto;
2. The Company's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1996, June 30, 1996 and September 30, 1996; and
3. The Company's Current Reports on Form 8-K dated July 3, 1996
(relating to the termination of the Company's merger with The Washington
Water Power Company), dated August 2, 1996 (relating to the issuance of trust
originated preferred securities) and dated November 20, 1996, including the
Form 8-K/A amendment thereto (relating to the appointment of Deloitte &
Touche, L.L.P. as the Company's independent accountants, succeeding Coopers &
Lybrand L.L.P. who had previously served as the Company's independent
accountants).
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of this offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other
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subsequently filed document which also is or is deemed to be incorporated by
reference in this Prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon the
written or oral request of such person, a copy of any or all of the documents
which are incorporated by reference in this Prospectus, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents). Requests for such copies should be directed to Treasurer,
Sierra Pacific Power Company, P.O. Box 10100, Reno, Nevada 89520-0400,
telephone (702) 689-4011.
THE COMPANY
The Company is a public utility company which is engaged primarily in the
generation, purchase, transmission, distribution and sale of electric energy to
approximately 270,000 customers in a service territory of approximately 50,000
square miles located in western, central and northeastern Nevada, including the
cities of Reno, Sparks, Carson City and Elko, and eastern California, including
the Lake Tahoe area. The Company met its electric energy requirements for the
twelve months ended December 31, 1995 by utilizing coal generation (23%),
gas/oil generation (30%), purchased power (46%) and hydro power (1%). The
Company has no ownership interest in, nor does it operate, any nuclear
generating units and has no future plans to do so. The Company also provides
gas and water service to approximately 92,000 gas and 61,000 water customers in
the cities of Reno and Sparks and environs. No material part of any of the
Company's business segments is dependent upon a single customer.
The Company is a subsidiary of Sierra Pacific Resources ("Resources"),
which owns all of the Company's outstanding common stock. In June, 1994, the
Company, Resources, and The Washington Water Power Company ("WWP") entered
into an Agreement and Plan of Reorganization and Merger, as subsequently
amended (the "Merger Agreement"), which provided for the merger of the
Company, Resources and WWP into Altus Corporation ("Altus"). WWP is a
combined electric and gas utility, with headquarters in Spokane, Washington.
Although the parties to the merger had received all of the necessary
approvals from their respective shareholders, the merger was still under
review by the Federal Energy Regulatory Commission when, on June 28, 1996,
WWP notified Resources and the Company that it was terminating the Merger
Agreement in accordance with its terms. As a result of the termination of
the Merger Agreement, the Company is continuing to operate as a separate
utility.
The principal executive offices of the Company are located at 6100 Neil Road
(P.O. Box 10100), Reno, Nevada 89520-0400, telephone (702) 689-4011.
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APPLICATION OF PROCEEDS
The net proceeds from the sale of the Debt Securities offered hereby will be
used for general corporate purposes including, but not limited to, the
acquisition of property, the construction, completion, extension or improvement
of facilities, or the refinancing or discharge or refunding of obligations,
including short-term borrowings. Pending the uses described above, the proceeds
from the sale of the Debt Securities offered hereby will be invested in short-
term investments.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of the
Company for each of the years 1991 through 1995 and the twelve months ended
September 30, 1996.
Year Ended December 31,
------------------------------------------- Twelve Months
Ended
September 30,
1991 1992 1993 1994 1995 1996
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2.62 2.81 2.94 3.09 3.54 3.90
For the purpose of computing the Company's ratios of earnings to fixed
charges, "earnings" represent the aggregate of net income, taxes on income and
fixed charges. The Company's earnings used in the calculation of the ratios of
earnings to fixed charges include the allowance for funds used during
construction. "Fixed charges" represent interest on short-term and long-term
debt, the interest portion on capital leases and amortization of bond premiums,
discounts and expenses, excluding amortization of the net gain or loss on
reacquired mortgage bonds.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under the Collateral Trust Indenture,
dated as of June 1, 1992, as supplemented in connection with the issuance and
sale of the Debt Securities (the "Indenture"), between the Company and Bankers
Trust Company, in its capacity as Trustee, which Indenture is an exhibit to the
Registration Statement of which this Prospectus is a part. The statements under
this caption are summaries of certain provisions of the Indenture, do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the Indenture, including the
definitions therein of certain terms. Wherever particular sections of the
Indenture or terms that are defined in the Indenture are referred to herein or
in a Prospectus Supplement, it is intended that such sections or defined terms
shall be incorporated by reference herein or therein, as the case may be.
The term "Securities", as used under this caption, refers to all Securities
issued under the Indenture and includes the Debt Securities. Unless the context
otherwise requires, the term "series or tranche" as used in this Prospectus
means, with respect to each series of Securities, such series or, if one or more
tranches have been issued within such series, a tranche.
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GENERAL
The Debt Securities may be issued from time to time in one or more series
and in one or more tranches. The particular terms of each series or tranche of
Debt Securities will be described in one or more Prospectus Supplements, or a
pricing supplement thereto, relating to such series or tranche.
The Indenture does not limit the aggregate amount of Securities that may be
issued thereunder, and Securities may be issued thereunder from time to time in
separate series up to the aggregate amount from time to time authorized by the
Company for each series. For a description of the security for the Securities,
see "Security; Pledge of Mortgage Bonds" below and "Description of Mortgage
Bonds".
The applicable Prospectus Supplement, or a pricing supplement thereto, will
describe the following terms of the Offered Securities: (1) the title of the
Offered Securities; (2) any limit on the aggregate principal amount of the
Offered Securities; (3) the date or dates on which the Offered Securities will
mature; (4) the rate or rates at which the Offered Securities will bear
interest, if any, or the formula pursuant to which such rate or rates will be
determined, and the date or dates from which any such interest will accrue;
provided that in no event shall the interest rate (whether fixed or variable) on
the Offered Securities exceed the 9% interest rate on the underlying Mortgage
Bonds relating thereto; (5) the Interest Payment Dates on which any such
interest on the Offered Securities will be payable and the Regular Record Date
for any interest payable on any Offered Securities on any Interest Payment Date;
(6) the person to whom any interest on any Registered Security of the series
will be payable if other than the person in whose name such Registered Security
is registered at the close of business on the Regular Record Date for such
interest as described under "Payment and Paying Agents" below; (7) any mandatory
or optional sinking fund, redemption or analogous provisions; (8) each office or
agency where, subject to the terms of the Indenture as described below under
"Payment and Paying Agents", the principal of (and premium, if any) and interest
on the Offered Securities will be payable and each office or agency where,
subject to the terms of the Indenture as described below under "Form, Exchange,
Registration and Transfer", the Offered Securities may be presented for
registration of transfer or exchange; (9) the date, if any, after which, and the
price or prices at which, the Offered Securities may be redeemed, in whole or in
part at the option of the Company, or pursuant to mandatory redemption
provisions, and the other detailed terms and provisions of any such optional or
mandatory redemption provisions; (10) the denominations in which any Offered
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (11) any index or indices used to determine the
amount of payments of principal of (and premium, if any) and interest on the
Offered Securities; (12) the portion of the principal amount of the Offered
Securities, if other than the entire principal amount thereof, payable upon
acceleration of maturity thereof; (13) the Person who shall be the Security
Registrar for Offered Securities; (14) any deletions or modifications of or
additions to the Events of Default or covenants set forth in the Indenture;
(15) any Paying Agent or Authenticating Agent; (16) whether the Securities of
the series shall be issued in whole or in part in the form of one or more Global
Security or book-entry security or securities and, if so, the depositary for
such Global Security or book-entry security or securities; (17) the Mortgage
Bonds (or additional Mortgage Bonds) granted to secure the Offered Securities of
the series or tranche, and the designation of the portion of the Mortgage Bonds
which shall be Designated Mortgage Bonds (as defined below); (18) any defeasance
provisions applicable to
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the Offered Securities of the series or tranche; and (19) any other terms of the
series or tranche (which terms shall not be inconsistent with the provisions of
the Indenture). (Section 301)
Securities may be issued as Original Issue Discount Securities to be sold
at a discount below their principal amount. Special United States federal
income tax considerations applicable to Securities issued at an original issue
discount, including Original Issue Discount Securities, are described under
"Certain United States Federal Income Tax Consequences - Original Issue
Discount". The applicable Prospectus Supplement, or a pricing supplement
thereto, will provide additional information regarding the original issue
discount aspects of such Securities.
SECURITY; PLEDGE OF MORTGAGE BONDS
GENERAL. In order to secure by the lien of the Mortgage Indenture (as
defined below) the obligation of the Company to pay the principal of (and
premium, if any) and interest on any series or tranche of the Securities, the
Company will issue, pledge and deliver to the Trustee, in trust for the ratable
benefit of the Holders of such series or tranches, Mortgage Bonds, which
Mortgage Bonds will be issued pursuant to that certain Indenture of Mortgage,
dated as of December 1, 1940 (the "Mortgage Indenture"), between the Company and
The New England Trust Company (State Street Bank and Trust Company, as successor
trustee) and Leo W. Huegle (Gerald R. Wheeler, as successor trustee) (the
"Mortgage Trustees"). (Section 401(a)) The aggregate principal amount of the
Securities outstanding and maximum aggregate amount of premium thereon, if any,
will not exceed the aggregate principal amount of Mortgage Bonds pledged with
and held by the Trustee. The Mortgage Bonds will bear interest at times and in
amounts sufficient to provide for the payment of interest on the Securities and
also will be redeemed at times and in amounts that correspond to the required
payments of principal of and any premium on the Securities. Payments on the
Securities will satisfy payment obligations on the underlying Mortgage Bonds
relating thereto. The Mortgage Bonds will be secured by a first mortgage lien
on certain property owned by the Company and will rank on a parity with all
other first mortgage bonds of the Company. As of September 30, 1996, the
Company had outstanding $571.4 million aggregate principal amount of first
mortgage bonds. See "Description of Mortgage Bonds".
PLEDGE OF MORTGAGE BONDS. The Company will from time to time issue and
deliver to and pledge with the Trustee, for the benefit of the Holders of each
series or tranche of the Securities, Mortgage Bonds in an aggregate principal
amount such that the aggregate principal amount of Mortgage Bonds then being
delivered to the Trustee pursuant to the Indenture is equal to or greater than
the aggregate principal amount (or, in the case of Original Issue Discount
Securities, the aggregate principal amount thereof due and payable at the Stated
Maturity thereof) of, plus the maximum aggregate amount of any premium on, the
series or tranche of Securities then being delivered to the Trustee or an
Authenticating Agent for authentication pursuant to the Indenture. Such pledge
becomes effective upon issuance of such series or tranche and satisfaction of
other conditions and is effective to the extent the amounts to be payable on
such Mortgage Bonds do not exceed the amounts stated to be payable on such
Securities. (Section 401)
The Indenture provides that the Company will not issue and deliver
Securities of any series or tranche to the Trustee or an Authenticating Agent
for authentication, and the Trustee
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or such Authenticating Agent will not authenticate Securities of any series,
unless the Company has delivered to the Trustee or such Authenticating Agent a
Company Order, pursuant to which the Company designates with respect to such
series or tranche Designated Mortgage Bonds, which designation, subject to
certain provisions relating to the surrender of the Designated Mortgage Bonds,
shall remain in effect to the extent that the series or tranche of Securities
with respect to which the Designated Mortgage Bonds have been so designated
remain outstanding. (Section 401(d)) For purposes of the foregoing,
"Designated Mortgage Bonds", with respect to any series or tranche of
Securities, means an aggregate principal amount of Mortgage Bonds held by (or
then being delivered to) and pledged with the Trustee, not designated at the
time with respect to Outstanding Securities, equal to the aggregate principal
amount (or, in the case of Original Issue Discount Securities, the aggregate
principal amount thereof due and payable at the Stated Maturity thereof) of,
plus the maximum aggregate amount of any premium on, the Securities of such
series or tranche issued and delivered by the Company to the Trustees or an
Authenticating Agent for authentication pursuant to the Indenture.
If at any time the principal, premium if any and interest due on any
Security is paid in full, the principal of a corresponding amount of the
Designated Mortgage Bonds designated in connection with the issue of such
Security shall cease to be a Designated Mortgage Bond.
SATISFACTION OF PAYMENT OBLIGATION ON MORTGAGE BONDS. The interest rate on
each series of Mortgage Bonds will be as specified in the applicable Prospectus
Supplement or a pricing supplement thereto. The Indenture provides that the
obligation of the Company to make any payment of the principal of (and premium,
if any) or interest on the Designated Mortgage Bonds will be deemed to have been
satisfied and discharged to the extent that at the time any such payment shall
be due, the then due principal of (and premium, if any) or interest on the
Securities to which such Designated Mortgage Bonds relate, shall have been paid,
deemed to have been paid or otherwise satisfied and discharged. In addition,
such obligation to make any payment of the principal of (and premium, if any) or
interest on the Designated Mortgage Bonds at any time shall be deemed to have
been satisfied and discharged to the extent that the amount of the Company's
obligation to make any payment of the principal of (and premium, if any) or
interest on the Designated Mortgage Bonds exceeds the obligation of the Company
at that time to make any payment on the applicable Redemption Date or Stated
Maturity of the principal of (and premium, if any) or interest on the Securities
to which such Designated Mortgage Bonds relate. The obligation of the Company
to make any payment of the principal of (and premium, if any) or interest on the
Mortgage Bonds other than Designated Mortgage Bonds shall be deemed to have been
satisfied and discharged in full at the time any such payment shall be stated to
be due. (Section 403(a))
REDEMPTION OF MORTGAGE BONDS. The Company covenants and agrees in the
Indenture that upon the required payment of principal or premium, if any,
becoming due and payable with respect to any Securities upon Stated Maturity or
redemption, it will redeem the Designated Mortgage Bonds relating to such
Securities in an aggregate principal amount equal to the amount becoming due and
payable on such Securities, plus accrued interest; provided, however, that the
Company's obligation to redeem such Designated Mortgage Bonds will be deemed to
have been satisfied and discharged to the extent that at the time any such
payment shall be due, the then due aggregate principal amount of the Securities
to which such Designated Mortgage Bonds relate, plus the aggregate amount of any
premium on, or
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accrued interest to the redemption date for, such Securities shall have been
paid, deemed to have been paid or otherwise satisfied and discharged. Except
for such redemption and any redemption required under the Mortgage Indenture in
the event that all or substantially all of the electric properties of the
Company are sold to or taken through the exercise of the right of eminent domain
or the right to purchase by any municipal or governmental body or agency, the
Company covenants that it will not redeem the Mortgage Bonds or take any action
that will result in the Mortgage Indenture Trustees incurring an obligation to
redeem any Mortgage Bonds. (Section 404)
The Trustee will, upon request of the Company, surrender to the Mortgage
Trustees for cancellation Mortgage Bonds in an aggregate principal amount equal
to the aggregate principal amount of any other Mortgage Bonds delivered to and
pledged with the Trustee pursuant to the Indenture in exchange therefor;
provided that the Mortgage Bonds so delivered to and pledged with the Trustee
(a) contain no provisions that would impair the benefit of the lien of the
Mortgage Indenture in favor of the holders of the Outstanding Securities, and
(b) have the same terms as the Mortgage Bonds so surrendered. (Section 406(b))
From time to time upon request of the Company, the Trustee will surrender
to the Mortgage Trustees for cancellation Mortgage Bonds other than Designated
Mortgage Bonds held by the Trustee pursuant to the Indenture. (Section 406(c))
FORM, EXCHANGE, REGISTRATION AND TRANSFER
The Securities will be issuable only in fully registered form. Securities
of a series or tranche may be represented, in whole or in part, by one or more
permanent Global Securities in a denomination or aggregate denominations equal
to the portion of the aggregate principal amount of Outstanding Securities of
the series or tranche to be represented by such Global Security or Securities.
Any such Global Security deposited with a Depositary or its nominee identified
in the applicable Prospectus Supplement or pricing supplement thereto and
bearing the legend required by the Indenture may not be surrendered for
registration of transfer or for exchange except by the Depositary for such
Global Security or any nominee of such Depositary, except if the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary,
or the Depositary ceases to be qualified as required by the Indenture, or the
Company instructs the Trustee in accordance with the Indenture that such Global
Security shall be so registrable and exchangeable, or there shall have occurred
and be continuing an Event of Default with respect to the Securities evidenced
by such Global Security, or there shall exist such other circumstances, if any,
as may be specified in the applicable Prospectus Supplement. (Sections 203,
204, 301 and 305)
The specific terms of the depository arrangement with respect to any
portion of a series or tranche of Securities to be represented by one or more
Global Securities will be described in the applicable Prospectus Supplement or
pricing supplement thereto. Beneficial interests in Global Securities will only
be evidenced by, and transfers thereof will only be effected through, records
maintained by the Depositary and the institutions that are participants in the
Depositary.
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities, Securities of any series or tranche
will be exchangeable for
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other Securities of the same series of any authorized denominations and of a
like aggregate principal amount and tenor. (Section 305)
Securities may be presented for exchange as provided above and for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Trustee or at the office of any transfer agent
designated by the Company for such purpose with respect to any tranche or series
of Securities and referred to in an applicable Prospectus Supplement or pricing
supplement thereto, without service charge and upon payment of any taxes and
other governmental charges as described in the Indenture. Such transfer or
exchange will be effected upon the Trustee or such transfer agent, as the case
may be, being satisfied with the documents of title and identity of the person
making the request. If a Prospectus Supplement or pricing supplement thereto
refers to any transfer agents (in addition to the Trustee) initially designated
by the Company with respect to any series or tranche of Securities, the Company
may at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent (or Trustee) acts.
The Company may at any time designate additional transfer agents with respect to
any series or tranche of Securities. (Sections 305 and 1102)
The Company shall not be required to: (i) issue, register the transfer
of or exchange Securities of any series or tranche during a period beginning
at the opening of business 15 days before any selection of Securities of that
series or tranche to be redeemed and ending at the close of business on the
day of mailing of the relevant notice of redemption or (ii) register the
transfer of or exchange any Security, or portion thereof, called for
redemption, except the unredeemed portion of any Security being redeemed in
part. (Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement or a
pricing supplement thereto, payment of principal of (and premium, if any) and
interest on Securities will be made at the office of the Trustee, except that at
the option of the Company payment of any interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register. If any interest payment is to be made by wire transfer, the
Trustee must receive wire payment instructions from the holder by the Regular
Record Date for such interest payment. Unless otherwise indicated in an
applicable Prospectus Supplement or a pricing supplement thereto, payment of any
installment of interest on Securities will be made to the Person in whose name
such Security is registered at the close of business on the Regular Record Date
for such interest. (Sections 301 and 307)
Unless otherwise indicated in an applicable Prospectus Supplement or a
pricing supplement thereto, the corporate trust office of the Trustee in The
City of New York will be designated as the Company's sole Paying Agent for
payments with respect to Offered Securities. Any other Paying Agents initially
designated by the Company for the Offered Securities will be named in an
applicable Prospectus Supplement or a pricing supplement thereto. The Company
may at any time designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that the Company will be required to maintain a Paying Agent
in each Place of Payment for each series of Securities.
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All moneys paid by the Company to a Paying Agent or held by the Company in
trust for the payment of principal of (and premium, if any) or interest on any
Security, which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable, will be discharged from
trust and repaid to the Company, and the Holder of such Security or any coupon
will thereafter look only to the Company for payment thereof. (Section 1103)
SATISFACTION AND DISCHARGE OF THE INDENTURE AND THE SECURITIES
The Indenture will cease to be of further effect, and the Trustee shall
execute instruments acknowledging satisfaction and discharge of the Indenture
and shall pay, or assign or transfer and deliver, the Trust Estate held by it as
security for the Securities remaining, when (1) either (a) all Securities
authenticated and delivered (other than certain specified Securities) have been
delivered for cancellation; or (b) all such Securities have become or will
become within one year due and payable, or are to be called for redemption
within one year under arrangements satisfactory to the Trustee, and the Company
has deposited or caused to be deposited in trust with the Trustee funds
sufficient to pay and discharge the entire indebtedness on such Securities for
principal (and premium, if any) and interest to the date of such deposit (in the
case of Securities that have become due and payable) or to their Stated Maturity
or Redemption Date, as the case may be; (2) the Company has paid or caused to be
paid all other sums payable by it under the terms of the Indenture; and (3) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for in the
Indenture relating to the satisfaction and discharge of the Indenture have been
complied with. (Section 501)
Unless otherwise provided in the Indenture or other instrument creating a
series or tranche of Securities, the Company shall be deemed to have paid and
discharged the indebtedness on all the Outstanding Securities of each tranche of
such series and the Trustee shall execute instruments acknowledging the
satisfaction and discharge of such indebtedness and shall pay, or assign or
transfer and deliver to the Company the Designated Mortgage Bonds which have
been held as security for the Securities of such series or tranche if (1) either
(a) with respect to all Outstanding Securities of such series or tranche (i) the
Company has irrevocably deposited or caused to be deposited with the Trustees an
amount sufficient to pay and discharge the entire indebtedness on all
Outstanding Securities of such series or tranche for principal (and premium, if
any) and interest to the Stated Maturity or any Redemption Date, as the case may
be; or (ii) the Company has irrevocably deposited or caused to be deposited with
the Trustee such amount of direct noncallable obligations of, or noncallable
obligations the payment of principal of and interest on which is fully
guaranteed by, the United States of America maturing as to principal and
interest in such amounts and at such times as will, without consideration of any
reinvestment thereof, be sufficient to pay and discharge the entire indebtedness
on all Outstanding Securities of such series or tranche for principal (and
premium, if any) and interest to the Stated Maturity or any Redemption Date, as
the case may be; or (b) the Company has properly fulfilled such other means of
satisfaction and discharge as are specified in the supplemental indenture or
other instrument creating such series or tranche; (2) the Company has paid or
caused to be paid all other sums payable with respect to the Outstanding
Securities of such series or tranche; (3) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for in the Indenture relating to the
satisfaction and discharge of the entire indebtedness on all Outstanding
Securities of any such series or tranche have
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been complied with and, if required by Section 314 of the Trust Indenture Act, a
certificate or opinion of an engineer, appraiser, or other expert appointed by
the Company as to the fair value of the Trust Estate to be released from the
lien of the Indenture, which certificate or opinion shall state that in the
opinion of the person making the same, such release will not impair the security
under the Indenture in contravention of the provisions thereof; and (4) the
Trustee has received an opinion of tax counsel to the effect that such deposit
and discharge will not cause the Holders of the Outstanding Securities of such
series to recognize income, gain or loss for federal income tax purposes and
that the Holders will be subject to federal income tax in the same amounts, in
the same manner and at the same times as would have been the case if such
deposit and discharge had not occurred. Upon such discharge, the Company will
be deemed to have satisfied all the obligations under the Indenture, except for
obligations with respect to registration of transfer and exchange of the
Outstanding Securities of such series, and the rights of the Holders to receive
from deposited funds payment of the principal of (and premium, if any) and
interest, if any, on the Outstanding Securities of such series. (Section 503)
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Securities of any series: (a) failure to pay any
interest on any Security of that series when due, continued for 60 days; (b)
failure to pay principal of (or premium, if any, on) any Security of that series
when due; (c) failure to deposit any sinking fund payment or analogous
obligation, when due, in respect of any Security of that series and continuance
of such default for 60 days; (d) failure to perform any other covenant or
warranty of the Company in the Indenture (other than a covenant or warranty
included in the Indenture solely for the benefit of a series of Securities other
than that series), continued for 60 days after written notice as provided in the
Indenture; (e) certain events of bankruptcy, insolvency or reorganization
involving the Company; (f) the occurrence of an event of default under the
Mortgage Indenture, provided that, the waiver or cure of any such event of
default and the rescission and annulment of the consequences thereof shall
constitute a waiver of the corresponding Event of Default under the Indenture
and a rescission and annulment of the consequences thereof; and (g) any other
Event of Default provided in an indenture supplemental thereto. (Section 601)
Unless the Trustee holds more than 25% of the outstanding Mortgage Bonds
under the Mortgage Indenture, it cannot, without the concurrence of other
holders of first mortgage bonds, force a declaration of "default" under the
Mortgage Indenture or acceleration of the Mortgage Bonds. See "Description of
Mortgage Bonds - Defaults".
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, either the Trustees or the Holders of at
least 25% in aggregate principal amount of the Outstanding Securities of that
series by notice as provided in the Indenture may declare the principal amount
(or, if the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all the Securities of that series to be due and payable immediately.
At any time after a declaration of acceleration with respect to Securities of
any series has been made, but before a judgment or decree for payment of money
has been obtained by the Trustees, and subject to applicable law and certain
other provisions of the Indenture, the
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Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. (Section 602)
The Indenture provides that, if a default occurs with respect to the
Securities of any series, the Trustee shall give notice of default to the
Holders of the Securities of such series within 90 days after receipt by the
Trustee of written notice of such occurrence as and to the extent provided in
the Trust Indenture Act; provided, however, that in the case of any default
referred to in clause (d) of the third preceding paragraph with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. (Section 702)
Upon the occurrence of an Event of Default with respect to Securities of
any series, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities of such series by all
appropriate judicial proceedings, including the rights of the Trustee as the
holder of the Mortgage Bonds; provided, however, the Trustee shall not have the
power to sell the Mortgage Bonds. (Section 603)
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the 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 Trustee reasonable indemnity. (Sections 701 and 703) Subject to
such provisions for the indemnification of the Trustee, and subject to
applicable law and certain other provisions of the Indenture, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series will 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 Securities of that
series. (Section 612)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1108)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series,
considered as one class; provided, however, if less than all of the series of
Outstanding Securities are directly affected by such amendment or modification,
then the consent only of the Holders of a majority in aggregate principal amount
of Outstanding Securities of all series so directly affected, considered as one
class, will be required; and provided, further, that if the Outstanding
Securities of any series have been issued in more than one tranche and if the
proposed amendment or modification directly affects the rights of the Holders of
one or more, but less than all, such tranches, then the consent only of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of all tranches (including each tranche which is the only tranche of
Outstanding Securities in a series) so directly affected, considered as one
class, will be required; and provided, further, that no such amendment or
modification may, without the consent of each Holder of the Outstanding
Securities of each series or tranche directly affected thereby,
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(a) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security, (b) reduce the principal amount of,
or premium or interest on, any Security, (c) reduce the amount of principal of
an Original Issue Discount Security payable upon acceleration of the Maturity
thereof, (d) permit the creation of any lien ranking prior to the lien of the
Mortgage Indenture with respect to all or substantially all of the property
subject thereto or deprive such Holder of the benefit of the security of the
lien of the Mortgage Indenture, (e) change the Place of Payment where, or the
coin or currency in which, any Security or any premium or interest thereon is
payable, (f) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity of any Security (or, in the case of
redemption, on or after the Redemption Date), (g) reduce the percentage and
principal amount of the Outstanding Securities of any series or tranche, the
consent of whose Holders is required in order to take certain actions or modify
any of the above provisions or (h) alter, amend or modify Article Four of the
Indenture. (Section 1002(1) and (2))
The Holders of at least 66 2/3% in aggregate principal amount of the
Outstanding Securities of each series or tranche may, on behalf of the Holders
of all the Securities of that series or tranche, waive, insofar as that series
or tranche is concerned, compliance by the Company with certain restrictive
provisions of the Indenture. (Section 1109) The Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of each
series or tranche may, on behalf of all Holders of Securities of that series or
tranche, waive any past default and its consequences under the Indenture with
respect to Securities of that series or tranche, except a default (a) in the
payment of principal of (or premium, if any) or any interest on any Security of
such series or tranche or (b) in respect of a covenant or provision of the
Indenture that cannot be modified or amended without the consent of the Holder
of each Outstanding Security affected thereby. (Section 613)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver thereunder or
whether a quorum is present at a meeting of Holders of Securities or the number
of votes entitled to be cast by the Holder of any Security (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof, and (ii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Securities under the Indenture, may consolidate or merge with or into, or
transfer or lease its properties and assets substantially as an entirety to, any
Person that is a corporation, partnership or trust organized and validly
existing under the laws of any domestic jurisdiction, or may permit any such
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,
provided that (a) any successor Person assumes the Company's obligations on the
Securities and under the Indenture, (b) after giving effect to the 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 occurred and be continuing, (c) in
the case of any lease, such lease will be expressly subject to
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termination by the Company or by the Trustee at any time during the continuance
of an Event of Default, and (d) certain other conditions are met. (Section 901)
NOTICES
Except as otherwise provided in the Indenture, notices to Holders of
Securities will be given by mail to the addresses of such Holders as they appear
in the Security Register. (Section 106)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
treat the registered owner of any Security as the absolute owner thereof
(whether or not such Security shall be overdue and notwithstanding any notice to
the contrary) for the purpose of making payment and for all other purposes.
(Section 308)
GOVERNING LAW
The Indenture and the Securities will be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws thereof. (Section 113)
CONCERNING THE TRUSTEE
Bankers Trust Company will be the Trustee under the Indenture. Bankers
Trust Company also acts as issuing and paying agent with respect to the
Company's commercial paper program.
DESCRIPTION OF MORTGAGE BONDS
The following summarizes certain provisions of the Mortgage Indenture and
the Mortgage Bonds, and reference is made to the Mortgage Indenture in its
entirety for the detailed provisions thereof.
GENERAL
In order to secure by the lien of the Mortgage Indenture the obligation of
the Company to pay the principal of (and premium, if any) and interest on any
series or tranche of the Securities in accordance with the terms thereof, the
Company will from time to time issue and deliver to and pledge with the Trustee,
in trust for the ratable benefit of the Holders of such series or tranche, one
or more series of Mortgage Bonds. For additional information concerning the
pledge of the Mortgage Bonds with the Trustee, see "Description of Debt
Securities--Security; Pledge of Mortgage Bonds".
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SINKING OR IMPROVEMENT FUNDS
No series of the Mortgage Bonds will be entitled to the benefits of any
sinking fund provision unless applicable specifically to the Mortgage Bonds.
Such provisions are in effect with respect to certain other series of first
mortgage bonds outstanding under the Mortgage Indenture.
KIND AND PRIORITY OF LIEN
The Mortgage Bonds will be secured, equally and ratably with all first
mortgage bonds of other series now or hereafter outstanding, by a first lien on
substantially all properties and franchises owned by the Company at October 31,
1940 and on property and franchises subsequently acquired which in each case are
used or useful in the business of furnishing electricity, water or gas, or in
any business incidental thereto or operated in connection therewith, except
properties released pursuant to the Mortgage Indenture and except certain
property in Nevada acquired after the filing of the Thirty-fifth Supplemental
Indenture with respect to the Mortgage Bonds, and before the filing of a
supplemental indenture specifically subjecting such property to such lien;
subject, however, to the lien of the Trustees for their compensation, expenses
and advances, to certain permitted liens, and to liens on after acquired
property existing at the time of acquisition or created in connection with the
purchase thereof. There are specifically excepted from the lien of the Mortgage
Indenture certain current assets, including accounts receivable, securities and
other personal property; timber; oil and other minerals; certain other property
owned at October 31, 1940; and all property subsequently acquired, not used or
useful to the Company in its utility business.
ISSUANCE OF ADDITIONAL FIRST MORTGAGE BONDS AND WITHDRAWAL
OF CASH DEPOSITED AGAINST SUCH ISSUANCE
The maximum principal amount of first mortgage bonds which may be issued
under the Mortgage Indenture is not limited. Additional first mortgage bonds
of any series may be issued from time to time on the basis of (1) 60% of a
net amount of additional public utility property not theretofore funded
(i.e., gross property additions, including the Company's interest in jointly
owned property, less the excess of aggregate retirements over any credit for
substitution); (2) retirement of first mortgage bonds, not theretofore
funded; and (3) deposit of cash. With certain exceptions, the issuance of
first mortgage bonds is subject to net earnings available for interest for 12
consecutive months out of the preceding 15 months being at least 2 times the
annual interest requirements on all first mortgage bonds and all prior lien
debt to be outstanding. Cash deposited with the Trustee pursuant to (3)
above may be withdrawn in amounts equal to the amount of first mortgage bonds
issuable under (1) or (2) above or be applied to the retirement of first
mortgage bonds of any series. For the 12 months ended September 30, 1996,
the net earnings available for interest were 3.68 times such annual interest
requirements, which would permit the issuance of approximately $481.54
million principal amount of additional first mortgage bonds (after giving
effect to the issuance of the Mortgage Bonds) assuming the annual interest on
such additional first mortgage bonds is equal to 7.48%.
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THE TRUSTEES
The written request of the holders of a majority of the aggregate
outstanding principal amount of the first mortgage bonds is necessary to require
the Trustees to exercise any remedy under the Mortgage Indenture; the Trustees
are entitled to receive reasonable indemnity and under certain circumstances are
not required to act.
DEFAULTS
A default is defined as (a) failure to pay interest for 90 days after
becoming due, (b) failure to pay principal when due, (c) failure to pay
principal or interest on any prior lien debt or satisfy any covenant or
condition in the instrument evidencing or securing any such prior lien debt if
any right of foreclosure or right of entry or of sale shall have arisen, (d)
failure for 90 days after notice to observe any other covenants or conditions,
including sinking fund obligations, in the Mortgage Indenture, (e) adjudication
of the Company as a bankrupt, entry of an order approving a reorganization
petition or appointment of a trustee or receiver in certain proceedings and the
continuance of such adjudication, order or appointment for 90 days, and (f) the
Company's admission of its inability to pay its debts, the Company's making of
an assignment for the benefit of creditors, or certain petitions or consents in
bankruptcy, insolvency or reorganization proceedings.
In addition, the Thirty-fifth Supplemental Indenture provides that if any
of the following events of default occurs under the Indenture, it shall be
deemed to be a default under the Mortgage Indenture as hereafter provided: (i)
default in the payment of any interest upon any Security when such interest
becomes due and payable shall be deemed to be a default in the due and punctual
payment of a like amount of interest on the Mortgage Bonds, (ii) default in the
payment of the principal of (or premium, if any, on) any Security at the stated
maturity thereof or upon redemption thereof shall be deemed to be a default in
the due and punctual payment of a like amount of principal of the Mortgage
Bonds, (iii) default in the deposit of any sinking fund payment when and as due
by the terms of a Security shall be deemed to be a default under the Mortgage
Indenture, (iv) a default in the performance, or breach, of any covenant or
warranty of the Company as described in Section 601(4) of the Indenture shall be
deemed to be a default under the Mortgage Indenture, (v) the occurrence of an
event described in Section 601(5) of the Indenture shall be deemed to be a
default under Section 10.01(e) of the Mortgage Indenture, (vi) the occurrence of
an event described in Section 601(6) of the Indenture shall be deemed to be a
default under Section 10.01(f) of the Mortgage Indenture and (vii) the
occurrence of an event of default provided in an indenture supplemental to the
Indenture shall be deemed to be a default under the Mortgage Indenture.
Upon a default, the Trustees may exercise any of their rights under the
Mortgage Indenture and upon direction of a majority of the outstanding first
mortgage bonds must so act if certain conditions are met.
MODIFICATION OF MORTGAGE AND WAIVER OF DEFAULT
The rights of the holders of first mortgage bonds may be modified with the
consent of the holders of 75% of the first mortgage bonds, including, unless all
are affected alike, not less than 75% of each series affected; provided,
however, no modification of the terms of payment of principal or interest (other
than postponement of any interest payment date for
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not more than 3 years, which may be consented to by the holders of 75% of the
first mortgage bonds) and no modification depriving the holder of a lien on the
mortgaged property or reducing the percentage required for modification is
effective against any bondholder without his consent. Uncured defaults (except
in payment of principal or interest) may be waived by the holders of 75% of the
first mortgage bonds (including the holders of 60% of the first mortgage bonds
of each series).
VOTING OF THE MORTGAGE BONDS
The Trustee will attend such meetings of the holders of first mortgage
bonds, or deliver its proxy in connection therewith, as relate to matters with
respect to which it shall be entitled to vote or consent. The Indenture
provides that so long as no event of default shall have occurred and be
continuing under the Indenture, the Trustee will vote or consent as a holder of
the Designated Mortgage Bonds proportionately with what the Trustee reasonably
believes will be the vote or consent of the holders of all other first mortgage
bonds outstanding under the Mortgage Indenture that will vote or consent,
provided, however, that the Trustee will not so vote in favor of, or so consent
to, any amendment or modification of the Mortgage Indenture which, if it were an
amendment or modification of the Indenture, would require the consent of Holders
of Securities as described under "Description of Debt Securities--Modification
and Waiver," without the prior written consent of Holders of Outstanding
Securities which would be required for such an amendment or modification of the
Indenture.
RESTRICTIVE COVENANTS
Certain series of the Company's first mortgage bonds impose specific
dividend restrictions on the Company, the most restrictive of which currently
provides that so long as there are outstanding any bonds of such series, the
Company may not (a) declare or pay any dividend (other than dividends payable in
common stock of the Company) on or make any other distribution in respect of any
shares of the common stock of the Company, or (b) purchase, redeem, retire or
otherwise acquire for a consideration (other than in exchange for or from the
proceeds of other shares of capital stock of the Company) any shares of capital
stock of the Company of any class, except to the extent required to comply with
any sinking or purchase fund which may now exist or hereafter be established for
any class of preferred stock of the Company, if the aggregate amount so
declared, paid, distributed or expended after December 31, 1961 would exceed the
aggregate amount of the net income of the Company available for dividends on its
common stock accumulated after December 31, 1961, plus the sum of $1,900,000.
As each series of first mortgage bonds subject to this restriction matures or
otherwise ceases to be outstanding, the Securities will cease to have the
benefit of such series' restrictive covenants.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
considerations that may be relevant to a holder of a Debt Security who is
subject to United States federal income taxation on a net income basis in
respect of a Debt Security (an "Owner"). This summary deals only with Owners
who will hold Debt Securities as capital assets and does not address tax
considerations applicable to investors that may be subject to special tax rules,
such as banks, insurance company, or dealers in securities, or persons who will
hold Debt Securities as a position in a "straddle" for tax purposes.
This summary is based on laws, existing and proposed regulations,
administrative rules, and judicial decisions as of the date hereof, all of which
are subject to change. Prospective investors should consult their own tax
advisors in determining the tax consequences to them of holding Debt Securities,
including the application to their particular situation of the federal income
tax considerations discussed below, as well as the application of state, local
or other tax laws and prospects for enactment of future tax legislation or
regulations.
PAYMENTS OF INTEREST
Payments of interest on a Debt Security (other than a "Discount Security"
as defined below) will generally be taxable to an Owner as ordinary interest
income at the time such payments are accrued or are received in accordance with
the Owner's method of federal income tax accounting.
ORIGINAL ISSUE DISCOUNT
A Debt Security may be issued for an amount that is less than its stated
redemption price at Stated Maturity. The difference, if it exceeds 0.25 percent
of the stated redemption price at Stated Maturity multiplied by the number of
full years to maturity, will be "original issue discount" ("OID"). (Debt
Securities issued with OID shall be referred to as "Discount Securities.") For
this purpose, a Debt Security's stated redemption price at Stated Maturity
includes all payments to be made other than payments of "qualified stated
interest" (generally, interest payable on the outstanding principal amount at a
fixed rate or at a qualifying variable rate at least annually). Notice will be
given in the applicable Prospectus Supplement or pricing supplement thereto when
the Company determines that a particular Debt Security will be a Discount
Security.
Owners of Discount Securities should be aware that they must, in general,
include OID income in advance of the receipt of some or all of the related cash
payments. With respect to Discount Securities having a term in excess of one
year, the OID will be included in income currently as interest as it accrues
over the life of the Debt Security under a formula based upon the compounding of
interest at a rate that provides for a constant yield to maturity. Accrued OID
must be included in income by subsequent as well as original owners of Discount
Securities. See "Premium and Market Discount" below.
In certain cases, where interest payments do not constitute qualified
stated interest under the applicable Treasury regulations, Debt Securities that
bear interest from a non-tax standpoint may be deemed instead to bear OID for
federal income tax purposes. Treasury regulations would characterize Debt
Securities as Discount Securities if, for example, such
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Debt Securities provide for teaser rates, interest holidays, or other interest
short-falls resulting in more than a de minimis amount of OID, or bear interest
pursuant to an interest rate formula subject to a cap, floor, or similar
interest rate limitation that is reasonably expected, as of the date of issue,
to cause the interest rate for one or more accrual periods to be significantly
higher or lower (as the case may be) than the overall expected return on the
Debt Security determined without such cap, floor or other limitation.
Accordingly, Owners, including Owners who use the cash method of accounting for
federal income tax purposes, would be required to report interest in respect of
such a Debt Security under the method described above for Discount Securities.
Holders should consult their own tax advisors as to whether Debt Securities will
be considered to have been issued with OID under such circumstances and as to
the effect thereof on their particular situations.
Treasury Regulations provide an election for an Owner which uses the
accrual method to treat all interest on a Discount Security as OID which accrues
on a constant yield basis. Owners and prospective investors should consult
their tax advisors regarding the availability and tax consequences of this
election.
In the case of Discount Securities having a term of one year or less
("Short-Term Discount Securities"), OID is included in income currently either
on a straight-line basis or, if the Owner so elects, under the constant-yield
method used generally for OID. However, certain categories of Owners (generally
individuals or other taxpayers who use the cash method of accounting for federal
income tax purposes) are not required to include accrued OID on Short-Term
Discount Securities in their income currently unless they elect to do so. If
such an Owner that does not elect to currently include OID in income
subsequently recognizes a gain upon the disposition of the Discount Security,
such gain may be treated as ordinary interest income to the extent of the
accrued OID. Furthermore, such an Owner of Short-Term Discount Securities may
be required to defer deductions for a portion of the Owner's interest expenses
with respect to any indebtedness incurred or maintained to purchase or carry
such a Discount Security. In the case of Owners that are required to include
OID on Short-Term Discount Securities in income currently, the amount of accrued
OID included in income will be added to the Owner's tax basis in the Discount
Security.
The Company will provide annual information statements to the holders of
Discount Securities and to the Internal Revenue Service regarding the amount of
OID determined to be attributable to such Discount Securities for that year.
Prospective investors are advised to consult their tax advisers with respect to
the particular OID characteristics of any Discount Security and with respect to
any available elections that could affect the federal income tax consequences of
holding Discount Securities.
BASIS, SALE, EXCHANGE AND RETIREMENT
In general, an Owner's tax basis in a Debt Security will equal the Owner's
cost for the Debt Security, increased by any amounts includible in income by the
Owner as OID or market discount (as described below) and reduced by any
amortized acquisition premium (as described below) and any payments other than
qualified stated interest payments made on such Debt Security. Upon the sale,
exchange or retirement of a Debt Security, an Owner will recognize gain or loss
equal to the difference between the amount realized on the sale, exchange or
retirement (less any accrued qualified periodic interest not previously taken
into account, which will be taxable as such) and the owner's tax basis in the
Debt Security, except
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with respect to certain Short-Term Discount Securities. See "Original Issue
Discount" above. Except as discussed below with respect to market discount,
gain or loss recognized by an owner on the sale, exchange or retirement of a
Debt Security will be long-term capital gain or loss if the owner has held the
Debt Security for more than one year at the time of disposition. In the case of
individuals, capital gains are currently taxed at a maximum marginal federal
income tax rate of 28% while ordinary income is subject to a maximum marginal
federal income tax rate of 39.6%. In the case of corporations, the maximum
marginal federal income tax rate is 35% for both ordinary income and capital
gains. The distinction between capital gain or loss and ordinary income or loss
is also relevant for purposes of limitations on the deductibility of capital
losses and for determining the allowance for charitable deductions.
PREMIUM AND MARKET DISCOUNT
An Owner who purchases a Discount Security for any amount that is greater
than its "adjusted issue price" (defined as the sum of the issue price of the
Discount Security and the portion of OID previously includible, disregarding any
reduction on account of acquisition premium, as discussed below, in the gross
income of any Owners of the Discount Security and reduced by the amount of any
payment previously made on the Discount Security other than a qualified stated
interest payment) and less than or equal to its stated redemption price at
Stated Maturity, reduced by the amount of any payment previously made on the
Discount Security other than a qualified stated interest payment, will be
considered to have purchased such Original Issue Discount Security at an
"acquisition premium." The amount of OID that such Owner must include in its
gross income with respect to such Discount Security for any taxable year is
generally reduced by the portion of such acquisition premium properly allocable
to such year. If an Owner purchases a Debt Security for a cost in excess of its
stated redemption price at Stated Maturity (reduced by the amount of any payment
made on the debt instrument prior to the purchase date other than a qualified
stated interest payment), such Debt Security will have no OID, and such Owner
may elect to amortize such premium, using a constant interest method, generally
over the remaining term of the Debt Security. Such premium generally shall be
deemed to be an offset to interest otherwise includible with respect to the Debt
Security. Premium on a Debt Security held by an Owner that does not make such
an election will decrease the gain or increase the loss otherwise recognized on
disposition of the Debt Security.
If an Owner purchases a Debt Security or a Discount Security for an amount
that is less than, respectively, its stated redemption price at Stated Maturity
or its revised issue price (defined as the sum of the issue price of the
Discount Security and the aggregate amount of OID includible, disregarding any
reduction on account of acquisition premium, as discussed above, in the gross
income of all owners of the Discount Security), the amount of the difference
generally will be treated as "market discount" for federal income tax purposes,
unless such difference is less than a specified de minimis amount. Under the
market discount rules, an Owner will be required to treat any principal payment
on, or any gain on the sale, exchange, retirement or other disposition of, a
Debt Security as ordinary income to the extent of the market discount that has
accrued (and has not previously been included in income) during the period such
Owner held the Debt Security. In addition, the Owner may be required to defer,
until the maturity of the Debt Security or its earlier disposition in a taxable
transaction, the deduction of all or a portion of the interest expense on any
indebtedness incurred or continued to purchase or carry such Debt Security.
20
<PAGE>
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Debt Security, unless
the Owner elects to accrue on a constant interest basis. An Owner of a Debt
Security may elect to include market discount in income currently as it accrues
(on either a ratable or a constant interest basis with a corresponding increase
in the Owner's tax basis in the Debt Security), in which case the rule described
above regarding deferral of interest deductions will not apply. This election
to include currently, once made, applies to all market discount obligations
acquired on or after the first taxable year to which the election applies and
may not be revoked without the consent of the Internal Revenue Service.
BACKUP WITHHOLDING
In general, if a holder fails to furnish a correct taxpayer identification
number or certification of exempt status, fails to report dividend and interest
income in full, or fails to certify that he has provided a correct taxpayer
identification number and that he is not subject to withholding, the Company may
withhold a 31 percent federal backup withholding tax on certain amounts paid or
deemed paid (including OID) to the holder. An individual's taxpayer
identification number is his social security number. The backup withholding tax
is not an additional tax and may be credited against a holder's regular federal
income tax liability or refunded by the Internal Revenue Service where
applicable.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters or dealers
and also may sell Debt Securities directly or through agents. The Prospectus
Supplement or the pricing supplement thereto will set forth the names of any
underwriters or agents involved in the sale of the Offered Securities and any
applicable commissions or discounts.
Underwriters, dealers or agents may offer and sell the Offered Securities
at a fixed price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. In connection with the sale of Offered
Securities, underwriters, dealers or agents may be deemed to have received
compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters or agents may sell
Offered Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time to time) from
the purchasers for whom they may act as agent.
The Offered Securities, when first issued, will have no established trading
market. Any underwriters, dealers or agents to or through whom Offered
Securities are sold by the Company for public offering and sale may make a
market in such Offered Securities, but such underwriters, dealers or agents will
not be obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any Offered Securities.
Any underwriters, dealers and agents participating in the distribution of
the Offered Securities may be deemed to be underwriters and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Securities may be deemed
21
<PAGE>
to be underwriting discounts and commissions, under the Act. Underwriters,
dealers and agents may be entitled, under agreements with the Company, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Act, and to reimbursement by the Company for
certain expenses.
If so indicated in an applicable Prospectus Supplement or pricing
supplement thereto, the Company will authorize dealers acting as the Company's
agents to solicit offers by certain institutions to purchase Offered Securities
from the Company at the public offering price set forth in such Prospectus
Supplement or pricing supplement thereto pursuant to contracts providing for
payment and delivery on a future date. Institutions with which such contracts
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and other
institutions, but in all cases such institutions must be approved by the
Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Offered Securities shall not
at the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject. The underwriters and such
other persons will not have any responsibility in respect of the validity or
performance of such contracts.
EXPERTS
The balance sheets and statements of capitalization of the Company as of
December 31, 1995 and 1994, and the statements of income, common shareholder's
equity and cash flows for each of the three years in the period ended December
31, 1995, incorporated by reference in this prospectus, have been incorporated
by reference in reliance on the report of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in auditing and
accounting.
Any financial statements and schedules hereafter incorporated by reference
in the registration statement of which this prospectus is a part that have been
audited and are the subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon the authority
of such firms as experts in accounting and auditing to the extent covered by
consents filed with the Commission.
The statements made as to matters of law and legal conclusions under
the headings "Description of Debt Securities", "Description of Mortgage
Bonds" and "Certain United States Federal Income Tax Consequences" contained
herein have been reviewed by Choate, Hall & Stewart (a partnership including
professional corporations) and all such statements are set forth herein upon
the authority of such counsel.
ADDITIONAL INFORMATION
With respect to the unaudited interim financial information of the Company
for the periods ended March 31, June 30, and September 30, 1996, incorporated by
reference in this prospectus, the independent accountants have reported that
they have applied limited procedures in accordance with professional standards
for a review of such information. However, their reports included in the
Company's quarterly reports on Form 10-Q for the quarterly periods ended March
31, June 30, and September 30, 1996 and incorporated by reference herein, state
that they did not audit and they do not express an opinion on that
22
<PAGE>
interim financial information. Accordingly, the degree of reliance on their
report on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Act for their reports on the unaudited
interim financial information because those reports are not "reports" or "parts"
of the registration statement prepared or certified by the accountants within
the meaning of Sections 7 and 11 of the Act.
LEGAL OPINIONS
The legality of the Debt Securities offered hereby is being passed upon for
the Company by Choate, Hall & Stewart (a partnership including professional
corporations), Boston, Massachusetts and for the underwriters or agents, if any,
by Ropes & Gray, Boston, Massachusetts. Matters of local law are being passed
upon as to the State of Nevada by Woodburn and Wedge, Reno, Nevada, and as to
the State of California by Graham & James LLP. Choate, Hall & Stewart has
relied upon the opinions of such other counsel as to such matters.
23
<PAGE>
=================================== =================================
NO DEALER, AGENT, SALESPERSON OR
ANY OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, SIERRA PACIFIC
PROSPECTUS SUPPLEMENT AND ANY PRICING POWER
SUPPLEMENT IN CONNECTION WITH THE COMPANY
OFFER CONTAINED HEREIN AND, IF GIVEN
OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY ANY AGENT. THIS
PROSPECTUS, PROSPECTUS SUPPLEMENT AND
ANY PRICING SUPPLEMENT SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE $35,000,000
SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THE PROSPECTUS,
PROSPECTUS SUPPLEMENT OR ANY PRICING
SUPPLEMENT, OR AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THE PROSPECTUS, PROSPECTUS Collateralized Debt
SUPPLEMENT OR ANY PRICING SUPPLEMENT Securities
NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN
OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THEIR RESPECTIVE DATES.
PROSPECTUS
DECEMBER ___, 1996
TABLE OF CONTENTS
Page
-----
Available Information . . . . . . . . 2
Incorporation of Certain Documents by
Reference . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . 3
Application of Proceeds . . . . . . . 4
Ratios of Earnings to Fixed Charges . 4
Description of Debt Securities. . . . 4
Description of Mortgage Bonds . . . . 14
Certain United States Federal Income
Tax Consequences . . . . . . . . . 18
Plan of Distribution . . . . . . . . 21
Experts . . . . . . . . . . . . . . . 22
Additional Information. . . . . . . . 22
Legal Opinions . . . . . . . . . . . 23
=================================== =================================
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Expenses payable by the Company in connection with the sale of the Debt
Securities offered hereby are as follows:
Securities and Exchange Commission
Registration Fee . . . . . . . . . . . $10,607
* Blue sky fees and expenses . . . . . . 10,000
Nevada Commission Fee . . . . . . . . . 140
California Commission Fee . . . . . . . 6,500
* Fees and expenses of Trustees . . . . . 4,000
* Fees and expenses of Trustees' Counsel 30,000
* Fees and expenses of Agents' Counsel . 20,000
* Fees and expenses of Company's Counsel
(Special Counsel, California and Nevada
Counsel) . . . . . . . . . . . . . . . 65,000
* Accountant's fees and expenses . . . . 10,000
* Printing, including Form S-3,
prospectuses, exhibits, etc. . . . . . 20,000
* Rating agency fees . . . . . . . . . . 55,000
* Miscellaneous expenses . . . . . . . . 4,753
-------------
* Total Expenses . . . . . . $236,000
-------------
-------------
- ---------------------
* Estimated
II-1
<PAGE>
ITEM 16. EXHIBITS
See Index to Exhibits immediately preceding the Exhibits included as part
of this Pre-Effective Amendment.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
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 Reno, State of Nevada, on the 18th day of December,
1996.
SIERRA PACIFIC POWER COMPANY
By /s/ Walter M. Higgins
-----------------------------------
Walter M. Higgins, Chairman,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Walter M. Higgins, Malyn K.
Malquist, William E. Peterson and William C. Rogers and each of them, as his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution, for him or her and in his or her 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
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, 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 he or she 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 substitute or substitutes, shall 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 by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Walter M. Higgins Chairman, President and December 16, 1996
--------------------- Chief Executive Officer
Walter M. Higgins (Principal Executive
Officer) and Director
/s/ Malyn K. Malquist Senior Vice President, December 16, 1996
--------------------- Distribution Services
Malyn K. Malquist Business Group and Acting
Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)
Edward P. Bliss* Director December 16, 1996
---------------------
Edward P. Bliss
II-3
<PAGE>
Signature Title Date
--------- ----- ----
Krestine M. Corbin* Director December 16, 1996
-------------------------
Krestine M. Corbin
Theodore J. Day* Director December 16, 1996
-------------------------
Theodore J. Day
Harold P. Dayton, Jr.* Director December 16, 1996
-------------------------
Harold P. Dayton, Jr.
James R. Donnelley* Director December 16, 1996
-------------------------
James R. Donnelley
Richard N. Fulstone* Director December 16, 1996
-------------------------
Richard N. Fulstone
James L. Murphy* Director December 16, 1996
-------------------------
James L. Murphy
Director December , 1996
-------------------------
Ronald K. Remington
Director December , 1996
-------------------------
Dennis E. Wheeler
Robert B. Whittington* Director December 16, 1996
-------------------------
Robert B. Whittington
*By /s/ Malyn K. Malquist
-----------------------
Malyn K. Malquist
Attorney-in-fact
II-4
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- -----------
# 1.1 - Form of Distribution Agreement by and among the
Company and the Agents.
* 4.1 - Collateral Trust Indenture dated as of June 1, 1992
between the Company and Bankers Trust Company, in
its capacity as Trustee (Exhibit B to Form 8-K
dated July 15, 1992).
* 4.2 - First Supplemental Indenture dated as of June 1,
1992 to Collateral Trust Indenture dated as of June
1, 1992 between the Company and Bankers Trust
Company, as Trustee (Exhibit B to Form 8-K dated
July 15, 1992).
* 4.3 - Second Supplemental Indenture to Collateral Trust
Indenture dated as of June 1, 1992 between the
Company and Bankers Trust Company, as Trustee
(Exhibit B to Form 8-K dated October 25, 1993).
* 4.4 - Third Supplemental Indenture to Collateral Trust
Indenture dated as of February 1, 1996 between the
Company and Bankers Trust Company, as Trustee
(Exhibit B to Form 8-K dated March 11, 1996).
# 4.5 - Form of Fourth Supplemental Indenture to Collateral
Trust Indenture between the Company and Bankers
Trust Company, as Trustee.
* 4.6 - Form of Medium-Term Global Floating Rate Note,
Series A (Exhibit E to Form 8-K dated July 15,
1992).
* 4.7 - Form of Medium-Term Global Floating Rate Note,
Series B (Exhibit D to Form 8-K dated October 25,
1993).
* 4.8 - Form of Medium-Term Global Floating Rate Note,
Series C (Exhibit D to Form 8-K dated March 11,
1996).
* 4.9 - Mortgage Indentures of the Company defining the
rights of the holders of the Company's First
Mortgage Bonds - Original Indenture (Exhibit 7-A to
Registration No. 2-7475); Sixth Supplemental
Indenture (Exhibit 4-F to Registration No. 2-
16157); Seventh Supplemental Indenture (Exhibit 2-G
to Registration No. 2-20365); Eighth Supplemental
Indenture (Exhibit 4-I to Registration No. 2-
21479); Ninth Supplemental Indenture (Exhibit 2-M
to Registration No. 2-59509); Tenth Supplemental
Indenture(Exhibit 4-K to Registration No. 2-
23932); Eleventh Supplemental Indenture (Exhibit 4-
L to Registration No. 2-26552); Twelfth
Supplemental Indenture (Exhibit 4-L to Registration
No. 2-36982); Fourteenth Supplemental Indenture
(Exhibit 2-P to Registration No. 2-46592);
Fifteenth Supplemental Indenture (Exhibit 2-Q to
<PAGE>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
Registration No. 2-51862); Sixteenth Supplemental
Indenture (Exhibit 2-Y to Registration No. 2-
53404); Seventeenth Supplemental Indenture (Exhibit
2-U to Registration No. 2-57033); Eighteenth
Supplemental Indenture (Exhibit 2-V to Registration
No. 2-60954); Nineteenth Supplemental Indenture
(originally filed as Exhibit (2)(B) to Annual
Report on Form 10-K filed for the year ended
December 31, 1978 - refiled as Exhibit 4(A) to
Annual Report on Form 10-K filed for the year ended
December 31, 1991); Twentieth Supplemental
Indenture (originally filed as Exhibit (2)(C) to
Annual Report on Form 10-K filed for the year ended
December 31, 1978 - refiled as Exhibit 4(B) to
Annual Report on Form 10-K filed for the year ended
December 31, 1991); Twenty-first Supplemental
Indenture (originally filed as Exhibit (2)(B) to
Annual Report on Form 10-K filed for the year ended
December 31, 1979 - refiled as Exhibit 4(C) to
Annual Report on Form 10-K filed for the year ended
December 31, 1991); Twenty-fourth Supplemental
Indenture (originally filed as Exhibit (a)(4) to
Quarterly Report on Form 10-Q filed for the quarter
ended September 30, 1982 - refiled as Exhibit 4(D)
to Annual Report on Form 10-K filed for the year
ended December 31, 1991); Twenty-fifth Supplemental
Indenture (Exhibit 4-B to Registration No. 33-
6226); Twenty-sixth Supplemental Indenture (Exhibit
4-B to Registration No. 33-23129); Twenty-seventh
Supplemental Indenture (Exhibit (4)(A) to Annual
Report on Form 10-K filed for the year ended
December 31, 1989); Twenty-eighth Supplemental
Indenture (Exhibit 4.3 to Registration No. 33-
48414); Twenty-ninth Supplemental Indenture
(Exhibit D to Form 8-K dated June 15, 1992);
Thirtieth Supplemental Indenture (Exhibit 4(B) to
Annual Report on Form 10-K filed for the year ended
December 31, 1992); Thirty-first Supplemental
Indenture (Exhibit 4(C) to Annual Report on Form
10-K filed for the year ended December 31, 1992);
Thirty-second Supplemental Indenture (Exhibit 4.6
to Registration No. 33-69550); Thirty-third
Supplemental Indenture (Exhibit C to Current Report
on Form 8-K dated October 20, 1993); Thirty-fourth
Supplemental Indenture (Exhibit C to Current Report
on Form 8-K dated March 11, 1996).
# 4.10 - Form of Thirty-fifth Supplemental Indenture.
# 5.1 - Opinion of Choate, Hall & Stewart (a partnership
including professional corporations).
# 5.2 - Opinion of Woodburn and Wedge.
# 5.3 - Opinion of Graham & James LLP.
#12.1 - Statement setting forth computation of ratio of
earnings to fixed charges.
2
<PAGE>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
#15.1 - Awareness letter from Coopers & Lybrand L.L.P.
regarding their reports on unaudited interim
financial information included in the Quarterly
Report of the Company on Form 10-Q for the
quarterly periods ended March 31, 1996, June 30,
1996 and September 30, 1996.
#23.1 - Consent of Coopers & Lybrand L.L.P.
#23.2 - Consent of Choate, Hall & Stewart (a partnership
including professional corporations) (included in
Exhibit 5.1).
#23.3 - Consent of Woodburn and Wedge (included in Exhibit
5.2).
#23.4 - Consent of Graham & James LLP (included in Exhibit
5.3).
+24.1 - Power of Attorney of Directors of the Company.
Reference is made to the signature page of the
Registration Statement.
+25.1 - Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of Bankers
Trust Company.
__________
* Incorporated by reference as indicated.
+ Previously filed.
# Filed herewith.
<PAGE>
$35,000,000
SIERRA PACIFIC POWER COMPANY
COLLATERALIZED MEDIUM-TERM NOTES, SERIES D
DUE FROM 9 MONTHS TO 40 YEARS FROM
DATE OF ISSUE
DISTRIBUTION AGREEMENT
January , 1997
Lehman Brothers Inc.
3 World Financial Center
New York, NY 10285
A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, MO 63103
UBS Securities LLC
299 Park Avenue
New York, NY 10171
Dear Sirs:
Sierra Pacific Power Company, a Nevada corporation (the "Company"),
proposes to issue and sell from time to time its Collateralized Medium-Term
Notes, Series D, due from nine months to 40 years from the date of issue, in an
initial aggregate principal amount of $35,000,000 (the "Notes") and agrees with
each of you (individually, an "Agent" and collectively, the "Agents") as set
forth in this Agreement.
The Notes are to be issued from time to time pursuant to an indenture,
dated as of June 1, 1992 (as heretofore supplemented and as supplemented by the
Fourth Supplemental Indenture dated as of January __, 1997 relating to the Notes
(the "Fourth Supplemental Indenture") and as it may be further supplemented or
amended from time to time (the "Indenture"), between the Company and Bankers
Trust Company, as trustee (the "Trustee"). The Notes will be secured by one or
more first mortgage bonds (the "Mortgage Bonds") to be issued and delivered by
the Company to the Trustee. The Mortgage Bonds will be issued pursuant to an
Indenture of Mortgage, dated as of December 1, 1940, from the Company's
predecessor to The New England Trust Company (State Street Bank & Trust Company,
as successor trustee) and Leo W. Huegle (Gerald R. Wheeler, as successor
trustee), as amended and supplemented and as it will be further supplemented by
a Thirty-fifth Supplemental Indenture
<PAGE>
dated as of January 1, 1997 (said Indenture of Mortgage, as so amended and
supplemented and to be supplemented, and said supplemental indenture, being
hereinafter referred to as the "Mortgage Indenture" and the "Thirty-fifth
Supplemental Indenture", respectively).
The Notes shall have the maturity ranges, applicable interest rates or
interest rate formulas, issue prices, redemption and repayment provisions and
other terms set forth in the Prospectus referred to in Section l(c) hereof as it
may be amended or supplemented from time to time, including any Pricing
Supplement (as such term is defined in Section 3(a) hereof). The Notes will be
issued, and the terms thereof established, from time to time, by the Company in
accordance with the Indenture and the Procedures referred to in Section 2(f)
hereof. This Agreement shall only apply to sales of the Notes and not to sales
of any other securities or evidences of indebtedness of the Company and only on
the specific terms set forth herein.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell its Notes directly on its own
behalf or to designate or select additional agents as set forth in Section 11
hereof, the Company hereby (i) appoints each of the Agents as the co-exclusive
agents of the Company for the purpose of soliciting or receiving offers to
purchase Notes from the Company and (ii) agrees that whenever the Company
determines to sell Notes directly to an Agent as principal it will enter into a
separate agreement (each a "Purchase Agreement"). Each such Purchase Agreement,
whether oral (and confirmed in writing, which may be by facsimile transmission)
or in writing, shall contain such information (as applicable) set forth in the
form of Purchase Agreement attached as EXHIBIT A to this Agreement, relating to
such sale in accordance with Section 2(e) hereof.
SECTION l. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each Agent as of the date hereof, as of the Commencement Date
referred to in Section 2(g) hereof, and as of the times referred to in Sections
6(a) and 6(b) hereof (the Commencement Date and each such time being hereinafter
sometimes referred to as a "Representation Date"), as follows:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada, has the corporate
power and authority to own or lease and operate its properties, has the
corporate power, authority and franchises to carry on its business as now
conducted and has the corporate power and authority to carry on its
business as presently proposed to be conducted, all as described in the
Prospectus hereinafter referred to; and the Company is duly qualified and
is authorized to do business and is in good standing as a foreign
corporation in each jurisdiction where the ownership or character of its
properties or the nature of its business or activities makes such
qualification necessary and where the failure so to qualify or be in good
standing would have a material adverse effect on the condition (financial
or other), net worth or results of operations of the Company and its
subsidiaries considered as one enterprise. All of the outstanding shares
of Common Stock of the Company are validly issued and are held of record by
Sierra Pacific Resources, a Nevada corporation.
2
<PAGE>
(b) Each of the subsidiaries of the Company is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has the corporate power and authority to own
or lease and operate its properties, has the corporate power, authority and
franchises to carry on its business as now conducted and has the corporate
power and authority to carry on its business as presently proposed to be
conducted; each of the subsidiaries of the Company is duly qualified and is
authorized to do business and is in good standing as a foreign corporation
in each jurisdiction where the failure so to qualify or be in good standing
would have a material adverse effect on the condition (financial or other),
net worth or results of operations of the Company and its subsidiaries
considered as one enterprise; all of the outstanding shares of capital
stock of each subsidiary of the Company have been duly authorized and
validly issued and are fully paid and nonassessable; and all of the capital
stock of each such subsidiary owned by the Company, directly or through
subsidiaries, is owned free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(c) A registration statement on Form S-3, including a prospectus,
relating to the Notes has been filed with the Securities and Exchange
Commission (the "Commission") and has become effective. No order
preventing or suspending the use or effectiveness of the Prospectus (as
defined below) has been issued by the Commission or is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission. Such registration statement in the form in which it became
effective, and as from time to time supplemented, and including all
exhibits thereto is referred to as the "Registration Statement"; the
prospectus relating to the Notes in the form in which it has most recently
been filed, or transmitted for filing, with the Commission pursuant to Rule
424 under the Securities Act of 1933, as amended (the "Act"), together with
all amendments or supplements thereto, is hereinafter referred to as the
"Prospectus." Any reference to the Act shall include the rules and
regulations of the Commission promulgated thereunder. Any reference to the
Registration Statement or Prospectus or any amendment or supplement thereto
shall include all documents incorporated by reference therein (the
"Incorporated Documents") pursuant to the applicable form under the Act.
The Registration Statement and the Prospectus comply, and will, as amended
or supplemented, if applicable, comply at all times during any Marketing
Period (as defined below), in all material respects with the requirements
of the Act and do not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were or are made, not misleading, except
that the foregoing does not apply to statements in or omissions from any
such documents made in reliance upon and in conformity with written
information furnished to the Company by any Agent specifically for use
therein, or as to any statement in or omission from the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the
Indenture. "Marketing Period" shall mean any time when no suspension of
solicitation of offers to purchase Notes pursuant to Sections 2(b) and 3(c)
hereof shall be in effect and at any time when any Agent shall own any
Notes purchased by such Agent from the Company with the intention of
reselling them for a period not to exceed ninety (90) days after the
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delivery of, and payment for, such Notes or the Company has accepted an
offer to purchase Notes but the related settlement has not occurred.
(d) The Incorporated Documents complied when filed with the
Commission, comply and will comply at all times during each Marketing
Period, in all material respects with the applicable provisions of the Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and, when read together and with the other information in the Registration
Statement or Prospectus, did not, do not and will not contain any untrue
statement of a material fact and did not, do not and will not omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were or
are made, not misleading, except that the foregoing does not apply to
statements in or omissions from any such documents made in reliance upon
and in conformity with written information furnished to the Company by any
Agent specifically for use therein. All references to the Exchange Act or
the Trust Indenture Act shall include the rules and regulations of the
Commission promulgated thereunder. The Incorporated Documents have been
and will be at all times during each Marketing Period timely filed as
required by the Exchange Act. There are no contracts or documents of the
Company or any subsidiary of the Company which are required to be filed as
exhibits to the Registration Statement which have not been filed as
required.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
contemplated in the Prospectus, there has not been any material adverse
change in the condition (financial or other), net worth or results of
operations of the Company and the subsidiaries considered as one
enterprise.
(f) The financial statements in the Registration Statement and the
Prospectus fairly present and will fairly present at all times during each
Marketing Period the financial condition of the Company and the results of
its operations; and said financial statements (including the related notes)
have been and will be at all times during each Marketing Period prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except for any changes in which
the independent accountants for the Company have concurred and which have
been specifically disclosed to the Agents).
(g) The outside auditors whose report appears in the Company's most
recent Annual Report on Form 10-K of the Company are independent public
accountants as required by the Act.
(h) Prior to each issuance and sale of Notes, the Company will have
full corporate power and lawful corporate authority to authorize, issue and
sell the Notes being issued and sold at that time, on the terms and
conditions set forth herein, and has
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taken or will take all corporate action necessary therefor; the Company has
obtained every consent, approval, authorization or other order of any
regulatory body which is required for such authorization, issue or sale
except as may be required under the Act or state securities laws; and, when
duly and validly executed, authenticated and issued as provided in the
Indenture and delivered pursuant to this Agreement and the Indenture, the
Notes will constitute valid, legal and binding obligations of the Company
enforceable against it in accordance with their respective terms and the
terms of the Indenture and entitled to the benefits of the Indenture,
except as enforcement thereof may be limited by bankruptcy, insolvency, or
other similar laws relating to or affecting enforcement of creditors'
rights generally or by general equity principles. The Indenture conforms
and the Notes will conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the
Prospectus. The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid, legal and binding instrument of the
Company enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency, or
other similar laws relating to or affecting enforcement of creditors'
rights generally or by general equity principles. The Indenture has been
duly qualified under the Trust Indenture Act.
(i) Except as set forth in the Prospectus, the Company is not in
violation of its Articles of Incorporation or by-laws or in default under
any agreement, indenture or instrument, the effect of which violation or
default would be materially adverse to the condition (financial or other),
net worth or results of operations of the Company. The performance by the
Company of its obligations under this Agreement and any applicable Purchase
Agreement and the consummation of the transactions contemplated herein and
therein and the fulfillment of the terms hereof and thereof and execution
and delivery by the Company of, and the compliance by the Company with, all
the terms and provisions of the Notes and the Indenture will not result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, note
agreement or other material agreement or instrument to which the Company or
any of its subsidiaries is a party, or by which they or any of their
property is bound, or the Articles of Incorporation or by-laws of the
Company or any of its subsidiaries or any order, rule or regulation
applicable to the Company or any of its subsidiaries of any court or of any
federal or state regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or any of its
subsidiaries or their respective or collective property.
(j) Except as set forth in the Prospectus, there is no pending
action, suit or other proceeding to which the Company is a party or of
which any property of the Company or any of its subsidiaries is the
subject, before or by any court or other governmental body, which is likely
to result in any material adverse change in the condition (financial or
other), net worth or results of operations of the Company and its
subsidiaries considered as one enterprise; and, except as set forth in the
Prospectus, no
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such action, suit or proceeding is known by the Company to be threatened or
contemplated.
(k) The certificates delivered pursuant to Section 5(h) hereof and
all other documents delivered by the Company or its representatives in
connection with the issuance and sale of the Notes were on the dates on
which they were delivered in all material respects true and complete.
(l) Each of this Agreement and any applicable written Purchase
Agreement has been or will be duly and validly authorized, executed and
delivered by the Company and, upon execution and delivery by the Agents and
subject to any principles of public policy limiting the right to enforce
the indemnification provisions contained herein, will be a valid and
binding agreement of the Company.
(m) Each of the Mortgage Indenture and the Thirty-fifth Supplemental
Indenture has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, or other similar laws
relating to or affecting enforcement of creditors' rights generally or by
general equity principles. The Mortgage Indenture has been qualified under
the Trust Indenture Act.
(n) The Company has good and sufficient title to all the properties
described as owned by it in, and subject to the lien of, the Mortgage
Indenture (the "Mortgage Properties"), subject only to Permitted Liens (as
defined in the Mortgage Indenture), and to minor defects and irregularities
customarily found in properties of like size and character that do not
materially impair the use of the property affected thereby in the operation
of the business of the Company; the descriptions in the Mortgage Indenture
of the Mortgage Properties are adequate to constitute the Mortgage
Indenture a lien thereon; and the Mortgage Indenture constitutes a valid
lien on the Mortgage Properties, which include substantially all of the
permanent physical properties and franchises of the Company (other than
those expressly excepted), subject only to the exceptions enumerated above.
(o) The Mortgage Bonds deposited with the Trustee as the basis for
the issuance of the Notes have, to the extent that such Mortgage Bonds have
been designated by the Company as designated mortgage bonds (the
"Designated Mortgage Bonds"), been duly pledged to the Trustee, and the
Indenture will, upon payment for the Notes issued upon the basis of the
Designated Mortgage Bonds so deposited, constitute a valid first lien
thereupon; no registration, recording or filing of the Indenture (or
notices or financing statements in respect thereof) is required by law to
make effective and to maintain the lien on the Designated Mortgage Bonds so
deposited intended to be created by the Indenture.
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(p) The Company has full corporate power and lawful corporate
authority to authorize, issue and pledge the Mortgage Bonds and has taken
or will take all corporate action necessary therefor; the Company has
obtained every consent, approval, authorization or other order of any
regulatory body which is required for such authorization, issue or pledge.
The Mortgage Indenture and the Mortgage Bonds conform in all material
respects to all statements in relation thereto contained in the
Registration Statement and the Prospectus.
(q) The Mortgage Bonds deposited with the Trustee and the Designated
Mortgage Bonds pledged to the Trustee as the basis for the issuance of the
Securities constitute legal, valid and binding obligations of the Company,
subject, as to enforcement, to laws relating to or affecting generally the
enforcement of creditors' rights, including, without limitation, bankruptcy
and insolvency laws, and to general principles of equity, and will be
entitled to the security afforded by the Mortgage Indenture equally and
ratably with the securities outstanding thereunder.
(r) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
SECTION 2. SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL.
(a) APPOINTMENT. Subject to the terms and conditions stated herein,
including, without limitation, the provisions of Section 11 hereof, the Company
hereby appoints each of the Agents as the co-exclusive agents of the Company for
the purpose of soliciting or receiving offers to purchase the Notes from the
Company by others during any Marketing Period. On the basis of the
representations and warranties contained herein, but subject to the terms and
conditions herein set forth, each Agent agrees, as a co-exclusive agent of the
Company, to use its reasonable best efforts to solicit offers to purchase the
Notes upon the terms and conditions set forth in the Prospectus. The Agents are
not authorized to appoint sub-agents or to engage the services of any other
broker or dealer in connection with the offer or sale of the Notes, except as
provided in paragraph (e) of this Section. Except as otherwise provided herein,
including, without limitation, the provisions of Section 11 hereof, so long as
this Agreement shall remain in effect with respect to any Agent, the Company
shall not, without the consent of each such Agent (which consent shall not
unreasonably be withheld), solicit or accept offers to purchase Notes otherwise
than through one of the Agents, PROVIDED, HOWEVER, the Company expressly
reserves the right to sell Notes directly to investors, in which case no
commission will be payable with respect to such sale. Each Agent may also
purchase Notes from the Company as principal for purposes of resale, as more
fully described in paragraph (e) of this Section.
(b) SUSPENSION OF SOLICITATION. The Company reserves the right, in its
sole discretion, to suspend solicitation of offers to purchase the Notes
commencing at any time for any period of time or indefinitely. As soon as
practicable, but in any event not later than one business day after receipt of
notice from the Company, the Agents will forthwith suspend solicitation of
offers
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to purchase Notes from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed. For the purpose of the
foregoing sentence, "business day" shall mean any day which is not a Saturday
or Sudnay and which is not a day on which (i) banking institutions are
generally authorized or obligated by law to close in the City of New York or
(ii) The New York Stock Exchange is closed for trading.
Upon receipt of notice from the Company as contemplated by Section 3(b)
hereof, each Agent shall suspend its solicitation of offers to purchase Notes
until such time as the Company shall have furnished it with an amendment or
supplement to the Registration Statement or the Prospectus, as the case may
be, contemplated by Section 3(c) and shall have advised such Agent that such
solicitation may be resumed.
(c) AGENT'S COMMISSION. Upon the closing of the sale of any Notes sold by
the Company as a result of a solicitation made by or offer to purchase received
by an Agent, the Company agrees to pay such Agent a commission in accordance
with the schedule set forth in EXHIBIT B hereto.
(d) SOLICITATION OF OFFERS. The Agents are authorized to solicit offers
to purchase the Notes only in the denominations specified in the Prospectus, at
a purchase price equal to 100% of the principal amount thereof or such other
principal amount or purchase price as shall be specified by the Company. Each
Agent shall communicate to the Company, orally or in writing, each reasonable
offer to purchase Notes received by it as an Agent. The Company shall have the
sole right to accept offers to purchase the Notes and may reject any offer in
whole or in part. Each Agent shall have the right, in its discretion reasonably
exercised, to reject any offer to purchase the Notes received by it, without
advising the Company, in whole or in part, and any such rejection shall not be
deemed a breach of its agreement contained herein.
No Note which the Company has agreed to sell pursuant to this Agreement
shall be deemed to have been purchased and paid for, or sold by the Company,
until such Note shall have been delivered to the purchaser thereof against
payment therefor by such purchaser.
(e) PURCHASES AS PRINCIPAL. Each sale of Notes to any Agent as principal,
for resale to one or more investors or to another broker-dealer (acting as
principal for purposes of resale), shall be made in accordance with the terms of
this Agreement and a Purchase Agreement, whether oral (and confirmed in writing
by such Agent to the Company, which may be by facsimile transmission) or in
writing, which will provide for the sale of such Notes to, and the purchase
thereof by, such Agent. A Purchase Agreement may also specify certain
provisions relating to the reoffering of such Notes by such Agent. The
commitment of any Agent to purchase Notes from the Company as principal shall
be deemed to have been made on the basis of the representations and warranties
of the Company herein contained and shall be subject to the terms and conditions
herein set forth. Each Purchase Agreement shall specify the principal amount
and terms of the Notes to be purchased by an Agent, the time and date (each such
time and date being referred to herein as a "Time of Delivery") and place of
delivery of and payment for such Notes and such other information (as
applicable) as is set forth in EXHIBIT A hereto.
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<PAGE>
The Company agrees that if any Agent purchases Notes as principal for resale
such Agent shall receive such compensation, in the form of a discount or
otherwise, as shall be indicated in the applicable Purchase Agreement or, if no
compensation is indicated therein, a commission in accordance with EXHIBIT B
hereto. Any Agent may utilize a selling or dealer group in connection with the
resale of such Notes. In addition, any Agent may offer the Notes it has
purchased as principal to other dealers. Any Agent may sell Notes to any dealer
at a discount and, unless otherwise specified in the applicable Pricing
Supplement (as such term is defined in Section 3(a) hereof), such discount
allowed to any dealer will not be in excess of the discount to be received by
such Agent from the Company. Such Purchase Agreement shall also specify any
requirements for delivery of opinions of counsel, accountant's letters and
officers' certificates pursuant to Section 5 hereof.
The obligation of the Company to sell and deliver Notes, pursuant to any
Purchase Agreement or otherwise, shall in each case be subject to the condition
that, on any settlement date for the sale of Notes or the Time of Delivery, as
the case may be, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and still be in effect and no proceedings for
that purpose shall be pending before, or to the knowledge of the Company or the
Agents contemplated or threatened by, the Commission. Each date of delivery of
and payment for Notes to be purchased by an Agent pursuant to a Purchase
Agreement is referred to herein as a "Settlement Date."
(f) ADMINISTRATIVE PROCEDURES. Administrative procedures respecting the
sale of Notes (the "Procedures") are set forth in EXHIBIT C hereto and may be
amended from time to time in writing signed by each of the Agents and the
Company. Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them herein and in
the Procedures. The Procedures shall apply to all transactions contemplated
hereunder including sales of Notes to any Agent as principal pursuant to a
Purchase Agreement, unless otherwise set forth in such Purchase Agreement.
(g) DELIVERY OF DOCUMENTS. The documents required to be delivered by
Section 5 hereof shall be delivered at the offices of Ropes & Gray not later
than 10:00 a.m., Boston time, on the date of this Agreement or at such later
time as may be mutually agreed upon by the Company and the Agents, which in no
event shall be later than the time at which the Agents commence solicitation of
offers to purchase Notes hereunder. The date of delivery of such documents is
referred to herein as the "Commencement Date."
(h) OBLIGATIONS SEVERAL. The Company acknowledges that the obligations of
the Agents under this Agreement are several and not joint.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants and agrees
with each of the Agents, as follows:
(a) AMENDMENTS AND SUPPLEMENTS TO REGISTRATION STATEMENT AND
PROSPECTUS. The Company will give the Agents notice of its intention to
file any amendment to the
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Registration Statement or amendment or supplement to the Prospectus (other
than a supplement providing solely for the specification of the interest
rates, maturity dates, issuance prices, redemption terms and prices, if
any, and other terms of Notes sold pursuant hereto (any such supplement
being hereinafter called a "Pricing Supplement")), whether by the filing of
documents pursuant to the Act, the Exchange Act or otherwise, and will
furnish the Agents with copies of any such amendment or supplement or other
documents proposed to be filed a reasonable time in advance of such
proposed filing.
(b) NOTICE TO AGENTS OF CERTAIN EVENTS. The Company will notify each
of the Agents immediately, and confirm in writing if requested by the
Agents in any particular instance, (i) when any amendment or post-effective
amendment to the Registration Statement has been filed and/or becomes
effective or when any supplement or amendment to the Prospectus has been
filed, (ii) of the issuance of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the
use of any preliminary prospectus relating to the Notes or the Prospectus
or of the initiation or threatening known by it of any proceedings for such
purposes, (iii) of the receipt of any comments from the Commission in
respect of the Registration Statement, any such preliminary prospectus or
the Prospectus, or requesting the amendment or supplementation of the
Registration Statement, any such preliminary prospectus or the Prospectus
or additional information, (iv) of any action by any governmental authority
altering, suspending or otherwise affecting any authorization, consent,
approval or waiver issued in connection with the Notes and (v) of the
commencement of any litigation or administrative proceeding relating to the
issue and sale of the Notes. If the Commission shall enter a stop order or
any order preventing or suspending the use of any such preliminary
prospectus or the Prospectus at any time, or shall initiate any proceedings
for such purposes, the Company will make every reasonable effort to prevent
the issuance of such order and, if issued, to obtain the lifting thereof.
If the Prospectus is amended or supplemented as a result of the filing
under the Exchange Act of any document incorporated by reference in the
Prospectus, no Agent shall be obligated to solicit offers to purchase Notes
so long as it is not reasonably satisfied with such documents.
(c) REVISIONS TO PROSPECTUS OR REGISTRATION STATEMENT. During any
Marketing Period, the Company will comply with all requirements imposed
upon it by the Act and the Exchange Act, as now and hereafter amended, as
from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Notes as contemplated by the provisions
hereof and the Prospectus; and if during any Marketing Period any event
occurs or condition exists as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances then existing, not misleading, or
if, in the opinion of the Agents (of which opinion such Agents shall
immediately notify the Company by telephone with confirmation in writing)
or in the opinion of the Company, during such period it is necessary to
amend or supplement the Registration Statement or the Prospectus, as then
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amended or supplemented, to comply in all material respects with the Act or
the Exchange Act, the Company will immediately notify each of the Agents by
telephone (with confirmation in writing) to suspend solicitation of offers
to purchase Notes and, if so notified by the Company, the Agents shall
forthwith suspend such solicitation and cease using the Prospectus, as then
amended or supplemented. If the Company shall decide to amend or
supplement the Registration Statement or Prospectus, as then amended or
supplemented, it shall so advise the Agents promptly by telephone (with
confirmation in writing) and, at its expense, shall prepare and cause to be
filed promptly with the Commission an amendment or supplement to the
Registration Statement or Prospectus, as then amended or supplemented, that
will correct such statement or omission or effect such compliance and will
supply such amended or supplemented Prospectus to the Agents in such
quantities as they may reasonably request. If any documents, certificates,
opinions and letters furnished to the Agents pursuant to Sections 6(b),
6(c) and 6(d) in connection with the preparation and filing of such
amendment or supplement are satisfactory in all respects to the Agents,
upon the filing with the Commission of such amendment or supplement to the
Prospectus or upon the effectiveness of an amendment to the Registration
Statement, the Agents will resume the solicitation of offers to purchase
Notes hereunder. Notwithstanding any other provision of this Section 3(c),
until the distribution of any Notes an Agent may own as principal has been
completed, if any event described above in this paragraph (c) occurs, the
Company will, at its own expense, forthwith prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration
Statement or Prospectus, as then amended or supplemented, satisfactory in
all respects to such Agent, will supply such amended or supplemented
Prospectus to such Agent in such quantities as it may reasonably request
and shall furnish to such Agent pursuant to Sections 6(b), 6(c) and 6(d)
such documents, certificates, opinions and letters as it may request in
connection with the preparation and filing of such amendment or supplement;
provided that should such event described above in this paragraph (c)
relate solely to activities of any Agent or Agents, then such Agent or
Agents, as the case may be, shall assume the expense of preparing and
furnishing any such amendment or supplement.
(d) EARNING STATEMENT. As soon as practicable the Company will make
generally available to its security holders and deliver to each of the
Agents an earning statement which shall satisfy the provisions of
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder, including Rule 158 issued thereunder.
(e) DELIVERY OF SIGNED REGISTRATION STATEMENT AND OTHER DOCUMENTS.
The Company will deliver to each of the Agents and to counsel for the
Agents without charge as promptly as practicable a signed copy of the
Registration Statement and all amendments thereto including all exhibits
filed therewith and signed consents, certificates and opinions of
accountants and of any other persons named in the Registration Statement as
having prepared, certified or reviewed any part thereof, and will deliver
to the Agents without charge such number of unsigned copies of the
Registration Statement, without exhibits, and of all amendments thereto, as
the Agents may reasonably request. The
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Company will deliver to or upon order of the Agents without charge as many
copies of each preliminary prospectus relating to the Notes as the Agents
may reasonably request and as many copies of the Prospectus in final form,
or as thereafter amended or supplemented, as the Agents may reasonably
request.
(f) BLUE SKY QUALIFICATIONS. The Company will cooperate with the
Agents in connection with the qualification of the Notes for sale under the
securities laws of such jurisdictions as the Agents may reasonably
designate and the continuance of such qualifications in effect so long as
required for the distribution of the Notes, provided that the Company shall
not be required to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified or to submit to any requirement which it deems
unduly burdensome. The Company will advise each of the Agents promptly of
any order or communication of any public authority addressed to the Company
suspending or threatening to suspend the qualification of the Notes for
sale, or the eligibility of the Notes for purchase by such institutions, in
any jurisdiction.
(g) COPIES OF REPORTS AND FINANCIAL STATEMENTS. For the period
ending five years from the Commencement Date, the Company will deliver to
each of the Agents (i) as soon as available, a copy of each report of the
Company mailed to public security holders or filed with the Commission and
(ii) such additional information concerning the business and financial
condition of the Company as such agent may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission).
(h) APPLICATION OF NET PROCEEDS. The Company will apply the net
proceeds from the sale of the Notes for the purposes set forth in the
Prospectus.
(i) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not be
required to comply with the provisions of paragraphs (c) or (g) of this
Section 3 during any Marketing Period from the time the Agents shall have
suspended solicitation of purchases of the Notes in their capacity as
agents pursuant to a request from the Company pursuant to Section 2(b)
hereof to the time the Company shall determine that solicitation of
purchases of the Notes should be resumed or shall subsequently enter into a
new Purchase Agreement with an Agent, PROVIDED, HOWEVER, that compliance
with such paragraphs shall be required for any portion of such period
during which any Agent shall hold any Notes as principal purchased pursuant
to the Purchase Agreement.
(j) DOWNGRADING. The Company shall notify the Agents promptly in
writing of any downgrading, or its receipt of any notice of any intended or
potential downgrading or of any review for possible change that does not
indicate the direction of the possible change, in the rating accorded any
of the Company's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
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(k) During the period beginning the date of any Purchase Agreement
and continuing to and including the Settlement Date with respect to such
Purchase Agreement, the Company will not, without such Agent's prior
written consent, offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company or warrants to purchase debt securities of
the Company substantially similar to such Notes (other than (i) Notes that
are to be sold pursuant to such Purchase Agreement, (ii) Notes previously
agreed to be sold by the Company and (iii) commercial paper issued in the
ordinary course of business), except as may otherwise be provided in such
Purchase Agreement.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay (i) the costs
incident to the authorization, issuance, sale and delivery of the Notes and any
taxes payable in connection therewith, (ii) the costs incident to the
preparation, printing and filing under the Act of the Registration Statement and
any amendments and exhibits thereto and the Prospectus and any amendments and
supplements thereto, (iii) the costs incident to the preparation, printing and
filing of any document and any amendments and exhibits thereto required to be
filed by the Company under the Exchange Act, (iv) the costs of distributing the
Registration Statement, as originally filed, and each amendment and
post-effective amendment thereof (including exhibits), any preliminary
prospectus, the Prospectus, any supplement or amendment to the Prospectus and
any documents incorporated by reference in any of the foregoing documents, (v)
the costs and expenses incident to the preparation, execution and delivery of
the Indenture and the Supplemental Indenture, (vi) the fees and disbursements of
the Trustee, any paying agent, any calculation agent, and any other agents
appointed by the Company, and their respective counsel, (vii) the costs and fees
in connection with the listing of the Notes on any securities exchange, (viii)
the cost of any filings with the National Association of Securities Dealers,
Inc., (ix) the fees and disbursements of counsel for the Company, counsel for
the Agents, counsel for the Trustee and the Company's accountants, (x) the fees
paid to rating agencies in connection with the rating of the Notes, (xi) the
fees and expenses of qualifying the Notes under the securities laws of the
several jurisdictions as provided in Section 3(f) hereof and of preparing and
printing and distributing a Blue Sky Memorandum, (xii) all advertising expenses
in connection with the offering of the Notes incurred with the consent of the
Company, (xiii) all reasonable out-of-pocket expenses incurred by the Agents in
connection with the transactions contemplated hereunder, (xiv) any expenses
incurred by the Company in connection with a "road show" presentation to
potential investors and (xv) other costs and expenses incident to the
performance of the Company's obligations under this Agreement.
SECTION 5. CONDITIONS OF OBLIGATIONS OF AGENTS. The obligation of the
Agents, as the agents of the Company, under this Agreement to solicit offers to
purchase the Notes, the obligation of any person who has agreed to purchase
Notes to make payment for and take delivery of Notes, and the obligation of any
Agent to purchase Notes pursuant to any Purchase Agreement, is subject to the
accuracy, on each Settlement Date and in the case of an Agent's obligation to
solicit offers to purchase Notes, at the time of such solicitation, of the
representations and warranties of the Company contained herein, to the accuracy
of the statements of the Company's officers made in any certificate furnished
pursuant to the provisions
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hereof, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) REGISTRATION STATEMENT. The Registration Statement shall have
become effective under the Act and the Indenture shall have been qualified
under the Trust Indenture Act, and no stop order suspending the
effectiveness of the Registration Statement or the qualification of the
Indenture, or order preventing or suspending the use of any Prospectus,
shall have been issued and no proceeding for that purpose shall have been
initiated or, to the knowledge of the Company or the Agents, contemplated
or threatened by the Commission; any request for additional information on
the part of the Commission (to be included in the Registration Statement or
the Prospectus or otherwise) shall have been complied with; and no
amendment to the Registration Statement or Prospectus shall have been filed
to which the Agents shall have reasonably objected, in writing, after
having received notice pursuant to Section 3(a).
(b) REGULATORY APPROVALS. There shall be in full force and effect
appropriate orders or decrees of the Public Service Commission of Nevada
and the California Public Utilities Commission (or such other regulatory
bodies as may subsequently have jurisdiction) authorizing to the extent
required by law the offering, issuance and sale of the Notes as herein
provided. Any such decision, order or decree issued after the date hereof
shall contain no condition inconsistent with the provisions hereof or
reasonably unacceptable to the Agents (it being understood and agreed that
no such order or decree in effect on the date of this Agreement contains
any such unacceptable provision).
(c) ABSENCE OF CERTAIN CHANGES. Subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any downgrading nor shall any notice
have been given of any intended or potential downgrading or of any review
for possible change that does not indicate the direction of the possible
change, in the ratings accorded the Company's debt securities by Moody's
Investors Service, Inc., Standard and Poor's Corporation or Duff & Phelps,
Inc., or, except as contemplated in the Prospectus, any change in the
capital stock, short-term debt or long-term debt of the Company, or any
adverse change or any development involving a prospective adverse change in
the condition (financial or other), net worth or results of operations of
the Company and its subsidiaries, considered as one enterprise, which, in
any such event, in the Agents' judgment, is material and adverse and that
makes it, in the judgment of such Agents, impracticable to market the Notes
on the terms and in the manner contemplated by the Prospectus, as so
amended or supplemented, or materially impairs the investment quality of
the Notes.
(d) LEGAL MATTERS SATISFACTORY TO COUNSEL. The authorization and
issuance of the Notes, the Indenture, the Mortgage Indenture, the Mortgage
Bonds, the Registration Statement, the Prospectus and all corporate
proceedings and other legal matters incident thereto shall be satisfactory
in all respects to counsel for the Agents, and the Company shall have
furnished to counsel for the Agents such documents as they may reasonably
14
<PAGE>
request to enable them to be satisfied with respect to the matters referred
to in this subparagraph and to pass upon such matters.
(e) OPINION OF CHOATE, HALL & STEWART. On the Commencement Date, the
Agents shall have received the opinion, addressed to the Agents and dated
the Commencement Date, of Choate, Hall & Stewart, special counsel for the
Company, in the form set forth in EXHIBIT D to this Agreement.
(f) OPINION OF WOODBURN AND WEDGE. On the Commencement Date, the
Agents shall have received the opinion, addressed to the Agents and dated
the Commencement Date, of Woodburn and Wedge, counsel for the Company in
the state of Nevada, in the form set forth in EXHIBIT E to this Agreement.
(g) OPINION OF GRAHAM & JAMES LLP. On the Commencement Date, the
Agents shall have received the opinion, addressed to the Agents and dated
the Commencement Date, of Graham & James LLP, counsel for the Company in
the State of California, in the form set forth in EXHIBIT F to this
Agreement.
(h) OFFICERS' CERTIFICATE. The Company shall have furnished to the
Agents on the Commencement Date a certificate, dated the Commencement Date
as though made at and as of the Commencement Date, of its President or a
Vice President and of a principal financial or accounting officer of the
Company, covering the matters set forth in EXHIBIT G to this Agreement.
(i) ACCOUNTANTS' LETTERS. The Company shall have furnished to the
Agents on the Commencement Date a letter from its independent accountants,
addressed jointly to the Company and the Agents and dated the Commencement
Date, of the type described in the American Institute of Certified Public
Accountants Statement on Auditing Standards No. 72, covering specified
financial statement items and procedures set forth in EXHIBIT H to this
Agreement.
(j) ADDITIONAL CONDITIONS. There shall not have occurred: a
suspension or material limitation in trading in securities generally on or
by the New York Stock Exchange, the American Stock Exchange or the over-
the-counter market or the establishment of minimum prices on such exchanges
or market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction; suspension of trading
of any securities of the Company on any exchange or in any over-the-counter
market; a general moratorium on commercial banking activities declared by
either Federal or New York State authorities; any outbreak or escalation of
major hostilities in which the United States is involved, any declaration
of war by Congress or any other substantial national calamity or emergency;
if the effect of any such occurrence in the judgment of the Agents makes it
impracticable or inadvisable to proceed with the solicitation of offers to
purchase Notes or the purchase of Notes from the Company as principal
pursuant to the applicable Purchase Agreement, as the case
15
<PAGE>
may be, on the terms and in the manner contemplated by the Prospectus, as
amended or supplemented.
(k) OPINION OF ROPES & GRAY. At the Commencement Date, the Agent
shall have received the opinion, addressed to the Agents and dated the
Commencement Date of Ropes & Gray, counsel for the Agents, in form and
substance satisfactory to the Agents with respect to the incorporation of
the Company, the validity of the Notes, the Registration Statement, the
Prospectus and other related matters as they may require, and the Company
shall have furnished to such counsel such documents as the Agents may
reasonably request for the purpose of enabling them to pass upon such
matters.
(l) OTHER INFORMATION AND DOCUMENTATION. Prior to the Commencement
Date, the Company shall have furnished to the Agents such further
information, certificates and documents as the Agents or counsel for the
Agents may have reasonably requested.
Ropes & Gray and Choate, Hall & Stewart, in giving their opinions pursuant
to this Section 5, may rely upon the opinion of Graham & James LLP as to all
legal conclusions affected by the laws of California, and upon the opinion of
Woodburn and Wedge as to all legal conclusions affected by the laws of Nevada.
SECTION 6. ADDITIONAL COVENANTS OF THE COMPANY. The Company covenants and
agrees that:
(a) ACCEPTANCE OF OFFER AFFIRMS REPRESENTATIONS AND WARRANTIES. Each
acceptance by it of an offer for the purchase of Notes shall be deemed to
be an affirmation that the representations and warranties of the Company
contained in this Agreement and in any certificate theretofore given to the
Agents pursuant hereto are true and correct at the time of such acceptance,
and an undertaking that such representations and warranties will be true
and correct at the time of delivery to the purchaser or his agent of the
Notes relating to such acceptance as though made at and as of each such
time (and such representations and warranties shall relate to the
Registration Statement and the Prospectus as amended or supplemented to
each such time).
(b) SUBSEQUENT DELIVERY OF OFFICERS' CERTIFICATES. The Company
agrees that during each Marketing Period, each time that the Registration
Statement or the Prospectus shall be amended or supplemented (other than by
a Pricing Supplement), each time the Company sells Notes to an Agent as
principal and the applicable Purchase Agreement specifies the delivery of
an officers' certificate under this Section 6(b) as a condition to the
purchase of Notes pursuant to such Purchase Agreement and each time the
Company files with the Commission any document incorporated by reference
into the Prospectus (other than any Current Report on Form 8-K unless an
Agent shall otherwise reasonably request), the Company shall submit to the
Agents and their counsel a certificate of the President or Vice President
or a principal financial or accounting officer of the Company, (i) as of
the date of such amendment, supplement and Time of Delivery
16
<PAGE>
relating to such sale or filing or (ii) if such amendment, supplement or
filing was not filed during a Marketing Period, as of the first day of the
next succeeding Marketing Period, representing that the statements
contained in the certificate referred to in Section 5(h) hereof which was
last furnished to the Agents are true and correct at the time of such
amendment, supplement or filing, as the case may be, as though made at and
as of such time (except that such statements shall be deemed to relate to
the Registration Statement and the Prospectus as amended and supplemented
at such time) or, in lieu of such certificate, a certificate of the same
tenor as the certificate referred to in said Section 5(h), modified as
necessary to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such certificate.
(c) SUBSEQUENT DELIVERY OF LEGAL OPINIONS. The Company agrees that
during each Marketing Period, each time that the Registration Statement or
the Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), each time the Company sells Notes to an Agent as principal and
the applicable Purchase Agreement specifies the delivery of legal opinions
under this Section 6(c) as a condition to the purchase of Notes pursuant to
such Purchase Agreement and each time the Company files with the Commission
any document incorporated by reference into the Prospectus (other than any
Current Report on Form 8-K unless an agent shall otherwise reasonably
request), the Company shall (i) concurrently with such amendment,
supplement and Time of Delivery relating to such sale or filing or (ii) if
such amendment, supplement or filing was not filed during a Marketing
Period, on the first day of the next succeeding Marketing Period, furnish
the Agents and their counsel with the written opinions of counsel to the
Company, addressed to the Agents and dated the date of delivery of such
opinion, in form satisfactory to the Agents, of the same tenor as the
opinions referred to in Sections 5(e), 5(f) and 5(g) hereof, respectively,
but modified, as necessary, to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of delivery of such
opinion; PROVIDED, HOWEVER, that in lieu of such opinions, such counsel may
furnish the Agents and their counsel with a letter to the effect that the
Agents may rely on any prior opinion of such counsel to the same extent as
though it were dated the date of such letter authorizing reliance (except
that statements in such prior opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented to the
time of delivery of such letters authorizing reliance).
(d) SUBSEQUENT DELIVERY OF ACCOUNTANTS' LETTERS. The Company agrees
that during each Marketing Period, each time that the Registration
Statement or the Prospectus shall be amended or supplemented to include
additional financial information derived from the books and records of the
Company, each time the Company sells Notes to an Agent as principal and the
applicable Purchase Agreement specifies the delivery of letters under this
Section 6(d) as a condition to the purchase of Notes pursuant to such
Purchase Agreement and each time the Company files with the Commission any
document incorporated by reference into the Prospectus which contains
additional financial information derived from the books and records of the
Company, the Company shall cause the Company's independent public
accountants to furnish the Agents and their
17
<PAGE>
counsel (i) concurrently with such amendment, supplement and Time of
Delivery relating to such sale or filing or (ii) if such amendment,
supplement or filing was not filed during a Marketing Period, on the first
day of the next succeeding Marketing Period, a letter, addressed jointly to
the Company and the Agents and dated the date of delivery of such letter,
in form and substance of the type described in the relevant statements of
auditing standards, currently American Institute of Certified Public
Accountants Statement on Auditing Standards No. 72, and of the same tenor
as the letters referred to in Section 5(i) hereof but modified to relate to
the Registration Statement and the Prospectus, as amended and supplemented
to the date of such letter, with such changes as may be necessary to
reflect changes in the financial statements and other information derived
from the accounting records of the Company; PROVIDED, HOWEVER, that if the
Registration Statement or the Prospectus is amended or supplemented solely
to include financial information as of and for a fiscal quarter, said
outside auditors may refer to their previously issued letter, shall
reaffirm all statements made in that letter and may limit the scope of such
additional letter to the unaudited consolidated financial statements
included in such amendment or supplement and certain agreed procedures, if
any, of the type described in the American Institute of Certified Public
Accountants Statement on Auditing Standards No. 72, covering specified
financial statement items and procedures set forth in EXHIBIT H to this
Agreement.
(e) OPINIONS ON SETTLEMENT DATE. On any Settlement Date, the Company
shall, if requested by the Agent that solicited or received the offer to
purchase any Notes being delivered on such Settlement Date, furnish such
Agent and its counsel with the written opinions of counsel to the Company,
addressed to the Agents and dated such settlement date, in form
satisfactory to the Agents, of the same tenor as the opinions referred to
in Sections 5(e), 5(f) and 5(g) hereof, respectively, but modified, as
necessary, to relate to the Prospectus relating to the Notes to be
delivered on such settlement date; PROVIDED, HOWEVER, that in lieu of such
opinions, such counsel may furnish such Agent and its counsel with a letter
to the effect that such Agent may rely on any prior opinion of such counsel
to the same extent as though it were dated such settlement date (except
that statements in such prior opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented to the
time of delivery of such letter authorizing reliance).
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<PAGE>
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Agent and each
person, if any, who controls such Agent within the meaning of the Act or
the Exchange Act from and against any losses, claims, damages or
liabilities and any action in respect thereof to which such Agent or such
controlling person may become subject, under the Act or otherwise, with
respect to the Notes, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Agent and each
such controlling person for any legal or other expenses reasonably incurred
by such Agent or such controlling person in connection with investigating
or defending against any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the
Prospectus, or such amendment or such supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
specifically for use in the preparation thereof, or as to any statement in
or omission from the Statement of Eligibility and Qualification (Form T-1)
of the Trustee under the Indenture; and PROVIDED, FURTHER, that, insofar as
it relates to the Prospectus, the indemnity agreement contained in this
Section 7(a) shall not inure to the benefit of any Agent or any person who
controls such Agent on account of any losses, claims, damages or
liabilities (or actions in respect thereof) arising from the sale of Notes
by such Agent pursuant to a Purchase Agreement to any person if a copy of
the Prospectus, as amended or supplemented, shall not have been sent or
given to such person with or prior to the written confirmation of the sale
involved to the extent that the Prospectus, as amended or supplemented, if
so sent or delivered, would have cured the defect in the Prospectus giving
rise to such losses, claims, damages, liabilities or actions in respect
thereof; and PROVIDED, FURTHER, that if, at any time after the date of
filing the Prospectus or any amendment or supplement to the Prospectus with
the Commission, any event shall have occurred as a result of which the
Prospectus as then amended or supplemented ("Current Prospectus") would
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, and if the Company shall have furnished to any Agent copies
of an amended Prospectus ("Amended Prospectus") or of a supplement to be
attached to or furnished with the Current Prospectus ("Supplement"), to
which the Agent shall not have objected pursuant to Section 5(a) hereof,
for delivery in connection with offers and sales of the Notes, the
indemnity agreement contained in this Section 7(a), insofar as it relates
to the Current Prospectus, shall not inure to the benefit of such Agent on
account of any losses, claims, damages, liabilities or actions in respect
thereof arising from the sale of Notes
19
<PAGE>
by such Agent to any person subsequent to the time such copies have been
so furnished to such Agent, if a copy of the Amended Prospectus or the
Supplement, as the case may be, shall not have been sent or given to such
person with or prior to the written confirmation of the sale involved, to
the extent that the Amended Prospectus or the Supplement, if so sent or
delivered, would have cured the defect in the Current Prospectus giving
rise to such losses, claims, damages, liabilities or actions in respect
thereof. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, each of its directors, each of its officers who
has signed the Registration Statement and each person, if any, who controls
the Company within the meaning of the Act or the Exchange Act, against any
losses, claims, damages or liabilities and any action in respect thereof to
which the Company or any such director, officer or controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Prospectus or such amendment or such
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Agent specifically for use therein, (ii)
in the case of the sale of Notes by such Agent pursuant to a Purchase
Agreement to any person, the failure of such Agent to send or give to such
person a copy of the Prospectus, as amended or supplemented, with or prior
to the written confirmation of the sale involved to the extent that the
Prospectus, as amended or supplemented, if so sent or delivered, would have
cured the defect in the Prospectus giving rise to such losses, claims,
damages, liabilities or actions, or (iii) the failure of such Agent to send
or deliver to any person an Amended Prospectus or Supplement, with or prior
to the written confirmation of a sale pursuant to a Purchase Agreement, to
which Amended Prospectus or Supplement the Agent shall not have objected
pursuant to Section 5(a) hereof and which the Company shall have furnished
to such Agent, if any event shall have occurred as a result of which (x)
the Current Prospectus would include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made when such
Prospectus is delivered, not misleading and (y) the Amended Prospectus or
Supplement, as the case may be, so sent or delivered, would have cured the
defect in the Current Prospectus giving rise to such losses, claims,
damages, liabilities or actions. This indemnity agreement will be in
addition to any liability which such Agents may otherwise have.
20
<PAGE>
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 7. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate in, and, to the extent that it may wish, jointly with any
other indemnifying party, similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section 7 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless, in the case of an indemnification obligation arising
under subparagraph (a) of this Section 7, (i) the employment of additional
counsel has been authorized in writing by the Company in connection with
defending such action, or (ii) the Company and such Agent or controlling
person are advised by such additional counsel that such Agent or
controlling person has available defenses involving a potential conflict
with the interests of the Company, in either of which events, the fees and
expenses of such additional counsel shall be borne by the Company.
(d) If the indemnification provided for in this Section 7 is
unavailable (or insufficient to hold harmless an indemnified party) under
subparagraph (a) or (b) above (by reason of a failure of the indemnified
party to give a notice required by subparagraph (c) above or for any other
reason whatever) to a party that would have been an indemnified party under
subparagraph (a) or (b) above ("indemnified party") in respect of any
losses, claims, damages, liabilities or actions referred to therein, then
each party that would have been an indemnifying party thereunder
("indemnifying party") shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or actions in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and each Agent on the other from the offering
of the Notes to which such loss, claim, damage or liability (or action in
respect thereof) relates and the relative fault of the Company on the one
hand and each Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
actions, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each Agent on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company bear to the total commissions (or discounts) received by each Agent
with respect to such offering. The relative fault of the Company on the
one hand and each Agent on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
21
<PAGE>
relates to information supplied by the Company or by such Agent and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. Each Agent's obligation
to contribute pursuant to this Section 7 shall be several in the proportion
that the principal amount of the Notes the sale of which by or through such
Agent gave rise to such losses, claims, damages or liabilities bears to the
aggregate principal amount of the Notes the sale of which by or through any
Agent gave rise to such losses, claims, damages or liabilities, and not
joint. The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this subparagraph (d) were determined
by pro rata allocation (even if the Agents were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subparagraph (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or actions referred to
above in this subparagraph (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim (which shall be
limited as provided in subparagraph (c) above if the indemnifying party has
assumed the defense of any such action in accordance with the provisions
thereof). Notwithstanding the provisions of this Section 7, no Agent shall
be required to contribute any amount in excess of the amount by which the
total price at which the Notes that were offered and sold to the public
through such Agent exceeds the amount of any damages which such Agent has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
SECTION 8. STATUS OF EACH AGENT. In soliciting offers to purchase the
Notes from the Company pursuant to this Agreement (other than in respect of any
Purchase Agreement), each Agent is acting individually and not jointly and is
acting solely as agent for the Company and not as principal. Each Agent will
make reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes from the Company has been solicited by
such Agent and accepted by the Company, but such Agent shall have no liability
to the Company in the event any such purchase is not consummated for any reason.
If the Company shall default in its obligations to deliver Notes to a purchaser
whose offer it has accepted, the Company shall (a) hold the Agents harmless
against any loss, claim or damage arising from or as a result of such default by
the Company and (b), in particular, pay to the Agents any commission to which
they would be entitled in connection with such sale.
SECTION 9. REPRESENTATIONS AND WARRANTIES TO SURVIVE DELIVERY. All
representations and warranties of the Company contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of the
termination or cancellation of this Agreement or any investigation made
22
<PAGE>
by or on behalf of any Agent or any person controlling such Agent or by or on
behalf of the Company, and shall survive each delivery of and payment for any of
the Notes.
SECTION 10. TERMINATION. The appointment of an Agent and the obligations
of such Agent under this Agreement may be terminated at any time either by the
Company or by such Agent upon the giving of one day's written notice of such
termination to such Agent or the Company, as the case may be. The provisions of
Sections 2(c), 3(d), 3(f), 3(g), 4, 7, 8, 9, 12, 13 and 14 hereof shall survive
any such termination.
SECTION 11. ADDITIONAL AGENTS. The Company may appoint one or more
additional agents for the purpose of soliciting or receiving offers to purchase
the Notes from the Company by others; PROVIDED that any such additional agent
shall become a party to this Agreement prior to soliciting or receiving offers
to purchase the Notes.
SECTION 12. NOTICES. Except as otherwise provided herein, all notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Agents shall be directed to them as follows:
Lehman Brothers Inc., 3 World Financial Center, New York, New York, 10285,
Attention: Medium-Term Note Department, Telephone No.: (212) 526-2040, Telecopy
No.: (212) 528-1718; UBS Securities LLC, 299 Park Avenue, New York, New York
10171, Attention: Richard Messina, Telephone No.: (212) 821-4542, Telecopy No.:
(212) 821-3667; and A.G. Edwards & Sons, Inc., One North Jefferson Avenue, St.
Louis, Missouri, Attention: ________________, Telephone No.: _________________,
Telecopy No.: ___________________; notices to the Company shall be directed to
it as follows: 6100 Neil Road, P.O. Box 30150, Reno, Nevada 89520, Attention:
Richard K. Atkinson, Telephone No.: (702) 689-4358, Telecopy No.: (702) 689-
5462; or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 12.
SECTION 13. BINDING EFFECT; BENEFITS. This Agreement shall be binding
upon each Agent, the Company, and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control any Agent within
the meaning of the Act or the Exchange Act, and (b) the indemnity agreement of
the Agents contained in Section 7 hereof shall be deemed to be for the benefit
of directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of said Act or the Exchange Act. Nothing in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Section, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein. No purchaser of any of the
Notes from any Agent shall be construed as a successor or assign merely by
reason of such purchase.
SECTION 14. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed
by and construed in accordance with the laws of New York. This Agreement may be
executed by the
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parties on separate counterparts and the executed counterparts shall together
constitute a single instrument.
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
SIERRA PACIFIC POWER COMPANY
By:
------------------------------------
(Title)
CONFIRMED AND ACCEPTED, as of the date first
above written:
LEHMAN BROTHERS INC.
By:
-----------------------------
(Title)
A.G. EDWARDS & SONS, INC.
By:
-----------------------------
(Title)
UBS SECURITIES LLC
By:
-----------------------------
(Title)
24
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EXHIBIT A
SIERRA PACIFIC POWER COMPANY
COLLATERALIZED MEDIUM-TERM NOTES, SERIES D
PURCHASE AGREEMENT
------------------
____________,19__
[Agent's Name]
Dear Sirs:
Sierra Pacific Power Company (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated
January __, 1997 (the "Distribution Agreement"), between the Company on the
one hand and Lehman Brothers Inc., A.G. Edwards & Sons, Inc. and UBS
Securities LLC (the "Agents") on the other, to issue and sell to ____________
the securities specified in the Schedule hereto (the "Purchased Securities").
Each of the provisions of the Distribution Agreement not specifically
related to the solicitation by the Agents, as agents of the Company, of
offers to purchase Securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Purchase Agreement to the
same extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto
an agent of the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase securities from the
Company, solely by virtue of its execution of this Purchase Agreement. Each
of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Purchase Agreement, except that
each representation and warranty in Section 1 of the Distribution Agreement
which makes reference to the Prospectus shall be deemed a representation and
warranty relation the Prospectus as amended and supplemented as of the date
hereof to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Agent(s)] and [Agent(s)] agree[s] to purchase from the
Company the Purchased Securities, at the time and place, in the principal amount
and at the purchase price set forth in the Schedule hereto.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us three counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
SIERRA PACIFIC POWER COMPANY
By:
-------------------------------
Accepted in New York, New York
as of the date hereof:
[Agent]
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<PAGE>
SCHEDULE TO EXHIBIT A
TITLE OF PURCHASED SECURITIES:
Collateralized Medium-Term Notes, Series D
AGGREGATE PRINCIPAL AMOUNT:
$
[Price to Public:]
Purchase Price by: [Agents]
% of the principal amount of the Purchased Securities [, plus
accrued interest from to ] [and accrued amortization, if any, from
to ]
METHOD OF AND SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[By certified or official bank check or checks, payable to the
order to the Company, in [New York Clearing House] [immediately available] funds
[By wire transfer to a bank account specified by the Company in
[next day] [immediately available] funds]
DATE AND TIME OF DELIVERY:
CLOSING LOCATION:
[SPECIFIED CURRENCY:]
MATURITY:
INTEREST RATE:
%
INTEREST PAYMENT DATES:
[months and dates]
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<PAGE>
DOCUMENTS TO BE DELIVERED:
The following documents referred to in the Distribution Agreement
shall be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to
in Section 5 (k).]
[(2) The opinion of counsel to the Company referred to in Section
5 (e).]
[(3) The opinion of counsel to the Company referred to in Section
5 (f).]
[(4) The opinion of counsel to the Company referred to in Section
5 (g).]
[(5) The officers' certificate referred to in Section 5 (h).]
[(6) The accountants' letter referred to in Section 5 (i).]
Other provisions (including Syndicate Provisions, if applicable):
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<PAGE>
EXHIBIT B
The Company agrees to pay each Agent a commission equal to the following
percentages of the principal amount of Notes sold to purchase solicited by such
Agent:
COMMISSION
(AS A PERCENTAGE OF
TERM PRINCIPAL AMOUNT)
---- -----------------
From 9 months to less than one 1 year .125%
From 1 year to less than 18 months .150
From 18 months to less than 2 years .200
From 2 years to less than 3 years .250
From 3 years to less than 4 years .350
From 4 years to less than 5 years .450
From 5 years to less than 6 years .500
From 6 years to less than 7 years .550
From 7 years to less than 10 years .600
From 10 years to less than 15 years .625
From 15 years to less than 20 years .675
20 years or more .750
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<PAGE>
EXHIBIT C
ADMINISTRATIVE PROCEDURES
The Collateralized Medium-Term Notes, Series D, due from nine months to 40
years from their issue date (the "Notes"), are to be offered on a continuing
basis by Sierra Pacific Power Company (the "Issuer"). Lehman Brothers, Lehman
Brothers, Inc., A.G. Edwards & Sons, Inc. and UBS Securities LLC, as agents,
have each agreed to use reasonable efforts to solicit offers to purchase the
Notes. No Agent will be obligated to purchase Notes for its own account. The
Notes are being sold pursuant to a Distribution Agreement, dated January __,
1997 (the "Agency Agreement"), among the Issuer and Agents, and will be issued
pursuant to an Indenture, dated as of June 1, 1992, as supplemented (the
"Indenture"), between the Issuer and Bankers Trust Company, as trustee (the
"Trustee"). The Notes will be secured by one or more series of first mortgage
bonds to be issued to and pledged by the Issuer with the Trustee and will have
been registered under the Securities Act of 1933, as amended (the "Act"). For a
description of the terms of the Notes and the offering and sale thereof, see the
sections entitled "Description of Notes," "Supplemental Plan of Distribution"
and "Glossary" in the Prospectus Supplement relating to the Notes, dated
January __, 1997, attached hereto and hereinafter referred to as the "Prospectus
Supplement," and the sections entitled "Description of Debt Securities," "United
States Taxation" and "Plan of Distribution" in the Prospectus relating to the
Notes, dated January __, 1997, attached hereto and hereinafter referred to as
the "Prospectus." Defined terms used herein but not defined herein shall have
the meanings assigned to them in the Distribution Agreement, the Prospectus or
the Prospectus Supplement, as appropriate.
The Notes will be represented either by Global Notes delivered to The
Depository Trust Company ("DTC") or its nominee and recorded in the book-entry
system maintained by DTC or such nominee ("Book-Entry Notes") or by certificates
delivered to the Holders thereof or Persons designated by such Holders
("Certificated Notes"). Notes for which interest is calculated on the basis of
a fixed interest rate are referred to herein as "Fixed Rate Notes." Notes for
which interest is calculated at a rate or rates determined by reference to an
interest rate formula are referred to herein as "Floating Rate Notes."
Notes which are issued at a price lower than the principal amount thereof
and which provide that upon redemption or acceleration of the Maturity thereof
an amount less than the principal thereof shall become due and payable are
referred to herein as "Original Issue Discount Notes." For special provisions
relating to original Issue Discount Notes and other Notes issued at a discount
for tax purposes, see the section entitled "Certain United States Federal Income
Tax Consequences - Original Issue Discount" in the Prospectus.
The Notes will be denominated in U.S. dollars and payments of principal of
and any premium and interest on the Notes will be made in U.S. dollars in the
manner indicated in the Prospectus and the Prospectus Supplement.
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Notes which provide that amounts payable by the Issuer in respect of
principal of or any premium or interest on the Notes shall be determined by
reference to the value, rate or price of one or more specified indices, are
referred to herein as "Indexed Notes." Specific information pertaining to the
method for determining the principal amounts payable, a historical comparison of
the value, rate or price of the specified index, indices and the face amount of
the Indexed Note and certain additional tax considerations will be described in
the applicable Pricing Supplement.
Administrative procedures and specific terms of the offering are explained
below. Part I indicates procedures applicable to all Notes; Part II indicates
specific procedures for Certificated Notes; and Part III indicates specific
procedures for Book-Entry Notes. Administrative and record-keeping
responsibilities will be handled for the Issuer by its Finance Division. The
Issuer will advise the Agents in writing of those persons handling
administrative responsibilities with whom the Agents are to communicate
regarding offers to purchase Notes and the details of their delivery.
PART I: PROCEDURES APPLICABLE TO ALL NOTES
ISSUE DATE
Each Note will be dated the date of its authentication. Each Note will
also bear an original issue date (the "Issue Date") which, with respect to any
such Note (or portion thereof), shall mean the date of its original issuance and
shall be specified therein. The Issue Date will remain the same for all Notes
subsequently issued upon transfer, exchange or substitution of a Note,
regardless of their dates of authentication.
PRICE TO PUBLIC
Except as otherwise specified in a Pricing Supplement, each Note will be
issued at 100% of principal amount.
MATURITIES
Each Note will mature on a date, selected by the purchaser and agreed to by
the Issuer, which will be at least nine months but not more than 40 years after
its Issue Date.
INTEREST PAYMENTS
Interest on each interest-bearing Note will be calculated and paid in the
manner described in such Note and in the Prospectus Supplement and the
applicable Pricing Supplement. Unless otherwise set forth therein, interest on
Fixed Rate Notes (including interest for partial periods) will be calculated on
the basis of a 360-day year of twelve 30-day months and will not accrue on the
31st day of any month. Interest on Floating Rate Notes, except as otherwise set
forth therein, will be calculated on the basis of actual days elapsed and a year
of 360 days, except that
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in the case of a Floating Rate Note for which the Base Rate is the Treasury
Rate, interest will be calculated on the basis of the actual number of days in
the year.
On the fifth Business Day immediately preceding each Interest Payment Date,
the Trustee will furnish the Issuer with the total amount of interest payments
to be made on such Interest Payment Date. The Trustee will provide monthly, to
the Issuer's Finance Division, a list of the principal and any premium and
interest to be paid on Notes maturing in the next succeeding month. The Trustee
will assume responsibility for withholding taxes on interest paid as required by
law.
REDEMPTION/REPAYMENT
If indicated in the applicable Pricing Supplement, the Notes of a
particular tenor will be subject to redemption in whole or in part (subject to
applicable minimum denominations), at the option of the Issuer on and after an
initial redemption date as set forth in the applicable Pricing Supplement and in
the applicable Note. The redemption price will be set forth in the applicable
Pricing Supplement and in the applicable Note.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Issuer and the Agents will discuss from time to time the rates to be
borne by the Notes that may be sold as a result of the solicitation of offers by
the Agents. Once any Agent has recorded any indication of interest in Notes
upon certain terms, and communicated with the Issuer, if the Issuer plans to
accept an offer to purchase Notes upon such terms, it will prepare a Pricing
Supplement to the Prospectus, as then amended or supplemented, reflecting the
terms of such Notes and, after approval from the Agents, will arrange to have 10
copies of the Pricing Supplement filed with, or transmitted by a means
reasonably calculated to result in the timely filing with, the Securities and
Exchange Commission (the "Commission") pursuant to Rule 424(b) under the Act.
The Issuer will supply at least 10 copies of the Prospectus, as then amended or
supplemented, and bearing such Pricing Supplement, to the Agent who presented
the offer (the "Presenting Agent") and will provide one copy thereof to the
Trustee by facsimile transmission. No settlements with respect to Notes upon
such terms may occur prior to such transmitting or filing and the Agents will
not, prior to such transmitting or filing, mail confirmations to customers who
have offered to purchase Notes upon such terms. After such transmitting or
filing, sales, mailing of confirmations and settlements may occur with respect
to Notes upon such terms, subject to the provisions of "Delivery of Prospectus"
below.
If the Issuer decides to post rates and a decision has been reached to
change interest rates, the Issuer shall promptly notify each Agent. Each Agent
will forthwith suspend solicitation of purchases. At that time, the Agents will
recommend and the Issuer will establish rates to be so "posted." Following
establishment of posted rates and prior to the transmitting or filing described
in the preceding paragraph, the Agents may only record indications of interest
in purchasing Notes at the posted rates. Once any Agent has recorded any
indication of interest in Notes at the posted rates and communicated with the
Issuer, if the Issuer plans to accept an
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<PAGE>
offer at the posted rates, it will prepare a Pricing Supplement reflecting such
posted rates, and after approval from the Agents, arrange to have 10 copies of
the Pricing Supplement filed with, or transmitted by means reasonably calculated
result in the timely filing with, the Commission and will supply at least 10
copies of the Prospectus, as then amended or supplemented, and bearing such
Pricing Supplement, to the Presenting Agent. No settlements at the posted rates
may occur prior to such transmitting or filing and the agents will not, prior to
such transmitting or filing, mail confirmations to customers who have offered to
purchase Notes at the posted rates. After such transmitting or filing, sales,
mailing of confirmations and settlements may resume, subject to the provisions
of "Delivery of Prospectus, below.
Outdated Pricing Supplements, and copies of the Prospectus to which they
are attached (other than those retained for files), will be destroyed.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
As provided in the Distribution Agreement, the Issuer may instruct the
Agents to suspend solicitation of offers to purchase at any time, and upon
receipt of at least one Business Day's prior notice from the Issuer, the Agents
will each forthwith suspend solicitation until such time as the Issuer has
advised it that solicitation of offers to purchase may be resumed.
If the Agents receive the notice from the Issuer contemplated by the second
paragraph of Section 2(b) or by 3(c) of the Distribution Agreement, they will
promptly suspend solicitation and will only resume solicitation as provided in
the Distribution Agreement. If the Issuer is required, pursuant to Section 3(c)
of the Distribution Agreement, to prepare an amendment or supplement, it will
promptly furnish each Agent with the proposed amendment or supplement; if the
Issuer decides to amend or supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly advise each Agent and will
furnish each Agent with the proposed amendment or supplement in accordance with
the terms of the Distribution Agreement. The Issuer will file such amendment or
supplement with the Commission, provide the Agents and the Trustee with copies
of any such amendment or supplement, confirm to the Agents that such amendment
or supplement has been filed with the Commission and advise the Agents that
solicitation may be resumed.
Any such suspension shall not affect the Issuer's obligations under the
Distribution Agreement; and in the event that at the time the Issuer suspends
solicitation of offers to purchase there shall be any offers already accepted by
the Issuer outstanding for settlement, the Issuer will have the sole
responsibility for fulfilling such obligations. The Issuer will in addition
promptly advise the Agents and the Trustee if such offers are not to be settled
and if copies of the Prospectus as in effect at the time of the suspension may
not be delivered in connection with the settlement of such offers.
ACCEPTANCE AND REJECTION OF OFFERS
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<PAGE>
Each Agent will promptly advise the Issuer, at its option orally or in
writing, of each reasonable offer to purchase Notes received by it, other than
those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, without notice to the Issuer, reject any offer received by it, in
whole or in part. The Issuer will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. If the
Issuer accepts or rejects an offer, in whole or in part, the Issuer will
promptly so notify the Presenting Agent.
CONFIRMATION
For each accepted offer, the Presenting Agent will issue a confirmation to
the purchaser, with a separate confirmation to the Issuer's Finance Division,
setting forth the Purchase Information (as defined under II below with respect
to Certificated Notes and III below with respect to Book-Entry Notes) and
delivery and payment instructions; PROVIDED, HOWEVER, that, in the case of the
confirmation issued to the purchaser, no confirmation shall be delivered to the
purchaser prior to the delivery of the Prospectus referred to below.
DETERMINATION OF SETTLEMENT DATE
The receipt of immediately available funds by the Issuer in payment for a
Note and (i) in the case of Certificated Notes, the authentication and issuance
of such Note and (ii) in the case of Book-Entry Notes, entry by the Presenting
Agent of an SDFS (defined in III below) deliver order through DTC's Participant
Terminal System to credit such Note to the account of a Participant purchasing,
or acting for the purchaser of, such Note, shall, with respect to such Note,
constitute "settlement." All offers accepted by the Issuer will be settled on
the third Business Day next succeeding the date of acceptance in accordance with
the "Details of Settlement" set forth below, unless otherwise agreed by the
purchaser and the Issuer. The settlement date shall be specified upon receipt
of an offer to purchase. Prior to 11:00 a.m., New York City time, on the
settlement date, the Issuer will instruct the Trustee to authenticate and
deliver the Notes no later than 2:15 p.m., New York City time, on that date.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or supplemented on the
date of delivery thereof (except as provided below) must be delivered to a
purchaser prior to or together with the earlier of the delivery of (i) the
written confirmation provided for above, and (ii) any Note purchased by such
purchaser. (For this purpose, entry of an SDFS deliver order through DTC's
Participant Terminal System to credit a Note to the account of a Participant
purchasing, or acting for the purchaser of, a Note shall be deemed to constitute
delivery of such Note.) Subject to the foregoing, it is anticipated that
delivery of the Prospectus, confirmation and Notes to the purchaser will be made
simultaneously at settlement. The Issuer shall ensure that the Presenting Agent
receives copies of the Prospectus and each amendment or supplement thereto
(including appropriate Pricing Supplements) in such quantities and within such
time limits as will enable the Presenting Agent to deliver such confirmation or
Note to a purchaser as contemplated by these procedures and in compliance with
the first sentence of this paragraph. If, since the
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<PAGE>
date of acceptance of a purchaser's offer, the Prospectus shall have been
supplemented solely to reflect any sale of Notes on terms different from those
agreed to between the Issuer and such purchaser or a change in posted rates not
applicable to such purchaser, such purchaser shall not receive the Prospectus as
supplemented by such new supplement, but shall receive the Prospectus as
supplemented to reflect the terms of the Notes being purchased by such purchaser
and otherwise as most recently amended or supplemented on the date of delivery
of the Prospectus.
AUTHENTICITY OF SIGNATURES
The Issuer will cause the Trustee to furnish the Agents from time to time
with the specimen signatures of each of the Trustee's officers, employees or
agents who have been authorized by the Trustee to authenticate Notes, but no
Agent will have any obligation or liability to the Issuer or the Trustee in
respect of the authenticity of the signature of any officer, employee or agent
of the Issuer or the Trustee on any Note or the Global Note (as defined in Part
III).
ADVERTISING EXPENSES
The Issuer will determine with the Agents the amount of advertising that
may be appropriate in offering the Notes. Advertising expenses will be paid by
the Issuer.
BUSINESS DAY; LONDON MARKET DAY
"Business Day" means any day which is not a Saturday or Sunday and is not a
day on which banking institutions are generally authorized or obligated by law
or executive order to close in The City of New York and, with respect to LIBOR
notes, a London Market Day. "London Market Day" means any day on which dealings
in deposits in U.S. Dollars are transacted in the London interbank market.
TRUSTEE NOT TO RISK FUNDS
Nothing herein shall be deemed to require the Trustee to risk or expend its
own funds in connection with any payment made to the Issuer, the Agent, DTC or
any Noteholder, it being understood by all parties that payments made by the
Trustee to the Issuer, the Agent, DTC or any holder of a Note shall be made only
to the extent that funds are provided to the Trustee for such purpose.
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<PAGE>
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
FORM AND DENOMINATIONS
The Certificated Notes shall be issued only in fully registered form in
denominations of $10,000 and integral multiples of $1,000 in excess thereof.
TRANSFERS AND EXCHANGES
A Certificated Note may be presented for transfer or exchange at the
principal corporate trust office of the Trustee in The City of New York.
Certificated Notes will be exchangeable for other Certificated Notes of any
authorized denominations and of like tenor and in a like aggregate principal
amount, upon surrender of the Certificated Notes to be exchanged at the
corporate trust office of the Trustee. Certificated Notes will not be
exchangeable for Book-Entry Notes.
PAYMENT AT MATURITY
Upon presentation of each Certificated Note at Maturity, the Trustee (or a
duly authorized Paying Agent) will pay the principal amount thereof, together
with any premium and accrued interest due at Maturity. Such payment will be
made in immediately available funds, PROVIDED, that the Certificated Note is
presented in time for the Paying Agent to make payment in such funds in
accordance with its normal procedures. The Issuer will provide the Trustee (and
any Paying Agent) with funds available for immediate use for such purpose.
Certificated Notes presented at Maturity will be canceled by the Trustee as
provided in the Indenture.
DETAILS FOR SETTLEMENT
For each offer for Certificated Notes accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer's Finance Division prior to
1:00 p.m., New York City time, on the Business Day preceding the settlement
date, by telephone, telex, facsimile transmission or other acceptable means, the
following information (the "Purchase Information"):
1. Exact name in which the Note or Notes are to be registered
("registered owner").
2. Exact address of registered owner and, if different, the address for
delivery, notices and payment of principal and any premium and
interest.
3. Taxpayer identification number of registered owner.
4. Principal amount of each Note in authorized denominations to be
delivered to registered owner.
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<PAGE>
5. In the case of Fixed Rate Notes, the interest rate of each Note; in
the case of Floating Rate Notes, the interest rate formula, the Spread
or Spread Multiplier (if any), the maximum or minimum interest rate
limitation (if any), the Calculation Agent, the Calculation Dates, the
Initial Interest Rate, the Interest Payment Dates, the Regular Record
Dates, the Index Maturity, the Interest Determination Dates and the
Interest Reset Dates, in each case, to the extent applicable with
respect to each Note.
6. Stated Maturity of each Note.
7. Redemption and/or repayment provisions, if any, of each Note,
including:
a. Initial Redemption Date;
b. Initial Redemption Price (% of par);
c. Amount (% of par) of decline and date;
d. Redemption Limitation Date.
8. Trade date of each Note.
9. Settlement date (Issue Date) of each Note.
10. Presenting Agent's commission (to be paid in the form of a discount
from the proceeds remitted to the Issuer upon settlement).
11. Price.
12. Any additional applicable terms of each Note.
The Issue Date of, and the settlement date for, Certificated Notes will be
the same. Before accepting any offer to purchase Certificated Notes to be
settled in less than three Business Days, the Issuer shall verify that the
Trustee will have adequate time to prepare and authenticate the Notes.
Immediately after receiving the details for each offer for Certificated
Notes from the Presenting Agent, the Issuer will, after recording the details
and any necessary calculations, communicate the Purchase Information by
telephone, telex, facsimile transmission or other acceptable means, to the
Trustee. Each such instruction given by the Issuer to the Trustee shall
constitute a continuing representation and warranty by the Issuer to the Trustee
and the Agents that (i) the issuance and delivery of such Notes have been duly
and validly authorized by the issuer and (ii) such Notes, when completed,
authenticated and delivered, shall constitute the valid
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and legally binding obligation of the Issuer. The Issuer will assign to and
enter on each Note a transaction number.
The Issuer will deliver to the Trustee a Certificated Note. The Trustee
will complete such Certificated Note and will authenticate such Certificated
Note and deliver it (with the confirmation) to such Agent, and such Agent will
acknowledge receipt of the Note in writing delivered to the Trustee.
SETTLEMENT: NOTE DELIVERIES AND CASH PAYMENT
The Issuer will deliver to the Trustee at the commencement of the program
and from time to time thereafter a supply of duly executed Certificated Notes
with preprinted control numbers adequate to implement the program. Upon the
receipt of appropriate documentation and instructions from the Issuer in
accordance with the applicable Officers' Certificate and verification thereof,
the Trustee will cause the Certificated Notes to be completed and authenticated
and hold the Certificated Notes for delivery against payment.
The Trustee will deliver the Certificated Notes, in accordance with
instructions from the Issuer, to the Presenting Agent, as the Issuer's agent,
for the benefit of the purchaser only against receipt. The Presenting Agent
will acknowledge receipt of the Notes through a broker's receipt. Delivery of
the Certificated Notes by the Trustee will be made only against such
acknowledgment of receipt from the Presenting Agent. Upon the Presenting
Agent's determination that such Note has been authenticated, delivered and
completed as aforesaid, the Presenting Agent will make, or cause to be made,
payment to the Issuer at such account of the Issuer as it may specify in
writing, in immediately available funds, of an amount equal to the principal
amount of such Notes, less the applicable commission. If the Presenting Agent
in any instance advances its own funds, the Issuer shall not use any of the
proceeds of such sale to acquire securities.
The Presenting Agent, as the Issuer's agent, will deliver the Notes (with
the written confirmation provided for above) to the purchaser thereof against
payment therefor by such purchaser in immediately available funds. Delivery of
any confirmation or Note will be made in compliance with "Delivery of
Prospectus" in Part I above.
FAILS
In the event that a purchaser shall fail to accept delivery of and make
payment for a Certificated Note on the settlement date, the Presenting Agent
will notify the Trustee and the Issuer, by telephone, confirmed in writing. If
such Certificated Note has been delivered to the Presenting Agent, as the
Issuer's agent, the Presenting Agent stall return such Note to the Trustee. If
funds have been advanced for the purchase of such Note, the Trustee will,
immediately upon receipt of such Note, debit the account of the Issuer for the
amount so advanced and the Trustee shall refund the payment previously made by
the Presenting Agent in immediately available funds. Such payments, will be
made on the settlement date, if possible,
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<PAGE>
and in any event not later than the Business Day following the settlement date.
If the fail shall have occurred for any reason other than the failure of the
Presenting Agent to provide the Purchase Information to the Issuer or to provide
a confirmation to the purchaser, the Issuer will reimburse the Presenting Agent
on an equitable basis for its loss of the use of funds during the period when
the funds were credited to the account of the Issuer.
Immediately upon receipt of the Certificated Note in respect of which the
fail occurred, the Trustee will make appropriate entries in its records to
reflect the fact that the Note was never issued and the Note will be canceled
and disposed of as provided in the Indenture.
PART III: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representations (the "Letter")
from the Issuer and the Trustee to DTC dated as of ________ __, 1997 and a
Medium-Term Note Certificate Agreement between the Trustee and DTC dated as of
October 21, 1988 and its obligations as a participant in DTC, including DTC's
Same-Day Funds Settlement System ("SDFS").
FORM, DENOMINATIONS AND REGISTRATION
All Book-Entry Notes of the same tenor and having the same Issue Date, will
be represented initially by a single note (a "Global Note") in fully registered
form without coupons. Book-Entry Notes will represent Notes denominated in U.S.
dollars. Global Notes will be issued in denominations of $10,000 and integral
multiples of $1,000 in excess thereof. Each Global Note will be registered in
the name of Cede & Co., as nominee for DTC, on the Security Register maintained
under the Indenture. The beneficial owner of a Book-Entry Note (or one or more
indirect participants in DTC designated by such owner) will designate one or
more participants in DTC (with respect to such Notes, the "Participants") to act
as agent or agents for such owner in connection with the book-entry system
maintained by DTC, and DTC will record in book-entry form, in accordance with
instructions provided by such Participants, a credit balance with respect to
such Note in the account of such Participants. The ownership interest of such
beneficial owner in such Note will be recorded through the records of such
Participants or through the separate records of such Participants and one or
more indirect participants in DTC.
CUSIP NUMBERS
The Issuer has arranged with the CUSIP Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau") for the reservation of a series of
CUSIP numbers (including tranche numbers), such series consisting of
approximately 900 CUSIP numbers and relating to Global Notes representing Book-
Entry Notes. The Issuer has obtained from the CUSIP Service Bureau a written
list of such reserved CUSIP numbers and has delivered it to
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the Trustee and DTC. The Trustee will assign CUSIP numbers serially to Global
Notes as described below under "Details for Settlement." DTC will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has
assigned to Global Notes. The Trustee will notify the Issuer at the time when
fewer than 100 of the reserved CUSIP numbers remain unassigned to the Global
Notes; and the Issuer will reserve an additional 900 CUSIP numbers for
assignment to Global Notes representing Book-Entry Notes. Upon obtaining such
additional CUSIP numbers, the Issuer shall deliver a list of such additional
CUSIP numbers to the Trustee and DTC.
TRANSFERS; AND EXCHANGES FOR THE PURPOSE OF CONSOLIDATION
Transfers of a Book-Entry Note will be accomplished by book entries made by
DTC and, in turn, by Participants (and, in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial transferors and transferees
of such Note.
The Trustee may upon notice to the Issuer deliver to DTC and the CUSIP
Service Bureau at any time a written notice (a copy of which shall be attached
to the Global Note resulting from such exchange) specifying (i) the CUSIP
numbers of two or more outstanding Global Notes that represent Book-Entry Notes
of the same tenor and having the same Issue Date, and for which interest (if
any) has been paid to the same date, (ii) a date occurring at least 30 days
after such written notice is delivered and at least 30 days before the next
Interest Payment Date (if any) for such Notes, on which such Global Notes shall
be exchanged for a single replacement Global Note and (iii) a new CUSIP number
to be assigned to such replacement Global Note. Upon receipt of such a notice,
DTC will send to its Participants (including the Trustee) a written
reorganization notice to the effect that such exchange will occur on such date.
Prior to the specified exchange date, the Trustee will deliver to the CUSIP
Service Bureau a written notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange date, the CUSIP numbers of
the Global Notes to be exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global Notes for a single Global
Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Global
Notes will, in accordance with CUSIP Service Bureau procedures, be canceled and
not immediately reassigned.
NOTICE OF INTEREST PAYMENT DATES AND REGULAR RECORD DATES
To the extent then known, on the first Business Day of March, June,
September and December of each year, the Trustee will deliver to the Issuer and
DTC a written list of Record Dates and Interest Payment Dates that will occur
with respect to Floating Rate Book-Entry Notes during the six-month period
beginning on such first Business Day.
C-11
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PAYMENTS OF PRINCIPAL AND INTEREST
(a) PAYMENTS OF INTEREST ONLY. Promptly after each Regular Record Date,
the Trustee will deliver to the Issuer and DTC a written notice specifying by
CUSIP number the amount of interest to be paid on each Global Note on the
following Interest Payment Date (other than an Interest Payment Date coinciding
with Maturity) and the total of such amounts. The Issuer will confirm with the
Trustee the amount payable on each Global Note on such Interest Payment Date.
DTC will confirm the amount payable on each Global Note on such Interest Payment
Date by reference to the daily or weekly bond reports published by Standard &
Poor's Corporation. The Issuer will pay to the Trustee the total amount of
interest due on such Interest Payment Date (other than at Maturity), and the
Trustee will pay such amount to DTC at times and in the manner set forth below
under "Manner of Payment."
(b) PAYMENTS AT STATED MATURITY. On or about the first Business Day of
each month, the Trustee will deliver to the Issuer and DTC a written list of
principal and interest to be paid on each Global Note maturing in the following
month. The Issuer, the Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to each such Global Note on or
about the third Business Day preceding the Stated Maturity of such Global Note.
The Issuer will pay to the Trustee, as the paying agent, the principal amount of
such Global Note, together with interest due at such Stated Maturity. Upon
surrender of a Global Note, the Trustee will pay such amounts to DTC at the
times and in the manner set forth below under "Manner of Payment." If any
Stated Maturity of a Global Note representing Book-Entry Notes is not a Business
Day, the payment due on such day shall be made on the next succeeding Business
Day and no interest shall accrue on such payment for the period from and after
such Stated Maturity. Promptly after payment to DTC of the principal and any
interest due at the Stated Maturity of such Global Note, the Trustee will cancel
such Global Note in accordance with the terms of the Indenture.
(c) PAYMENT UPON REDEMPTION. The Trustee will comply with the terms of
the Letter with regard to redemptions or repayments of the Book-Entry Notes. In
the case of Book-Entry Notes stated by their terms to be redeemable prior to
Stated Maturity, at least 60 calendar days before the date fixed for redemption
(the "Redemption Date"), the Issuer shall notify the Trustee of the Issuer's
election to redeem such Book-Entry Notes in whole or in part and the principal
amount of such Book-Entry Notes to be so redeemed. At least 30 calendar days
but not more than 60 calendar days prior to the Redemption Date, the Trustee
shall notify DTC of the Issuer's election to redeem such Book-Entry Notes. The
Trustee shall notify the Issuer and DTC of the CUSIP numbers of the particular
Book-Entry Notes to be redeemed either in whole or in part. The Issuer, the
Trustee and DTC will confirm the amounts of such principal and any premium and
interest payable with respect to each such Book-Entry Note on or about the third
Business Day preceding the Redemption Date of such Book-Entry Note. The Issuer
will pay the Trustee, in accordance with the terms of the Indenture, the amount
necessary to redeem each such Book-Entry Note or the applicable portion of each
such Book-Entry Note. The Trustee will pay such amount to DTC at the times and
in the manner set forth herein. Promptly after payment to DTC of the amount due
on the Redemption Date for such Book-Entry Note, the Trustee shall cancel any
such Book-Entry Note redeemed in whole in accordance with the Indenture. If a
Global Note is to be redeemed in part, the Trustee will cancel such Global Note
and issue a Global
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Note which shall represent the remaining portion of such Global Note and shall
bear the CUSIP number of the canceled Global Note.
(d) MANNER OF PAYMENT. The total amount of any principal and interest due
on Global Notes on any Interest Payment Date or at Maturity shall be paid by the
Issuer to the Trustee in immediately available funds on such date. The Issuer
will make such payment on such Global Notes by wire transfer to the Trustee.
The Issuer will confirm instructions regarding payment in writing to the
Trustee. Upon receipt of funds from the Issuer, on each date of Maturity of a
Book-Entry Note or as soon as possible thereafter, the Trustee will pay by
separate wire transfer (using Fedwire message entry instructions in a form
previously specified by DTC) to an account at the Federal Reserve Bank of New
York previously specified by DTC in funds available for immediate use by DTC,
each payment of principal (together with interest thereon) due at Maturity on
Book-Entry Notes. On each interest Payment Date, the interest payment shall be
made to DTC in same day funds in accordance with existing arrangements between
the Trustee and DTC. Thereafter, on each such date, DTC will pay, in accordance
with its SDFS operating procedures then in effect, such amounts in funds
available for immediate use to the respective Participants in whose names the
Book-Entry Notes represented by such Global Notes are recorded in the book-entry
system maintained by DTC. NEITHER THE ISSUER NOR THE TRUSTEE SHALL HAVE ANY
DIRECT RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH PARTICIPANTS
OF THE PRINCIPAL OF AND ANY PREMIUM AND INTEREST ON THE BOOK-ENTRY NOTES.
(e) WITHHOLDING TAXES. The amount of any taxes required under applicable
law to be withheld from any interest payment on a Book-Entry Note will be
determined and withheld by the Participant, indirect participant in DTC or other
person responsible for forwarding payments and material directly to the
beneficial owner of such Note.
DETAILS FOR SETTLEMENT
For each offer for Book-Entry Notes accepted by the Issuer, the Presenting
Agent shall communicate to the Issuer's Finance Division prior to 11:00 a.m.,
New York City time, on the first Business Day after the sale date (or on the
sale date if such sale is to be settled within one Business Day), by telephone,
telex, facsimile transmission or other acceptable means, the following
information (the "Purchase Information"):
1. Exact name in which the Notes are to be registered ("registered
owner").
2. Exact address of registered owner and, if different, the address for
delivery, notices and payment of principal and any premium and
interest.
3. Taxpayer identification number of registered owner.
4. Principal amount of the Notes.
C-13
<PAGE>
5. Stated Maturity of the Notes.
6. In the case of Fixed Rate Notes, the interest rate of the Notes; in
the case of Floating Rate Notes, the interest rate formula, the Spread
or Spread Multiplier (if any), the maximum or minimum interest rate
limitation (if any), the Calculation Agent, the Calculation Dates, the
Initial Interest Rate, the Interest Payment Dates, the Regular Record
Dates, the Index Maturity, the Interest Determination Dates and the
Interest Reset Dates, in each case, to the extent applicable with
respect to the Notes.
7. Redemption and/or repayment provisions, if any, of the Notes,
including
a. Initial Redemption Date;
b. Initial Redemption Price (% of par);
c. Amount (% of par) of decline and date;
d. Redemption Limitation Date.
8. Trade date of the Notes.
9. Settlement date (Issue Date) of the Notes.
10. Presenting Agent's commission (to be paid in the form of a discount
from the proceeds remitted to the issuer upon settlement).
11. Price.
12. Any additional applicable terms of the Notes.
The Issue Date of, and the settlement date for, Book-Entry Notes will be
the same. Before accepting any offer to purchase Book-Entry Notes to be settled
in less than three Business Days, the Issuer shall verify that the Trustee will
have adequate time to prepare and authenticate the Global Notes.
If the initial interest rate for a Floating Rate Book-Entry Note has not
been determined at the time that the foregoing procedure is completed, the
procedures described in the following two paragraphs shall be completed as soon
as such rate has been determined but no later than 12:00 Noon and 2:00 p.m., as
the case may be, on the Business Day before the settlement date.
Immediately after receiving the details for each offer for Book-Entry Notes
from the Presenting Agent and in any event no later than 12:00 Noon on the first
Business Day after the sale date (or on the sale date if such sale is to be
settled within one Business Day), the Issuer
C-14
<PAGE>
will, after recording the details and any necessary calculations, communicate
the Purchase Information by telephone, telex, facsimile transmission or other
acceptable means, to the Trustee. Each such instruction given by the Issuer to
the Trustee shall constitute a continuing representation and warranty by the
Issuer to the Trustee and the Agents that (i) the issuance and delivery of such
Notes have been duly and validly authorized by the Issuer and (ii) such Notes,
when completed, authenticated and delivered, shall constitute the valid and
legally binding obligations of the Issuer.
Immediately after receiving the Purchase Information from the Issuer and in
any event no later than 2:00 p.m. on the First Business Day after the sale date
(or on the sale date if such sale is to be settled within one Business Day), the
Trustee will assign a CUSIP number to the Global Note representing such Book-
Entry Note and will telephone the Issuer and advise the Issuer of such CUSIP
number and, as soon thereafter as practicable, the Issuer shall notify the Agent
of such CUSIP number. The Trustee will enter a pending deposit message through
DTC's Participant Terminal System, providing the following settlement
information to DTC (which shall route such information to Standard & Poor's
Corporation) and the relevant Agent:
1. The applicable Purchase Information.
2. Initial Interest Payment Date for each Book-Entry Note, number of days
by which such date succeeds the Regular Record Date which shall be the
Regular Record Date (as defined in the Note), and, if known, the
amount of interest payable on such Interest Payment Date per $1,000
principal amount of Book-Entry Notes.
3. Identification as either a Fixed Rate Note or a Floating Rate Note.
4. CUSIP number of the Global Note representing such Note.
5. Whether such Global Note will represent any other Book-Entry Note (to
the extent known at such time).
6. Interest payment periods.
7. Numbers of the participant accounts maintained by DTC on behalf of the
Trustee and the Agents.
Standard & Poor's Corporation will use the information received in the
pending deposit message to include the amount of any interest payable and
certain other information regarding the related Global Note in the appropriate
daily or weekly bond report published by Standard & Poor's Corporation.
C-15
<PAGE>
SETTLEMENT; GLOBAL NOTE DELIVERY AND CASH PAYMENT
The Issuer will deliver to the Trustee at the commencement of the program
and from time to time thereafter a supply of duly executed Global Notes with
preprinted control numbers adequate to implement the program. Upon the receipt
of appropriate documentation and instructions from the Issuer in accordance with
the applicable Officers' Certificate and verification thereof, the Trustee will
cause the Global Note to be completed and authenticated and hold the Global Note
for delivery against payment.
Prior to 10:00 a.m. on the Settlement Date, DTC will credit such Note to
the Trustee's participant account at DTC. At or prior to 2:00 p.m. on the
Settlement Date, the Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such Note to the Presenting Agent's
participant account and (ii) debit the Presenting Agent's settlement account and
credit the Trustee's settlement account for an amount equal to the price of such
Note less such Agent's commission (in accordance with SDFS operating procedures
in effect on the Settlement Date). The entry of such a deliver order shall
constitute a representation and warranty by the Trustee to DTC that (i) the
Global Note representing such Note has been executed, delivered and
authenticated and (ii) the Trustee is holding such Global Note pursuant to the
Medium Term Note Certificate Agreement between the Trustee and DTC.
Simultaneously with the giving of such instructions by the Trustee, the
Presenting Agent will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such Note to such Agent's
participant account and credit such Note to the Participant accounts of the
Participants with respect to such Note and (ii) to debit the settlement accounts
of such Participants and credit the settlement account of such Agent for an
amount equal to the price of such Note (in accordance with SDFS operating
procedures in effect on the settlement date).
Transfers of funds are subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified in the
SDFS operating procedures in effect on the settlement date.
The Trustee, upon confirming receipt of such funds, will wire transfer the
amount transferred to the Trustee, in funds available for immediate use, for the
account of Sierra Pacific Power Company, to account no. 470017880 at Bank of
America, Reno, Nevada (ABA No. 122400724).
FAILS
If settlement of a Book-Entry Note is rescheduled or canceled, the Issuer
shall notify the Trustee, and upon receipt of such notice, the Trustee will
deliver to DTC, through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled settlement date.
C-16
<PAGE>
If the Trustee has not entered an SDFS deliver order with respect to a
Book-Entry Note, then upon written request (which may be evidenced by telecopy
transmission) of the Issuer, the Trustee shall deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable, but no later than 2:00 p.m.
on any Business Day, a withdrawal message instructing DTC to debit such Note to
the Trustee's participant account. DTC will process the withdrawal message,
provided that the Trustee's participant account contains a principal amount of
the Global Note representing such Note that is at least equal to the principal
amount to be debited. If withdrawal messages are processed with respect to all
the Book-Entry Notes represented by a Global Note, the Trustee will mark such
Global Note "canceled" in accordance with the Indenture, and make appropriate
entries in the Trustee's records. The CUSIP number assigned to such Global Note
shall, in accordance with CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. If withdrawal messages are processed with respect to
one or more, but not all, of the Book-Entry Notes represented by a Global Note,
the Trustee will exchange such Global Note for two Global Notes, one of which
shall represent such Book-Entry Note or Notes and shall be canceled immediately
after issuance and the other of which shall represent the remaining Book-Entry
Notes previously represented by the surrendered Global Note and shall bear the
CUSIP number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC, acting on behalf of such
purchaser), such participants and, in turn, the Presenting Agent may enter an
SDFS deliver order through DTC's Participant Terminal System debiting such Note
to such Agent's participant account and crediting such Note free to the
participant account of the Trustee and shall notify the Trustee and the issuer
thereof. Thereafter, the Trustee (i) will immediately notify the Issuer, once
the Trustee has confirmed that such Note has been credited to its participant
account, and the Issuer shall immediately transfer by Fedwire (in immediately
available funds) to the Presenting Agent an amount equal to the price of such
Note which was previously sent by wire transfer to the account of the Issuer and
(ii) the Trustee will deliver the withdrawal message and take the related
actions described in the preceding paragraph. Such debits and credits will be
made on the Settlement Date, if possible, and in any event no later than 5:00
p.m. on the following Business Day. If the fail shall have occurred for any
reason other than failure of the Presenting Agent to provide the Purchase
Information to the Issuer or to provide a confirmation to the purchaser, the
Issuer will reimburse the Presenting Agent on an equitable basis for its loss of
the use of funds during the period when the funds were credited to the account
of the Issuer.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Note, DTC may take any actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes to have been represented by a
Global Note, the Trustee will provide for the authentication and issuance of a
Global Note representing the other Book-Entry Notes to have been represented by
such Global Note and will make appropriate entries in its records.
C-17
<PAGE>
EXHIBIT D
[LETTERHEAD OF CHOATE, HALL & STEWART]
January __, 1997
Lehman Brothers Inc.
3 World Financial Center
New York, NY 10285
A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, MO 63103
UBS Securities LLC
299 Park Avenue
New York, NY 10171
Bankers Trust Company
4 Albany Street
4th Floor
New York, NY 10006
Re: Sierra Pacific Power Company (the "Company")
$35,000,000 of Collateralized Medium-Term Notes, Series D
---------------------------------------------------------
Gentlemen:
This opinion is delivered to you pursuant to Section 5(e) of the
Distribution Agreement dated as of January __, 1997 (the "Distribution
Agreement") between each of you and the Company relating to the issuance and
sale from time to time of Collateralized Medium-Term Notes, Series D, in an
initial aggregate principal amount of $35,000,000 (the "Notes"). The Notes are
to be issued pursuant to a Collateral Trust Indenture dated as of June 1, 1992
(the "Indenture") between the Company and Bankers Trust Company, as Trustee (the
"Indenture Trustee"), as supplemented by a Fourth Supplemental Indenture dated
as of January __, 1997 between the Company and the Indenture Trustee (the
"Fourth Supplemental Indenture") and to be secured by the Company's first
mortgage bonds to be issued pursuant to an Indenture of
D-1
<PAGE>
January __, 1997
Page 2
Mortgage dated as of December 1, 1940, from the Company's predecessor to The New
England Trust Company and Leo W. Huegle (State Street Bank and Trust Company and
Gerald R. Wheeler, respectively, by succession), as Trustees, as heretofore
supplemented and modified and assumed by the Company (collectively, the
"Mortgage Indenture"). This opinion is being delivered on the Commencement Date
referred to in the Distribution Agreement (the "Commencement Date").
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Distribution Agreement.
In connection with rendering this opinion, we have examined such corporate
records, certificates and other documents as we have considered necessary for
the purposes of this opinion, including:
(a) A certificate of recent date of the Secretary of State of Nevada as to
the corporate existence and good standing of the Company as a Nevada
corporation and listing the charter documents of the Company on file in his
office; and a certificate of recent date of the Secretary of State of
California as to the qualification and good standing of the Company as a
foreign corporation in that State;
(b) The Restated Articles of Incorporation of the Company, and all
amendments thereto listed in said certificate of the Secretary of State of
Nevada;
(c) The By-Laws of the Company as now in effect;
(d) Resolutions adopted by the Board of Directors of the Company on
November 13, 1996, relating to the issuance and sale of the Notes and
matters related thereto;
(e) The Indenture, the Fourth Supplemental Indenture and the proposed form
of fixed-rate note to be issued under the Fourth Supplemental Indenture;
(f) The Mortgage Indenture, including the Thirty-fifth Supplemental
Indenture thereto dated as of January 1, 1997 (the "Thirty-fifth
Supplemental Indenture");
(g) The applications of the Company to the PSCN and the CPUC with respect
to the issuance and sale of the Notes and related matters, and the order of
the PSCN thereon dated October 19, 1995 and the opinion of the CPUC thereon
dated August 11, 1995;
(h) The Registration Statement, filed November 27, 1996, and all exhibits
thereto,
D-2
<PAGE>
January __, 1997
Page 3
as filed with the Commission;
(i) The documents incorporated by reference in the Prospectus (the
"Incorporated Documents");
(j) The First Mortgage Bond of the NN Series issued under the Mortgage
Indenture in connection with the Notes (the "Bond");
(k) Such other documents as are to be delivered on the Commencement Date,
including certificates of officers of the Company.
In such examination, we have assumed the genuineness of all signatures
other than the signatures of the Company, the authenticity of all documents
submitted to us as originals, the conformity to the original documents of all
documents submitted to us as copies and the authenticity of the originals of
such latter documents. As to any facts material to our opinion, we have, when
relevant facts were not independently established, relied upon the aforesaid
records, certificates and documents.
Although we have examined the Restated Articles of Incorporation, as
amended, of the Company, we have ourselves made no independent examination as to
the organization, existence or standing of the Company, its authority to do
business in California, its titles to properties, the lien of the Mortgage
Indenture, the recording of the Mortgage Indenture and the Thirty-fifth
Supplemental Indenture and matters of Nevada and California law affecting the
enforceability of the obligations of the Company in respect of the Notes, the
Indenture, the Fourth Supplemental Indenture, the Mortgage Indenture, the
Thirty-fifth Supplemental Indenture and the Mortgage Bonds, or the jurisdiction
and approvals of State regulatory commissions or requirements of the laws of
Nevada or California with respect to action by or documents required to be filed
with State officials. We have, therefore, in connection with the opinions set
forth below, relied with your consent as to all matters governed by the laws of
the State of Nevada, upon a letter of even date herewith addressed to you by
Woodburn and Wedge, and as to all matters governed by the laws of the State of
California, upon the letter of even date herewith addressed to you by Graham &
James LLP, and, as to such matters, our opinions are subject to all of the
qualifications and assumptions set forth in such letters. We refer you to said
letters for the matters covered thereby and believe that you and we are entitled
to rely thereon.
We are not passing in any way upon any computations or financial
statements, including the notes or schedules thereto, or upon any other
financial or accounting information set forth or referred to in the Registration
Statement or the Incorporated Documents, and have not reviewed the financial
records or books of account of the Company.
D-3
<PAGE>
January __, 1997
Page 4
Prior to November 27, 1996, we participated in conferences with officers
and other representatives of the Company and its accountants in which the
affairs of the Company and the contents of the Registration Statement and
Incorporated Documents were discussed at length. Subsequent to November 27,
1996, we made inquiries of certain officers of the Company and representatives
of its auditors as to whether there had been any material change in the affairs
of the Company since that date and we examined, among other documents, those to
be delivered at the closing of the sale of the Notes (other than the Notes).
However, there is no assurance that all possible material facts as to the
Company were disclosed at such conferences, in response to our inquiries, or in
such documents, and we have to a large extent relied upon the statements of
officers and other representatives of the Company as to the materiality of those
facts disclosed to us. Except with respect to the descriptions specifically
referred to in paragraphs (d) and (j), we are not passing upon and do not assume
any responsibility for the accuracy or completeness of the statements contained
in the Registration Statement or the Incorporated Documents.
Based on the foregoing and, to the extent indicated above on said opinions
of other counsel for the Company, we are of the opinion that:
(a) The Company is a corporation duly organized and existing in good
standing under the laws of the State of Nevada, with corporate power and
authority to own its properties and conduct its business as described in
the Registration Statement; and the Company is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties;
(b) The Indenture and the Fourth Supplemental Indenture have been duly
authorized, executed and delivered by the Company and are duly qualified
under the Trust Indenture Act and constitute the legal, valid and binding
obligations of the Company enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(c) The creation, issuance and sale of the Notes have been duly authorized
by the Company in conformity with the Indenture, and, when the terms of a
particular Debt Security and of its issuance and sale have been duly
authorized and established by all necessary corporate action in conformity
with the Indenture, and such Debt Security has been duly completed,
executed, authenticated and issued in accordance with the Indenture and
delivered against payment as contemplated by the Distribution Agreement,
such Debt Security will be entitled to the benefits of the Indenture and
will constitute a valid and legally binding obligation of the Company
enforceable in accordance with its terms,
D-4
<PAGE>
January __, 1997
Page 5
subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer, and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles, it being
assumed that (i) at the time of the issuance, sale and delivery of each
Debt Security the authorization of such series will not have been modified
or rescinded and there will not have occurred any change in law affecting
the validity, legally binding character or enforceability of such Debt
Security, and (ii) for purposes of this subparagraph (c), neither the
issuance, sale and delivery of any Debt Security, nor any of the terms of
such Debt Security, nor compliance by the Company with such terms, will
violate any applicable law, any agreement or instrument then binding upon
the Company or any restriction imposed by any court or governmental body
having jurisdiction over the Company, in each case effected after the date
hereof;
(d) The Registration Statement has become effective under the Act, the
Prospectus has been or will be transmitted by a means reasonably calculated
to result in filing with the Commission in conformity with the provisions
of Rule 424(b)(5) under the Act and no stop order suspending the
effectiveness of the registration statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or, to the
best of our knowledge are pending or contemplated under the Act; and the
registration statement relating to the Registered Securities, as of its
effective date, and the Registration Statement and the Prospectus, as of
the Commencement Date, complied and complies as to form in all material
respects with the requirements of the Act, the Exchange Act, the Trust
Indenture Act and the rules and regulations under such Acts; we have no
reason to believe that such Registration Statement, as of its effective
date, or the Registration Statement, as of the Commencement Date, contained
or contains any untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, as of the
Commencement Date, contains or contained any untrue statement of a material
fact or omits or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; the descriptions and statements in the
Prospectus and reviewed by us and made on our authority as stated under the
caption "Experts" are accurate and fairly present the information required
to be shown; and we do not know of any legal or governmental proceedings
required to be described in the Registration Statement which are not
described as required or of any contracts or documents of a character
required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement which are not
described and filed as required; provided, however, that we do not express
any belief as to any information contained in the Registration Statement,
the Prospectus or the Incorporated Documents which is specified therein to
have been obtained from The Depository Trust Company, or as to any
D-5
<PAGE>
January __, 1997
Page 6
statements contained in the Statements of Eligibility (Form T-l) under the
Trust Indenture Act of the Trustee filed as an exhibit to the Registration
Statement;
(e) The Mortgage Indenture has been duly authorized, executed and
delivered by the Company and has been qualified under the Trust Indenture
Act. The Thirty-fifth Supplemental Indenture has been duly authorized,
executed and delivered by the Company. Each of the Mortgage Indenture and
the Thirty-fifth Supplemental Indenture is a legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general applicability
relating to or affecting creditors' rights and general equity principles;
(f) Upon the deposit of the Mortgage Bonds with the Trustee as the basis
for the issuance of the Notes, to the extent that such Mortgage Bonds shall
have been designated as Designated Mortgage Bonds, the Mortgage Bonds shall
be duly pledged to the Trustee, and the Indenture will, upon payment for
the Notes issued upon the basis of the Designated Mortgage Bonds so
deposited, constitute a valid first lien thereupon; no registration,
recording or filing of the Indenture (or notices or financing statements in
respect thereof) is required by law to make effective and to maintain the
lien on the Designated Mortgage Bonds so deposited intended to be created
by the Indenture;
(g) The Mortgage Bonds to be deposited with the Trustee and the Designated
Mortgage Bonds to be pledged with the Trustee as the basis for the issuance
of the Notes, have been duly authorized and, upon the deposit and pledge
thereof in the manner contemplated by the Indenture, will be validly issued
in conformity with the Mortgage Indenture, and constitute legal, valid and
binding obligations of the Company, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights and general equity
principles and will be entitled to the security afforded by the Mortgage
Indenture equally and ratably with the securities outstanding thereunder;
(h) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the consummation
of the transactions contemplated by the Distribution Agreement in
connection with the issuance and sale of the Notes by the Company, except
with the Commission and except such as may be required under state
securities laws (we assume, with your permission, that with respect to each
particular Debt Security, inclusion of any alternative or additional terms
in such Debt Security that are not currently specified in the forms of
Notes examined by us would not require the Company to obtain any regulatory
consent, authorization or
D-6
<PAGE>
January __, 1997
Page 7
approval or make any regulatory filing in order for the Company to issue,
sell and deliver such Security), and except for filings with and the orders
from the PSCN and the CPUC authorizing the issuance and sale by the Company
of the Notes, subject to certain conditions set forth therein, which orders
have been obtained and are in full effect;
(i) The execution, delivery and performance of the Indenture, the Fourth
Supplemental Indenture, the Thirty-fifth Supplemental Indenture and the
Distribution Agreement, the issuance of the Mortgage Bonds, the pledge of
the Designated Mortgage Bonds and the issuance and sale of the Notes, and
compliance with the terms, conditions and provisions thereof, will not
result in a breach or violation of any of the terms, conditions and
provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company or any of
their properties or any agreement or instrument known to us to which the
Company or any such subsidiary is a party or by which the Company or any
such subsidiary is bound or to which any of the properties of the Company
or any such subsidiary is subject, or the charter or by-laws of the Company
or any such subsidiary. The Company has full power and authority to
authorize, issue and sell the Notes as contemplated by the Distribution
Agreement (it being understood that we have assumed with respect to each
particular Debt Security that the inclusion of any alternative or
additional terms in such Debt Security that are not currently specified in
the form of Notes examined by us will not cause the issuance, sale or
delivery of such Debt Security, the terms of such Debt Security, or the
compliance by the Company with such terms, to violate any of the court
orders or laws specified in this paragraph or to result in a default under
or breach of any of the agreements specified in this paragraph);
(j) The forms of the Notes and the Mortgage Bonds conform as to legal
matters in all material respects with the statements concerning them in the
Registration Statement and Prospectus;
(k) The Distribution Agreement has been duly authorized, executed and
delivered by the Company; and
(l) The Company is not a holding company or a subsidiary of a registered
holding company within the meaning of the Public Utility Holding Company
Act of 1935.
This opinion is rendered to you solely in connection with the
consummation of the transactions contemplated by the Distribution Agreement
and, without our express written consent, may not be relied upon by you for
any other purpose or by any other person for any
D-7
<PAGE>
January __, 1997
Page 8
purpose whatsoever. This opinion is given as of the date hereof and imposes
no obligation upon us to update this opinion. We specifically disclaim any
undertaking or obligation to advise the addressees hereof or any other party
expressly permitted hereby to rely upon this opinion of any facts or
circumstances that may hereafter be brought to out attention or any change in
any laws that may hereafter occur which may alter or affect the opinions
expressed herein.
Very truly yours,
CHOATE, HALL & STEWART
D-8
<PAGE>
EXHIBIT E
[LETTERHEAD OF WOODBURN AND WEDGE]
January __, 1997
Lehman Brothers Inc.
3 World Financial Center
New York, NY 10285
A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, MO 63103
UBS Securities LLC
299 Park Avenue
New York, NY 10171
Bankers Trust Company
4 Albany Street
4th Floor
New York, NY 10006
Re: Sierra Pacific Power Company
$35,000,000 of Collateralized Medium-Term Notes, Series D
---------------------------------------------------------
Ladies and Gentlemen:
As special Nevada counsel for Sierra Pacific Power Company (the "Company"),
we are furnishing this opinion to you pursuant to Section 5(f) of the
Distribution Agreement dated January __, 1997 (the "Distribution Agreement')
between the Company and each of Lehman Brothers, Inc., A.G. Edwards & Sons, Inc.
and UBS Securities LLC as Agents in connection with the issuance of
Collateralized Medium Term Notes, Series D, in an initial aggregate principal
amount of $35,000,000 (the "Notes"), to be issued from time to time by the
Company and secured by $35,000,000 of First Mortgage Bonds, 9%, Series NN due
2037 to be issued by the Company. All capitalized terms used herein without
definition and defined in the Distribution Agreement are used herein as therein
defined.
E-1
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 2
In connection with rendering this opinion, we have examined the following
documents:
(a) A Certificate of Corporate Existence issued by the Secretary of State
of Nevada;
(b) The Restated Articles of Incorporation of the Company and all
amendments thereto (the "Charter");
(c) The By-laws of the Company as now in effect;
(d) Resolutions adopted by the Board of Directors of the Company on
November 13, 1996, relating to the issuance and sale of the notes and matters
related thereto;
(e) The Indenture, including the Fourth Supplemental Indenture and the
proposed form of fixed-rate note to be issued under the Fourth Supplemental
Indenture;
(f) The Mortgage Indenture, including the Thirty-fifth Supplemental
Indenture thereto dated as of January 1, 1997 (the "Thirty-fifth Supplemental
Indenture");
(g) Fully executed counterparts or copies of the order of the Public
Service Commission of Nevada issued on October 19, 1995, Docket No. 95-6034 (the
"Order");
(h) The Mortgage Bonds;
(i) The Distribution Agreement;
(j) The Registration Statement of the Company on Form S-3 as filed with
the Securities and Exchange Commission (File No. 333-17041) under the Securities
Act of 1933, as amended, including the Prospectus relating to the Notes dated
January __, 1997 (the "Prospectus"); and
(k) Such other records, instruments and agreements as we have deemed
appropriate for the purposes of this opinion.
We have also examined evidence satisfactory to us relating to the
recordation and filing of the Indenture of Mortgage dated as of December 1,
1940, between the Company and The
E-2
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 3
New England Trust Company (State Street Bank and Trust Company, as successor
trustee) and Leo W. Huegle (Gerald R. Wheeler, as successor trustee), as
trustees (the "1940 Indenture of Mortgage") and the First through the Thirty-
fifth supplements thereto.
In our examination, we have assumed the genuineness and authenticity of all
signatures other than the signatures of the Company; the accuracy and
authenticity of all records, instruments and agreements submitted to us as
originals; the conformity to the original documents of all documents submitted
to us as copies; the authenticity of the originals of such copies; the accuracy,
completeness and authenticity of all certificates of public officials and others
as of the date hereof; and the due execution and delivery pursuant to due
authorization thereof by, and the validity and binding effect thereof on, each
party thereto other than the Company. As to any facts material to our opinion,
we have, when relevant facts were not independently established, relied upon
certificates of the Company or its officers or of public officials.
We have not examined the Notes or the Mortgage Bonds, except specimens
thereof, and we have assumed with respect to each particular Note and Mortgage
Bond that the inclusion of any alternative or additional terms in such Note or
Mortgage Bond that are not currently specified in the form of Note or Mortgage
Bond examined by us will not cause the issuance or sale of such Note, the
issuance and delivery of such Mortgage Bond, the terms of such Note or Mortgage
Bond, or the compliance by the Company with such terms, to breach or violate any
of the terms of the Order.
As used in this opinion, the expression "to the best of our knowledge" with
reference to matters of fact means that, after an examination of the documents
made available to us by the Company and after inquiries of officers, managers or
employees of the Company, we find no reason to believe that the opinions
expressed herein are factually inaccurate; but beyond that, we have not made an
independent factual investigation for the purpose of rendering this opinion.
We have made such examination of law as in our judgment is necessary or
appropriate for purposes of this opinion. We do not, however, purport to be
qualified to pass upon, and express no opinion as to, federal law or the laws of
any jurisdiction other than the laws of the State of Nevada (excluding therefrom
principles of conflicts of laws, securities or blue sky laws, and laws of
political subdivisions of such State).
E-3
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 4
Based upon and subject to the foregoing, we are of the opinion that:
(A) The Company is a corporation duly organized and existing and in
good standing under the laws of the State of Nevada, duly qualified to hold
property and to transact an electric, gas and water public utility business
in the State of Nevada, and with powers adequate for the execution and
delivery of Distribution Agreement, the Indenture, the Notes, the Fourth
Supplemental Indenture, the Mortgage Bonds and the Thirty-fifth
Supplemental Indenture;
(B) The Mortgage Indenture, and all supplements thereto (including
the Thirty-fifth Supplemental Indenture), has been duly authorized,
executed and delivered on behalf of the Company and (assuming that they
have been duly authorized, executed and delivered on behalf of the other
parties thereto) is enforceable in accordance with its terms under the laws
of Nevada except that the enforcement of the rights and remedies created
thereby is subject to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general application affecting the rights and remedies
of creditors and that the availability of the remedy of specific
performance or of injunctive relief is subject to the discretion of the
court before which any proceedings therefor may be brought and except that
the provisions of the Mortgage Indenture subjecting to the lien thereof
after-acquired property of the Company may not be effective in some cases
prior to the execution, delivery and recording of a supplemental indenture
specifically subjecting such after-acquired property to the lien of the
Mortgage Indenture.
Without limiting the generality of the foregoing qualifications, we
call your attention to certain laws of the State of Nevada of general
application affecting the rights and remedies of creditors, including
without limitation the prohibition against unilateral right of entry in the
event of default of the debtor, limitations on the form of action necessary
to enforce a debt secured by real property, anti-deficiency judgment laws,
the rights of debtors and junior lien holders to redemption following
judicial foreclosure, and the effect of court cases that have held that
certain provisions of agreements are unenforceable where enforcement would
violate the creditor's implied covenant of good faith and fair dealing or
where it cannot be demonstrated that enforcement is reasonably necessary
for the protection of the security. In addition, we call your attention to
the fact that any purchaser at foreclosure sale or any other party other
than the Company would probably have to qualify as a public utility under
the laws of the State of Nevada and/or
E-4
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 5
qualify as an assignee of the Company under its governmental franchises,
permits and licenses in order to own or operate the properties of the
Company as a public utility.
(C) The Mortgage Bonds to be deposited with the Trustee and the
Designated Mortgage Bonds pledged with the Trustee as the basis for the
issuance of the Notes, have been duly authorized and executed by the
Company and, upon the deposit and pledge thereof in the manner contemplated
by the Indenture, will constitute legal, valid and binding obligations of
the Company, subject, as to enforcement, to laws relating to or affecting
generally the enforcement of creditors' rights, including, without
limitation, bankruptcy, insolvency, reorganization, moratorium and similar
laws of general application affecting the rights and remedies of creditors
and to general principles of equity including the availability of the
remedy of specific performance or of injunctive relief and will be entitled
to the security afforded by the Mortgage Indenture equally and ratably with
the securities outstanding thereunder.
(D) The creation, issuance and sale of the Notes have been duly
authorized by the Company; and the Indenture and Fourth Supplemental
Indenture have been duly authorized, executed and delivered on behalf of
the Company.
(E) The Indenture, the Notes, the Fourth Supplemental Indenture, the
Mortgage Bonds and the Thirty-fifth Supplemental Indenture will not result
in a breach or violation of any of the terms, conditions and provisions of,
or constitute a default under, (i) the Charter or the By-laws of the
Company; (ii) any statute, rule or regulation of the State of Nevada; or
(iii) any order of any court or governmental agency of the State of Nevada
having jurisdiction over the Company or any of its properties, which order
is material to the Company taken as a whole.
(F) The Order remains in full force and effect in the form issued and
no other authorization, approval or other action by, and no notice to or
filing or registration with, any governmental authority or regulatory body
of the State of Nevada is required for the due execution, delivery and
performance by the Company of the Indenture, the Notes, the Fourth
Supplemental Indenture, the Mortgage Bonds or the Thirty-fifth Supplemental
Indenture, except in accordance with the terms of its authorizing orders.
E-5
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 6
(G) To the best of our knowledge and except as set forth in the
Prospectus, there is no pending or threatened action or proceeding before
any court, governmental agency or arbitrator against, directly involving or
affecting the Company or any of its subsidiaries which, in any case, may
materially and adversely affect the ability of the Company to perform its
obligations under the Indenture, the Notes, the Fourth Supplemental
Indenture, the Mortgage Bonds or the Thirty-fifth Supplemental Indenture.
(H) The Mortgage Indenture and all supplements thereto (including the
Thirty-fifth Supplemental Indenture) (or appropriate financing statements)
have been duly recorded or filed in all places in the State of Nevada where
such recording or filing is necessary to perfect the lien of the Mortgage
Indenture as a lien on and security interest in both real and personal
property of the Company subjected thereto.
(I) No taxes (as distinguished from filing and recordation fees) are
payable to the State of Nevada or any subdivision or agency thereof in
connection with the execution and delivery of the Notes, the Mortgage Bonds
or the Thirty-fifth Supplemental Indenture.
This letter is intended for your information only as to the parties to whom
it is addressed in connection with the transactions described herein and for
Choate, Hall & Stewart, counsel for the Company, and Ropes & Gray, counsel for
the Agents, and is not to be used, circulated, quoted or otherwise referred to
for any other purpose without our prior written permission.
Very truly yours,
WOODBURN AND WEDGE
By
-----------------------------
GORDON H. DePAOLI
E-6
<PAGE>
EXHIBIT F
[LETTERHEAD OF GRAHAM AND JAMES LLP]
January __, 1997
Lehman Brothers Inc.
3 World Financial Center
New York, NY 10285
A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, MO 63103
UBS Securities LLC
299 Park Avenue
New York, NY 10171
Bankers Trust Company
4 Albany Street
4th Floor
New York, NY 10006
Re: Collateralized Medium-Term Notes, Series D, in an Initial Aggregate
Principal Amount of $35,000,000
-------------------------------------------------------------------
Ladies and Gentlemen:
As special California counsel for Sierra Pacific Power Company (the
"Company"), we are furnishing this opinion to you pursuant to Section 5(g) of
the Distribution Agreement dated January __, 1997 (the "Distribution Agreement")
between the Company and each of Lehman Brothers, Inc., A.G. Edwards & Sons, Inc.
and UBS Securities LLC as agents (each, an "Agent" and, collectively, the
"Agents") in connection with the proposed issuance and sale from time to time of
Collateralized Medium-Term Notes, Series D, in an initial aggregate principal
amount of $35 million (the "Notes"). The Notes are to be issued pursuant to a
Collateral Trust Indenture dated as of June 1, 1992 between the Company and
Bankers Trust Company, as Trustee (the "Indenture Trustee"), as supplemented by
the First Supplemental Indenture dated
F-1
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 2
as of June 1, 1992, the Second Supplemental Indenture, dated as of October 1,
1993, the Third Supplemental Indenture, dated as of February 1, 1996, and the
Fourth Supplemental Indenture, dated as of January __, 1997 (as so supplemented,
the "Indenture"), and are to be secured by the Company's first mortgage bonds
(the "First Mortgage Bonds") to be issued pursuant to an Indenture of Mortgage
dated as of December 1, 1940 from the Company's predecessor to The New England
Trust Company and Leo W. Huegle (State Street Bank and Trust Company and Gerald
R. Wheeler, respectively, by succession), as Trustees, as heretofore
supplemented and modified and as to be further supplemented by a Thirty-fifth
Supplemental Indenture dated as of January 1, 1997 (the "Supplemental First
Mortgage Indenture" and such Indenture of Mortgage, as so supplemented and
modified, the "First Mortgage Indenture"). As counsel for the Company, we
advise you as follows:
We have examined the restated Articles of Organization of the Company and
all amendments thereto (the "Charter"), the Bylaws of the Company as now in
effect, resolutions of the Board of Directors of the Company, the final form of
each of the First Mortgage Bonds, the First Mortgage Indenture, the Supplemental
First Mortgage Indenture, the Indenture, the Distribution Agreement, the
Decision and Order issued by the California Public Utilities Commission (the
"CPUC") on August 11, 1995 (Decision ("D.") 95-08-045), an Officer's Certificate
duly executed by an officer of the Company, and such other records, instruments
and agreements as we have deemed appropriate for purposes of this opinion.
In our examination of the records, instruments and agreements referred to
above, we have assumed the genuineness and authenticity of all signatures; the
accuracy and authenticity of all records, instruments, and agreements submitted
to us as originals; the conformity to originals of all documents submitted to us
as copies; the authenticity of the originals of such copies; the accuracy,
completeness, and authenticity of certificates of public officials and others as
of the date hereof; and the due execution and delivery pursuant to due
authorization thereof by, and the validity and binding effect thereof on, each
party thereto other than the Company. As to certain issues of fact, we have
relied upon the above-mentioned Officer's Certificate.
We have made such examination of law as in our judgment is necessary or
appropriate for purposes of this opinion. We do not, however, for the purposes
of this opinion, purport to be qualified to pass upon, and express no opinion as
to, the laws of any jurisdiction other than the State of California and the
United States of America.
F-2
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 3
Based upon and subject to the foregoing, and subject to the qualifications
set forth herein, we are of the opinion that:
1. The Company is duly qualified and in good standing as a foreign
corporation under the laws of the State of California and is duly qualified to
hold property and to transact an electric public utility business in the State
of California.
2. The Decision and Order dated August 11, 1995 (D. 95-08-045) of the
CPUC remain in full force and effect in the form issued and no other
authorization, approval or other action by, and no notice to or filing or
registration with, any governmental authority or regulatory body of the State of
California is required for the due execution, delivery and performance by the
Company of the First Mortgage Bonds, the Indenture, the Supplemental First
Mortgage Indenture, or the Distribution Agreement.
3. The First Mortgage Bonds, the First Mortgage Indenture and the
Supplemental First Mortgage Indenture (the "First Mortgage Documents") are
enforceable in accordance with their terms and under the laws of California.
However, no opinion is given with respect to the effect of applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
rights of creditors generally; and no opinion is given with respect to the
effect of rules of law governing specific performance, injunctive relief and
other equitable remedies whether or not equitable remedies are sought, including
without limitation the effect of court cases that have held that certain
provisions of agreements are unenforceable where enforcement would violate the
creditor's implied covenant of good faith and fair dealing or where it cannot be
demonstrated that enforcement is reasonably necessary for the protection of the
security. However, in our opinion, such rules of law and court cases do not
render the First Mortgage Documents invalid as a whole and there exist, in the
First Mortgage Documents or pursuant to applicable law, legally adequate
remedies for a realization of the principal benefits and/or security intended to
be provided by the First Mortgage Documents.
We call your attention to certain laws of general application in California
affecting the rights and remedies of creditors, which include, without
limitation, the prohibition against unilateral right of entry in the event of
default of the debtor, limitations on the form of action necessary to enforce a
debt secured by real property, anti-deficiency judgment laws and the rights of
debtors and junior lien holders to redemption following judicial foreclosure.
We also call to your attention that the provisions of the First Mortgage
Indenture subjecting to the lien
F-3
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 4
thereof after-acquired property of the Company may not be effective in some
cases prior to the execution, delivery and recording of a supplemental indenture
specifically subjecting such after-acquired property to the lien of the First
Mortgage Indenture. In addition, we call your attention to the fact that a
purchaser at foreclosure sale or anyone other than the Company would probably
have to qualify under California law in order to own and operate the property of
the Company as a public entity.
4. The First Mortgage Bonds deposited with the Indenture Trustee and a
new series of bonds designated "First Mortgage Bonds 9% Series NN due 2037"
pledged with the Indenture Trustee as the basis for the issuance of the Notes
constitute legal, valid and binding obligations of the Company, subject, as to
enforcement, to laws relating to or affecting generally the enforcement of
creditors' rights, including, without limitation, bankruptcy and insolvency
laws, and to general principles of equity and will be entitled to the security
afforded by the First Mortgage Indenture equally and ratably with the securities
outstanding thereunder.
5. The First Mortgage Indenture (or appropriate financing statements)
have been duly recorded or filed in all places in the State of California where
such recording or filing is necessary to perfect the lien of the First Mortgage
Indenture as a lien on the security interest in both real and personal property
of the Company subjected thereto that is located in the State of California.
Notwithstanding the foregoing, (i) we express no opinion regarding the lien of
the First Mortgage Indenture as against franchises, permits and other personal
property which, under California law, may not be made subject to a personal
property lien, and (ii) we express no opinion as to the perfection of the
security interest in any Personal Property in which, under the provisions of the
California Uniform Commercial Code, a security interest cannot be perfected by
filing a financing statement.
6. No taxes (as distinguished from filing and recordation fees) are
payable to the State of California or any subdivision or agency thereof in
connection with the execution and delivery of the First Mortgage Bonds or the
Supplemental First Mortgage Indenture.
The opinions set forth above are given in our capacity as California
counsel to the Company only. We do not opine as to matters of New York or
Nevada law, nor as to matters of federal public utilities or environmental law,
nor as to matters of law of any other State.
F-4
<PAGE>
Lehman Brothers Inc.
A.G. Edwards & Sons, Inc.
UBS Securities LLC
Bankers Trust Company
January __, 1997
Page 5
This opinion is furnished by us as counsel for the Company in connection
with the proposed issuance and sale of the Notes and is solely for the
benefit of the addressees hereto, of their counsel and of Choate, Hall &
Stewart, counsel for the Company, and is not to be used, circulated, quoted
or otherwise referred to for any other purpose without our express written
permission.
Very truly yours,
GRAHAM & JAMES LLP
F-5
<PAGE>
EXHIBIT G
OFFICER'S CERTIFICATE
Each of the undersigned, Lynn M. Miller, Controller, and William E.
Peterson, Senior Vice President, Corporate Secretary and General Counsel, of
Sierra Pacific Power Company (the "Company"), does hereby certify, to the
best of his or her knowledge, that:
(1) the representations and warranties of the Company in the Distribution
Agreement are true and correct;
(2) the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under the
Distribution Agreement at or prior to the date hereof;
(3) no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are contemplated by the
Commission; and
(4) subsequent to the date of the most recent audited financial statements
incorporated by reference in the Prospectus, neither the Company nor
any of its subsidiaries has sustained any material adverse change, or
any development involving a prospective material adverse change, in or
affecting particularly the capital stock or long-term debt of the
Company or any of its subsidiaries or the business, financial
position, results of operations or properties of the Company or any of
its subsidiaries other than as set forth in or contemplated by the
Prospectus or as described herein.
Terms not otherwise defined herein having the meanings set forth in the
Distribution Agreement dated January __, 1997 between the Company and each of
Lehman Brothers Inc., A.G. Edwards & Sons, Inc. and UBS Securities LLC (the
"Distribution Agreement").
IN WITNESS WHEREOF, we have hereunto set our hands this ___ day of January,
1997.
______________________________
Lynn M. Miller, Controller
______________________________
William E. Peterson, Senior Vice
President, Corporate Secretary and
General Counsel
<PAGE>
EXHIBIT 4.5
___________________________________________________________________________
___________________________________________________________________________
SIERRA PACIFIC POWER COMPANY
TO
BANKERS TRUST COMPANY
Trustee
__________
FOURTH SUPPLEMENTAL INDENTURE
DATED AS OF JANUARY 1, 1997
__________
SUPPLEMENTING THE COLLATERAL TRUST INDENTURE
DATED AS OF JUNE 1, 1992
___________________________________________________________________________
___________________________________________________________________________
<PAGE>
FOURTH SUPPLEMENTAL INDENTURE, dated as of January 1, 1997, between SIERRA
PACIFIC 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 6100 Neil Road, P.O. Box 10100, Reno, Nevada 89520, and BANKERS TRUST
COMPANY, a New York banking corporation duly organized and existing under the
laws of the State of New York, as Trustee herein called the "Trustee", the
office of the Trustee at which at the date hereof its corporate trust business
is principally administered being Four Albany Street, New York, New York 10006.
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore executed and delivered to the Trustee a
Collateral Trust Indenture dated as of June 1, 1992 (the "Indenture") providing
for the issuance by the Company from time to time of its collateralized medium-
term notes to be issued in one or more series (in the Indenture and herein
called the "Securities"); and
WHEREAS, the Company, in the exercise of the power and authority conferred
upon and reserved to it under the provisions of the Indenture, including
Section 1001 thereof, and pursuant to appropriate resolutions of the Board of
Directors, has duly determined to make, execute and deliver to the Trustee this
Fourth Supplemental Indenture to the Indenture as permitted by Sections 201 and
301 of the Indenture in order to establish the form or terms of, and to provide
for the creation and issuance of, a fourth series of Securities under the
Indenture in an initial aggregate principal amount of $35,000,000; and
WHEREAS, all things necessary to make the Securities, when executed by the
Company and authenticated and delivered by the Trustee or any Authenticating
Agent and issued upon the terms and subject to the conditions hereinafter and in
the Indenture set forth against payment therefor the valid, binding and legal
obligations of the Company and to make this Fourth Supplemental Indenture a
valid, binding and legal agreement of the Company, have been done;
NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH that, in
order to establish the terms of a series of Securities, and for and in
consideration of the premises and of the covenants contained in the Indenture
and in this Fourth Supplemental Indenture and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, it
is mutually covenanted and agreed as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. DEFINITIONS. Each capitalized term that is used herein and
is defined in the Indenture shall have the meaning specified in the Indenture
unless such term is otherwise defined herein.
<PAGE>
Section 102. SECTION REFERENCES. Each reference to a particular section
set forth in this Fourth Supplemental Indenture shall, unless the context
otherwise requires, refer to this Fourth Supplemental Indenture.
ARTICLE TWO
TITLE AND TERMS OF NOTES
Section 201. TITLE OF THE NOTES. This Fourth Supplemental Indenture
hereby establishes a series of Securities designated as the "Collateralized
Medium-Term Notes, Series D" of the Company (collectively referred to herein as
the "Notes"). For purposes of the Indenture, the Notes shall constitute a
single series of Securities.
Section 202. VARIATIONS IN TERMS OF NOTES. The Notes will be offered in
one or more tranches. Subject to the terms and conditions set forth in the
Indenture and in this Fourth Supplemental Indenture, the terms of any particular
tranche of the Notes may vary from the terms of any other tranche of the Notes
as contemplated by Section 301 of the Indenture, and such terms for each tranche
of Notes will be set forth in the Note for such tranche as delivered to the
Trustee or an Authenticating Agent for authentication pursuant to Section 303 of
the Indenture.
Section 203. TERM OF THE NOTES. Each Note will mature from nine months to
40 years from the date of issue.
Section 204. AMOUNT AND DENOMINATIONS. The initial aggregate principal
amount in which the Notes may be issued under this Fourth Supplemental Indenture
is $35,000,000 (or, if any Notes are to be Original Issue Discount Securities or
are to be denominated with amounts payable in respect of principal of or any
premium or interest on the Notes to be determined by reference to the value,
rate or price of one or more specified indices ("Indexed Notes"), such principal
amount as shall result initially in an aggregate initial offering price
equivalent to $35,000,000).
The Notes shall be denominated in United States dollars and payments of
principal of and premium, if any, and interest on the Notes shall be made in
United States dollars.
The Notes shall be issuable only in fully registered form. The authorized
denominations of Notes shall be $10,000 and integral multiples of $1,000 in
excess thereof. Notes may be represented by one or more permanent Global Notes,
registered in the name of the Depositary, as provided in Section 206.
Section 205. INTEREST AND INTEREST RATES. The Notes may bear interest or
may be issued as Notes sold at a discount that do not bear interest, as shall be
specified in such Note. Unless otherwise indicated in the Note, each interest-
bearing Note shall bear interest from and including its date of authentication
or from and including the most recent Interest Payment Date with
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respect to which interest on such Note (or any predecessor Note) has been
paid or duly provided for at the fixed rate per annum, or at the rate per
annum determined pursuant to an interest rate formula, stated therein until
the principal thereof is paid or made available for payment. Interest shall
be payable on each Interest Payment Date and at Maturity upon deposit of
sufficient funds therefor by the Company by no later than 10:00 a.m., New
York City time, on each such payment date. Interest shall be payable
generally to the Person in whose name a Note (or any predecessor Note) is
registered at the close of business on the Regular Record Date next preceding
each Interest Payment Date; PROVIDED, HOWEVER, that interest payable at
Maturity shall be payable to the person to whom principal shall be payable.
The first payment of interest on any Note originally issued between a Regular
Record Date and an Interest Payment Date shall be made on the second Interest
Payment Date following the Issue Date of such Note to the registered owner on
the Regular Record Date immediately preceding such Interest Payment Date.
In no event shall any Note at any time bear interest in excess of [9%] per
annum.
Section 206. BOOK-ENTRY NOTES. Upon issuance, all Book-Entry Notes of
like tenor and having the same Issue Date shall be represented by a single
permanent Global Note. Each Global Note representing Book-Entry Notes shall be
deposited with, or on behalf of, The Depository Trust Company, as Depositary
(the "Depositary"), located in the Borough of Manhattan, The City of New York,
and shall be registered in the name of the Depositary or a nominee of the
Depositary.
Section 207. REDEMPTION IN CERTAIN CIRCUMSTANCES. Upon any redemption of
the Designated Mortgage Bonds relating to any of the Notes that is required
pursuant to the provision of clause 2 of Section 6.05 of the Mortgage Indenture,
the Company will, upon compliance with Section 1202 of the Indenture, redeem
such Notes in an aggregate amount equal to the amount becoming due and payable
on such Designated Mortgage Bonds, plus accrued interest.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
The Trustee makes no undertaking or representations in respect of, and
shall not be responsible in any manner whatsoever for and in respect of, the
validity or sufficiency of this Fourth Supplemental Indenture or the proper
authorization or the due execution hereof by the Company or for or in respect of
the recitals and statements contained herein, all of which recitals and
statements are made solely by the Company.
Except as expressly amended hereby, the Indenture shall continue in full
force and effect in accordance with the provisions thereof and the Indenture is
in all respects hereby ratified and confirmed. This Fourth Supplemental
Indenture and all of its provisions shall be deemed a part of the Indenture in
the manner and to the extent herein and therein provided.
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This Fourth Supplemental Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York.
This Fourth Supplemental Indenture 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 but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the date and year first above written.
SIERRA PACIFIC POWER COMPANY
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
[SEAL]
Attest:
___________________________
William E. Peterson, Secretary
BANKERS TRUST COMPANY, as Trustee
By:________________________________
Name:
Title:
[SEAL]
Attest:
___________________________
[Title]
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Sierra Pacific Power Company
6100 Neil Road
P.O. Box 10100
Reno, Nevada 89520-0400
____________________________________________________________________________
SIERRA PACIFIC POWER COMPANY
TO
STATE STREET BANK AND TRUST COMPANY
AND
GERALD R. WHEELER,
AS TRUSTEES
___________________
THIRTY-FIFTH SUPPLEMENTAL INDENTURE
DATED AS OF JANUARY 1, 1997
SUPPLEMENTING THE INDENTURE OF MORTGAGE
DATED AS OF DECEMBER 1, 1940
__________
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A PUBLIC UTILITY
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS
THIS INSTRUMENT IS BEING FILED PURSUANT TO NEVADA REVISED STATUTES CHAPTER 105
_____________________________________________________________________________
<PAGE>
THIS THIRTY-FIFTH SUPPLEMENTAL INDENTURE dated as of the first day of
January, 1997 by and between SIERRA PACIFIC POWER COMPANY, as Debtor (its IRS
employer identification number being 88-0044418), a corporation duly organized
and existing under the laws of the State of Nevada (hereinafter sometimes called
the "Company"), whose mailing address is P.O. Box 10100, Reno, Nevada 89520 and
address of its chief place of business is 6100 Neil Road, Reno, Nevada, party of
the first part, and STATE STREET BANK AND TRUST COMPANY, a trust company duly
organized and existing under the laws of The Commonwealth of Massachusetts, and
having its chief place of business at 225 Franklin Street, Boston,
Massachusetts, as Trustee and Secured Party (its IRS employer identification
number being 04-1867445) and GERALD R. WHEELER, as Co-Trustee and Secured Party
(whose Social Security number is ###-##-#### and whose residence address is 37
Cleveland Road, Waltham, Massachusetts), the mailing address of each of whom is
P.O. Box 778, Boston, Massachusetts 02102 (both of whom are hereinafter
sometimes called the "Trustees", the former being hereinafter sometimes called
the "Trustee" and the latter the "Individual Trustee" or "Co-Trustee"), parties
of the second part.
WHEREAS, Sierra Pacific Power Company (formerly known as The Truckee River
General Electric Company and also as Truckee River Power Company), a corporation
duly organized and existing under the laws of the State of Maine (hereinafter
called the "Predecessor Company"), heretofore executed and delivered to The New
England Trust Company and Leo W. Huegle, as Trustees, an Indenture of Mortgage,
dated as of December 1, 1940 (hereinafter called the "Original Indenture") to
secure, as provided therein, its bonds (in the Original Indenture and herein
called the "Bonds") to be designated generally as its First Mortgage Bonds and
to be issued in one or more series as provided in the Original Indenture; and
WHEREAS, by virtue of Section 15.24 of the Original Indenture, State Street
Bank and Trust Company is now qualified and acting as successor Trustee
thereunder as the result of the conversion of The New England Trust Company into
a national banking association under the name New England National Bank of
Boston on October 17, 1960, the consolidation of said national banking
association with The Merchants National Bank of Boston under the name New
England Merchants National Bank of Boston as of December 31, 1960, the merger of
said New England Merchants National Bank of Boston into New England Merchants
Bank (National Association) under the name New England Merchants National Bank
as of June 18, 1970, the change of the name of said New England Merchants
National Bank to Bank of New England, National Association as of May 1, 1982 and
the transfer of substantially all of the corporate trust business of Bank of New
England, National Association to State Street Bank and Trust Company as of
September 17, 1990; and
WHEREAS, on April 11, 1947, Leo W. Huegle, Co-Trustee under the Original
Indenture, resigned, and the Predecessor Company and the Trustee, in accordance
with the provisions of Section 15.20 of the Original Indenture, accepted such
resignation and appointed Fletcher C. Chamberlin as successor Co-Trustee
thereunder; and
WHEREAS, on November 18, 1974, Fletcher C. Chamberlin resigned as Co-
Trustee and the Company and the Trustee, in accordance with the provisions of
Section 15.20 of the Original
<PAGE>
Indenture, accepted such resignation and appointed James S. Fisher as successor
Co-Trustee thereunder; and
WHEREAS, on September 27, 1985, James S. Fisher resigned as Co-Trustee and
the Company and the Trustee, in accordance with the provisions of Section 15.20
of the Original Indenture, accepted such resignation and appointed Gerald R.
Wheeler as successor Co-Trustee thereunder, and Gerald R. Wheeler is now the
qualified and acting Co-Trustee thereunder; and
WHEREAS, the Predecessor Company heretofore executed and delivered to the
Trustees nine Supplemental Indentures dated, respectively, as of August 1, 1947,
April 1, 1948, October 1, 1952, November 1, 1954, November 1, 1956, April 1,
1958, May 1, 1961, June 1, 1962 and June 1, 1964 supplementing and/or modifying
the Original Indenture, pursuant to each of which the Predecessor Company
provided for the creation of a new series of First Mortgage Bonds; and
WHEREAS, the Predecessor Company was merged into the Company, on March 31,
1965, whereupon the Company acquired all the property, real, personal or mixed,
including all rights, privileges, easements, licenses and franchises, described
in the Original Indenture as theretofore supplemented and modified and thereby
conveyed or mortgaged or intended so to be, including all such property acquired
by the Predecessor Company since the execution and delivery of the Original
Indenture, which by the terms of the Original Indenture as theretofore
supplemented and modified was subjected or intended to be subjected to the lien
thereof, and the Company thereupon executed and delivered to the Trustees a
Tenth Supplemental Indenture dated as of March 31, 1965, whereby the Company
succeeded to the Predecessor Company with the same effect as if the Company had
been named in the Original Indenture as the mortgagor company and in the Bonds
and coupons as the obligor thereon or maker thereof; and
WHEREAS, the Company heretofore executed and delivered to the Trustees an
Eleventh Supplemental Indenture dated as of October 1, 1965, a Twelfth
Supplemental Indenture dated as of July 1, 1967, a Thirteenth Supplemental
Indenture dated as of May 1, 1970, a Fourteenth Supplemental Indenture dated as
of November 1, 1972, a Fifteenth Supplemental Indenture dated as of May 1, 1974,
a Sixteenth Supplemental Indenture dated as of October 1, 1975, a Seventeenth
Supplemental Indenture dated as of July 1, 1976, an Eighteenth Supplemental
Indenture dated as of August 1, 1977, a Twenty-first Supplemental Indenture
dated as of August 1, 1979, a Twenty-second Supplemental Indenture dated as of
October 1, 1980, a Twenty-third Supplemental Indenture dated as of May 1, 1981,
a Twenty-fourth Supplemental Indenture dated as of September 1, 1982, a Twenty-
fifth Supplemental Indenture dated as of July 1, 1986, a Twenty-sixth
Supplemental Indenture dated as of August 1, 1988, a Twenty-seventh Supplemental
Indenture dated as of August 1, 1989, a Twenty-eighth Supplemental Indenture
dated as of May 1, 1992, a Twenty-ninth Supplemental Indenture dated as of
June 1, 1992, a Thirtieth Supplemental Indenture dated as July 1, 1992, a
Thirty-first Supplemental Indenture dated as of November 1, 1992, a Thirty-
second Supplemental Indenture dated as of June 1, 1993, a Thirty-third
Supplemental Indenture dated as of October 1, 1993 and a Thirty-fourth
Supplemental Indenture dated as of February 1, 1996, each supplementing and/or
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<PAGE>
modifying the Original Indenture, pursuant to each of which the Company
provided for the creation of a new series of First Mortgage Bonds, and executed
and delivered to the Trustees a Nineteenth Supplemental Indenture dated as of
April 1, 1978 and a Twentieth Supplemental Indenture dated as of October 1,
1978, each modifying the Original Indenture, and
WHEREAS, pursuant to the Original Indenture, as so supplemented and
modified, there have been executed, authenticated and delivered and there are
now outstanding First Mortgage Bonds of series and in principal amounts as
follows:
Issued and
Title Outstanding
- ----- -----------
6 1/2% Bonds of 1997 Series $15,000,000.00
2% Bonds of 2011 Series [1,880,747.00]
5% Bonds of Series Y due 2024 [3,408,110.00]
2% Bonds of Series Z due 2004 [160,247.00]
6.55% Bonds of Series AA due 2013 39,500,000.00
6.65% Bonds of Series BB due 2017 17,500,000.00
12% Bonds of Series CC due 2022 115,000,000.00
6.30% Bonds of Series DD due 2014 45,000,000.00
6.30% Bonds of Series EE due 2022 10,250,000.00
6.35% Bonds of Series FF due 2012 1,000,000.00
6.55% Bonds of Series GG due 2020 20,000,000.00
6.65% Bonds of Series HH due 2017 75,000,000.00
6.70% Bonds of Series II due 2032 21,200,000.00
5.90% Bonds of Series JJ due 2023 9,800,000.00
5.90% Bonds of Series KK due 2023 30,000,000.00
10% Bonds of Series LL due 2033 80,000,000.00
9% Bonds of Series MM due 2035 80,000,000.00
WHEREAS, the Board of Directors of the Company has established under said
Original Indenture, as supplemented and modified, a new series of Bonds to be
designated First Mortgage Bonds, 9% Series NN due 2037, to be dated as of
January 1, 1997 and to be due January 1, 2037 (hereinafter sometimes referred to
as "Bonds of the NN Series") and has authorized the initial issuance of Bonds
of the NN Series in the principal amount of Thirty-five Million Dollars
($35,000,000) pursuant to the provisions of Article 3 of the Original indenture
to obtain funds for its corporate purposes; and
WHEREAS, pursuant to a Collateral Trust Indenture (as supplemented, the
"Collateral Trust Indenture") dated as of June 1, 1992 between the Company and
Bankers Trust Company (the "Indenture Trustee")
(a) Thirty-five Million Dollars ($35,000,000) aggregate principal amount
of Bonds of the NN Series are to be registered in the name of the Indenture
Trustee;
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<PAGE>
(b) From time to time, the Company will designate all or a portion of said
Bonds of the NN Series to be held in pledge as Designated Mortgage Bonds under
the terms of, to the extent and in the manner provided in, the Collateral Trust
Indenture to serve as security for the payment of the principal of and premium,
if any, and interest on up to Thirty-five Million Dollars ($35,000,000)
aggregate principal amount of collateral trust notes (the "Securities") to be
issued from time to time under the Collateral Trust Indenture; and
(c) Any payments received by the Indenture Trustee on account of principal
of or interest on the Bonds of the NN Series are to be applied by the Indenture
Trustee to the payment of corresponding amounts of principal of, or interest or
premium on, the Securities; and any payments received by the Indenture Trustee
on account of principal of, or interest or premium on, the Securities through
funds other than payments received by it on account of principal of or interest
on the Bonds of the NN Series shall constitute full payment of corresponding
amounts of principal of or interest on the Bonds of the NN Series; and any
receipt by the Indenture Trustee of any Securities for cancellation shall
constitute full payment of the principal of and interest on a corresponding
amount of the bonds of the NN Series; and
WHEREAS, Section 16.01 of the Original Indenture provides, among other
things, that the Company may execute and file with the Trustees, and the
Trustees at the request of the Company shall join in, indentures supplemental to
the Original Indenture and which thereafter shall form a part thereof, for the
purposes, among others, of (a) describing the terms of any new series of Bonds
as established by resolution of the Board of Directors of the Company pursuant
to Section 2.03 of the Original Indenture, (b) subjecting to the lien of the
Original Indenture, or perfecting the lien thereof upon, any additional
properties of any character, and (c) for any other purpose not inconsistent with
the terms of the Original Indenture and which shall not impair the security of
the same; and
WHEREAS, the Company desires to execute this Thirty-fifth Supplemental
Indenture and hereby requests the Trustees to join in this Thirty-fifth
Supplemental Indenture for the purpose of (a) describing the terms of the Bonds
of the NN Series and (b) subjecting to the lien of the Original Indenture, or
perfecting the lien thereof upon, additional properties acquired by since the
execution and delivery of the Original Indenture (the Original Indenture, as
heretofore supplemented and modified and as hereby supplemented and modified
being herein sometimes called the "Indenture"); and
WHEREAS, all conditions necessary to authorize the execution, delivery and
recording of this Thirty-fifth Supplemental Indenture and to make this Thirty-
fifth Supplemental Indenture a valid and binding indenture of mortgage for the
security of the Bonds of the Company issued or to be issued under the Indenture
have been complied with or have been done or performed;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That, in order to secure equally and ratably the payment of the principal
of and premium, if any, and interest on the Bonds issued under and secured by
the Indenture, at any time
4
<PAGE>
outstanding, according to their tenor and effect, and the performance of all the
covenants and conditions in the Indenture and in said Bonds contained, the
Company for and in consideration of the premises and of the purchase and
acceptance of said Bonds by the holders thereof, and of the sum of one dollar
($1.00) and of other valuable consideration to it duly paid by the Trustees at
or before the execution and delivery of these presents, the receipt whereof is
hereby acknowledged, has executed and delivered these presents, and has granted,
bargained, sold, conveyed, transferred, pledged, assigned, remised, released,
mortgaged, set over and confirmed, and by these presents does grant, bargain,
sell, convey, transfer, pledge, assign, remise, release, mortgage, set over and
confirm, all of the property hereinafter described (except the property
described in Part IV hereof), which has been acquired by the Company since the
execution and delivery by it of the Original Indenture, that part not situated
in the State of California unto the Trustees and their successors and assigns,
and that part situated in the State of California unto the Individual Trustee
and his successors and assigns, to wit:
PART I.
REAL PROPERTY IN THE STATE OF CALIFORNIA
The following described pieces, parcels or tracts of land, easements and
rights and interests in and to land lying and being in the State of California,
together with all improvements of every description thereon situate or in any
wise incident or appertaining thereto:
[TO BE PROVIDED BY THE COMPANY.]
REAL PROPERTY IN THE STATE OF NEVADA
The following described pieces, parcels or tracts of land, easements and
rights and interests in and to land lying and being in the State of Nevada,
together with all improvements of every description thereon situate or in any
wise incident or appertaining thereto:
[TO BE PROVIDED BY THE COMPANY.]
PART II.
ALL OTHER PROPERTY
Whether the same has or has not been specifically described or referred to
elsewhere in the Indenture, and provided the same is not therein or herein
elsewhere expressly excepted, all the corporate and other franchises owned by
the Company, and all permits, ordinances, easements, privileges, immunities,
patents and licenses, all rights to construct, maintain and operate overhead and
underground systems for the distribution and transmission of electric current,
gas, water, steam heat or other agencies for the supplying to itself and to
others of light,
5
<PAGE>
heat, power and water, all rights of way and all grants and consents and all
leases and leasehold interests whatsoever (not therein or herein specifically
excepted) whether the same or any of the same are now owned or hereafter
acquired by the Company; also all other property, real, personal and mixed, now
owned or hereafter acquired by the Company, including (but not limited to) all
its properties situated in the cities of Reno, Sparks, Carson City, Yerington,
Lovelock, Elko, Winnemucca, Hawthorne, Tonopah and Battle Mountain, in the
Counties of Carson City, Churchill, Douglas, Elko, Esmeralda, Eureka, Humboldt,
Lander, Lyon, Mineral, Nye, Pershing, Storey, Washoe and White Pine, in the
State of Nevada, and also in the Counties of Alpine, El Dorado, Mono, Nevada,
Placer, Plumas and Sierra in the State of California and wheresoever situated
(not therein or herein specifically excepted), including (without in any wise
limiting or impairing by the enumeration of the same, the generality, scope and
intent of the foregoing or of any general description contained in the Original
Indenture, as heretofore supplemented and modified and hereby supplemented and
modified), all lands, rights of way, water and riparian rights and all interests
therein, dams and dam sites, gas and electric light, heat and power plants and
systems, water and/or water-works plants and systems, plants, manufactories,
power houses, substations, garages, sheds, warehouses, repair shops, storage
houses, buildings, tunnels, bridges, distribution and transmission lines, pipe
lines, conduits, towers, poles, wires, cables and all other structures,
machinery, engines, boilers, dynamos, electric machines, regulators, meters,
transformers, generators, motors, electric and mechanical appliances, and other
equipment of every description; and also all accessions, additions, alterations,
improvements, betterments, developments, extensions and enlargements hereafter
made, constructed or acquired by the Company to, of or upon any or all of the
properties, equipment, system and/or plants, and/or property used thereby or
useful therefor or incidental thereto or connected therewith; and the
reversions, reservations and remainders and all the estate, right, title,
interest, possession, claim and demand of every nature and description
whatsoever of the Company, as well at law as in equity of, in and to the same
and every part and parcel thereof.
PART III.
INCOME
All tolls, revenues, earnings, income, rents, issues and profits of all
property, real and personal, tangible and intangible, which are now or hereafter
shall be or be required to be made subject to the lien of the Indenture, or
pledged thereunder.
PART IV.
PROPERTIES EXCEPTED
There is, however, expressly excepted and excluded from the lien and
operation of the Indenture:
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<PAGE>
(a) All property excepted or excluded or intended to be excepted or
excluded by the Granting Clauses of the Original Indenture as
heretofore supplemented and modified and as hereby supplemented and
modified, subject to the provisions of Section 5.16 of the Original
Indenture as renumbered by Section 1.07 of the Twentieth Supplemental
Indenture, provided, however, that no properties necessary or
appropriate for purchasing, storing, generating, manufacturing,
utilizing, transmitting, supplying and/or disposing of electricity,
water and/or gas shall be excepted from the lien of the Indenture,
anything contained in Subdivision I of Part X of the Granting Clauses
of the Original Indenture to the contrary notwithstanding; and
(b) All property released or otherwise disposed of pursuant to the
provisions of Article 6 of the Original Indenture,
(all herein sometimes for convenience collectively referred to as "excepted
property").
TO HAVE AND TO HOLD all that part of the aforesaid property, rights,
privileges, franchises and immunities not situated in the State of California,
whether now owned or hereafter acquired by the Company, unto the Trustees, and
their respective successors and assigns in trust forever; and
TO HAVE AND TO HOLD all that part of the aforesaid property, rights,
privileges, franchises and immunities situated in the State of California,
whether now owned or hereafter acquired by the Company, unto the Individual
Trustee, and his successors and assigns in trust forever.
SUBJECT, HOWEVER, to the exceptions and reservations and matters
hereinabove recited, any permitted liens, other than liens and encumbrances
junior to the lien of the Indenture, as defined in Section 1.01(y) of the
Original Indenture as modified by Section 1.03 of the Twentieth Supplemental
Indenture, and to liens existing on any property hereafter acquired by the
Company at the time of such acquisition or permitted by Section 5.04 of the
Original Indenture.
BUT IN TRUST, NEVERTHELESS, for the equal pro rata benefit, security and
protection of all present and future holders of the Bonds issued and to be
issued under and secured by the Indenture, and to secure the payment of such
Bonds and the interest thereon, in accordance with the provisions of said
Bonds and of the Indenture, without any discrimination, preference, priority
or distinction as to lien or otherwise of any Bond over any other Bond,
except insofar as any sinking fund established in accordance with the
provisions of the Indenture may afford additional security for the Bonds of
any one or more series and except as provided in Section 10.29 of the
Original Indenture, so that the principal and interest of every such Bond
shall be equally and ratably secured by the Indenture, as if all said Bonds
had been issued, sold and delivered for value simultaneously with the
execution of the Original Indenture and to secure the performance of and the
compliance with the covenants and conditions of said Bonds and of the
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Indenture, and upon the trusts and for the uses and purposes and subject to
the covenants, agreements, provisions and conditions hereinafter set forth
and declared; it being hereby agreed as follows, to wit:
ARTICLE 1
DESCRIPTION OF BONDS OF THE NN SERIES
Section 1.01. Establishment of Bonds of the NN Series. There shall be and
hereby is established a new series of Bonds to be issued under and secured by
the Indenture and to be designated as the Company's "First Mortgage Bonds, 9%
Series NN due 2037" (herein sometimes referred to as "Bonds of the NN Series").
Section 1.02. Terms of Bonds of the NN Series. The Bonds of the NN Series
shall be evidenced by a single registered Bond in the principal amount and
denomination of Thirty-five Million Dollars ($35,000,000) due January 1, 2037;
it shall bear interest at the rate per annum shown in its title, payable semi-
annually on January 1 and July 1 of each year, commencing July 1, 1997.
Interest on the Bonds of the NN Series shall be computed on the basis of a 360-
day year of twelve 30-day months. The Bonds of the NN Series shall be dated as
provided in Section 2.08 of the original Indenture as modified by Section 2.03
of the Twelfth Supplemental Indenture.
The single Bond of the NN Series shall be numbered 1 and shall upon
issuance be delivered by the Company to and registered in the name of the
Indenture Trustee and thereafter shall not be sold, assigned, pledged,
mortgaged, transferred or otherwise disposed of except as required to effect (a)
an assignment to a successor Indenture Trustee under the Collateral Trust
Indenture or (b) a surrender to the Trustee (i) to effect an exchange, in
accordance with applicable law, in connection with any Federal or State
bankruptcy, insolvency, reorganization or similar proceeding involving the
Company, (ii) to effect an exchange by the Company with the Indenture Trustee of
any Mortgage Bonds (as defined in the Collateral Trust Indenture) upon payment
or deemed payment or other satisfaction and discharge of a portion of any
Mortgage Bonds, (iii) to effect a surrender or an exchange of any Mortgage Bonds
pursuant to Section 406 or 503 of the Collateral Trust Indenture or (iv) to
obtain the final payment due on any Mortgage Bonds as required by the terms of
the Indenture. Bonds issued upon any such transfer or surrender shall be
numbered from 2 upwards and issued to the transferee or person surrendering the
same for a like principal amount, less the principal amount of such bond that
has been paid, deemed to have been paid or otherwise satisfied and discharged or
surrendered for cancellation pursuant to Section 406 or 503 of the Collateral
Trust Indenture.
It is expected that the Company, pursuant to the Collateral Trust
Indenture, will furnish directly to the Indenture Trustee at its principal
corporate trust office all funds required for any and all payments of principal
of, and interest and premium on, Securities. Any such payment may be made in
any coin or currency of the United States which is legal tender for the payment
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<PAGE>
of public and private debts. The obligation of the company to make any payment
of the principal of or interest on the portion of the Bond of the NN Series that
is designated as Designated Mortgage Bonds (as such term is defined in the
Collateral Trust Indenture and hereinafter called "Designated Mortgage Bonds"),
whether at its stated maturity or upon redemption (including any redemption
pursuant to Section 404 of the Collateral Trust Indenture), shall be fully or
partially, as the case may be, deemed to have been paid or otherwise satisfied
and discharged to the extent that at the time any such payment shall be due, the
then due principal of (and premium, if any) or interest on the Securities to
which such Designated Mortgage Bonds relate shall have been fully or partially
paid, deemed to have been paid or otherwise satisfied and discharged. In
addition, such obligation to make any payment of the principal of or interest on
the portion of the Bond of the NN Series that is designated as Designated
Mortgage Bonds at any time shall be deemed to have been satisfied and discharged
to the extent that the amount of the Company's obligation to make any payment of
the principal of or interest on the portion of the Bond of the NN Series that is
designated as Designated Mortgage Bonds exceeds the obligation of the Company at
that time to make any payment on the applicable Redemption Date or Stated
Maturity (each as defined in the Collateral Trust Indenture) of the principal of
(and premium, if any) or interest on the Securities to which such portion of the
Bond of the NN Series that is designated as Designated Mortgage Bonds relates.
The obligation of the Company to make any payment of the principal of or
interest on the Bond of the NN Series other than the portion that is designated
as Designated Mortgage Bonds shall be deemed to have been satisfied and
discharged in full at the time any such payment shall be stated to be due.
Unless payment then is or has been made pursuant to the next preceding
paragraph, payment of the principal of, and premium, if any, and interest on the
single Bond of the NN Series shall be made in any coin or currency of the United
States which at the time of payment is legal tender for the payment of public
and private debts at the principal corporate trust office of the Indenture
Trustee on or prior to the business day preceding the due date for such payment.
Any such payment of principal, premium and interest shall be credited as and
used to make a corresponding payment of principal, premium and interest on the
Securities.
The Trustees may conclusively presume that the obligation of the Company to
pay the principal of and premium, if any, and interest on the Bond of the NN
Series as the same shall become due and payable at maturity or upon redemption
shall have been duly and punctually paid or deemed to have been paid or
otherwise satisfied and discharged in full unless and until it shall have
received notice in writing to the contrary from the Indenture Trustee,
specifying the amount of funds required to make such payment after giving effect
to Section 403(a) of the Collateral Trust Indenture.
The Indenture Trustee, by acceptance of the single Bond of the NN Series,
shall agree to make the notations on the Schedule of Designations and
Prepayments required by the Collateral Trust Indenture and to surrender said
Bond to the Trustee upon the circumstances set forth in Section 406 or 503 of
the Collateral Trust Indenture.
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<PAGE>
If any of the following events of default occurs under Section 601 of the
Collateral Trust Indenture, it shall be deemed to be the corresponding default
under Section 10.01 of the Indenture as hereafter provided: (i) default in the
payment of any interest upon any Security when such interest becomes due and
payable shall be deemed to be a default, under Section 10.01(a) of the
Indenture, in the due and punctual payment of a like amount of interest on the
Bond of the NN Series, (ii) default in the payment of the principal of (or
premium, if any, on) any Security at the stated maturity thereof or upon
redemption thereof shall be deemed to be a default, under Section 10.01(b) of
the Indenture, in the due and punctual payment of a like amount of principal of
the Bond of the NN Series, (iii) default in the deposit of any sinking fund
payment when and as due by the terms of a Security shall be deemed to be a
default under Section 10.01(d) of the Indenture, (iv) a default in the
performance, or breach, of any covenant or warranty of the Company as described
in Section 601(4) of the Collateral Trust Indenture shall be deemed to be a
default under Section 10.01(d) of the Indenture, (v) the occurrence of an event
described in Section 601(5) of the Collateral Trust Indenture shall be deemed to
be a default under Section 10.01(e) of the Indenture, (vi) the occurrence of an
event described in Section 601(6) of the Collateral Trust Indenture shall be
deemed to be a default under Section 10.01(f) of the Indenture and (vii)
occurrence of an event of default provided in an indenture supplemental to the
Collateral Trust Indenture shall be deemed to be a default under Section
10.01(d) of the Indenture.
Any notice affecting or relating to the Bonds of the NN Series required or
permitted to be given under the Indenture may be given by mailing the same by
first class mail, postage prepaid, to the Indenture Trustee at its address as
the same appears on the Bond Register for the Bonds of the NN Series. The
certificate of the Trustee that such mailing has been effected shall be
conclusive evidence of compliance with the requirements of Section 4.02 and of
Section 16.08 of the Original Indenture as modified by Section 2.07 of the
Twelfth Supplemental Indenture, whether or not the Indenture Trustee receives
such notice.
The Trustee hereunder shall, by virtue of its office as such Trustee, be
the Registrar and Transfer Agent of the Company for the purpose of registering
and transferring Bonds of the NN Series, and shall maintain a bond register for
the Bonds of the NN Series.
Section 1.03. Prepayment Provisions of the Bonds of the NN Series. The
Bond of the NN Series shall be redeemable at the option of the Company at any
time, but only to the extent that such Bond of the NN Series is (i) a Designated
Mortgage Bond which the Company has incurred the obligation under the Collateral
Trust Indenture to redeem, or (ii) not a Designated Mortgage Bond, and shall not
otherwise be redeemable pursuant to the requirements of the Indenture, except
pursuant to the provisions of clause 2 of Section 6.05 of the Original
Indenture.
In the event of a redemption in accordance with the provisions of the
preceding paragraph, the Indenture Trustee shall forthwith make notation of the
principal amount of the Bond of the NN Series so redeemed on the Schedule of
Designations and Prepayments printed
10
<PAGE>
thereon, and shall promptly notify the Trustee of the amount of such payment and
that notation of such payment has been duly made.
All portions of the single Bond of the NN Series which may from time to
time be paid or prepaid in accordance with this Section 1.03 shall thereupon be
deemed to be funded, and no such portion may be reissued, so long as any portion
of said Bond of the NN Series is outstanding.
Section 1.04. Form of Bonds of the NN Series. The Bonds of the NN Series
and the Trustee's authentication certificate to be executed on the Bonds of said
series shall be substantially in the forms following, respectively:
11
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[FORM OF BONDS OF NN SERIES]
NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS
ON TRANSFER, TO WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION
PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE BOND REPRESENTED BY THIS
CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH
BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE SECURITIES LAWS.
SIERRA PACIFIC POWER COMPANY
Incorporated under the laws of the State of Nevada
First Mortgage Bonds, 9% Series NN due 2037
Due January 1, 2037
No. NN-__ $35,000,000
SIERRA PACIFIC POWER COMPANY, a corporation of the State of Nevada
(hereinafter called the "Company"), for value received, hereby promises to
pay to ____________________, as trustee (with its successors as such, the
"Indenture Trustee") under that certain Collateral Trust Indenture, dated as
of June 1, 1992, as supplemented (as so supplemented, the "Collateral Trust
Indenture"), between the Company and the Indenture Trustee, providing for the
issuance from time to time of the Company's collateral trust notes (the
"Securities"), to be issued in one or more series or tranches as in the
Collateral Trust Indenture provided, on January 1, 2037, for the ratable
benefit of the Holders from time to time of the series or tranches of
outstanding Securities for which portions of this Bond are designated as
described below, the sum of Thirty-five Million Dollars, and to pay to the
Indenture Trustee interest thereon from January 1, 1997 or the most recent
January 1 or July 1 to which interest has been paid or deemed to have been
paid or otherwise satisfied and discharged, at the rate of 9% per annum on
January 1 and July 1 in each year, commencing July 1, 1997, until the
Company's obligation with respect to the payment of such principal shall have
been discharged. Notwithstanding the foregoing, the obligation of the
Company to make any payment of the principal of or interest on the portion of
this Bond that is designated as Designated Mortgage Bonds (as such term is
defined in the Collateral Trust Indenture), whether at maturity, upon
redemption (including any redemption pursuant to Section 404 of the
Collateral Trust Indenture) or otherwise, shall be fully or partially, as the
case may be, deemed to have been paid or otherwise satisfied and discharged
to the extent that at the time any such payment shall be due, the then due
principal of (and premium, if any) or interest on the Securities to which
such Designated Mortgage Bonds relate, shall have been fully or partially
paid, deemed to have been paid or otherwise satisfied and discharged. In
addition, such obligation to make any payment
12
<PAGE>
of the principal of or interest on the portion of this Bond that is
designated as Designated Mortgage Bonds at any time shall be deemed to have
been satisfied and discharged to the extent that the amount of the Company's
obligation to make any payment of the principal of or interest on the portion
of this Bond that is designated as Designated Mortgage Bonds exceeds the
obligation of the Company at that time to make any payment on the applicable
Redemption Date or Stated Maturity (as such terms are defined in the
Collateral Trust Indenture) of the principal of (and premium, if any) or
interest on the Securities to which such portion of this Bond that is
designated as Designated Mortgage Bonds relates. The obligation of the
Company to make any payment of the principal of or interest on this Bond
other than the portion that is designated as Designated Mortgage Bonds shall
be deemed to have been satisfied and discharged in full at the time any such
payment shall be stated to be due.
The holder of this Bond by acceptance hereof agrees that whenever any
designation or payment on account of the principal of this Bond is made or
occurs under any provision of the indenture referred to below (the "Indenture")
or the Collateral Trust Indenture, the holder hereof shall promptly note on the
Schedule of Designations and Prepayments the date and amount of each such
designation or payment of principal, and shall promptly notify the Trustee of
the amount of each such designation or payment and that the notation of
designation or payment has been duly made, and further agrees to surrender this
Bond to the Trustee for cancellation when all principal of, premium, if any, and
interest on this Bond shall have been duly paid.
Unless payment then is or has been made pursuant to the second preceding
paragraph, the principal of and interest on this Bond will be paid in lawful
money of the United States of America and will be payable at the principal
corporate trust office of the Indenture Trustee by check or wire transfer to the
order of the Indenture Trustee in Federal funds immediately available at said
office of the Indenture Trustee, in each case on or prior to the business day
preceding the due date for such payment. The holder of this Bond by acceptance
hereof agrees that any such payment of principal or interest on this Bond shall
be credited as and used to make a corresponding payment of principal, premium or
interest on the Securities.
This Bond is the single registered bond of the Company of the series
specified in the title hereof, and is issued in the aggregate principal amount
of $35,000,000 in order to secure by the lien of the Indenture hereinafter
mentioned the obligation of the Company to pay duly and punctually the principal
of (and premium, if any) and interest on Outstanding Securities (as defined in
the Collateral Trust Indenture) in accordance with the terms thereof, and the
Collateral Trust Indenture, and evidences the Bonds of a series of an authorized
issue of bonds of the Company, known as First Mortgage Bonds, not limited as to
maximum principal amount except as otherwise provided in the Indenture
hereinafter mentioned, all issued or issuable in one or more series (which
several series may be of different denominations, dates and tenor) under and
equally secured (except insofar as any sinking fund, established in accordance
with the provisions of the Indenture hereinafter mentioned, may afford
additional security for other Bonds of any particular series) by an Indenture of
Mortgage dated as of December 1, 1940, duly executed and delivered by the
Company's predecessor, Sierra Pacific Power Company, a Maine corporation, and
duly assumed by the Company by means of the Tenth Supplemental Indenture
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<PAGE>
hereinafter mentioned, to The New England Trust Company (now State Street Bank
and Trust Company by succession, herein sometimes called "Trustee"), and Leo W.
Huegle (now Gerald R. Wheeler by succession), as Trustees, as supplemented and
modified by the First Supplemental Indenture, dated as of August 1, 1947, by the
Second Supplemental Indenture, dated as of April 11, 1948, by the Ninth
Supplemental Indenture, dated as of June 1, 1964, by the Tenth Supplemental
Indenture, dated as of March 31, 1965, by the Twelfth Supplemental Indenture,
dated as of July 1, 1967, by the Fourteenth Supplemental Indenture, dated as of
November 1, 1972, by the Fifteenth Supplemental Indenture, dated as of May 1,
1974, by the Seventeenth Supplemental Indenture, dated as of July 1, 1976, by
the Eighteenth Supplemental Indenture, dated as of August 1, 1977, by the
Nineteenth Supplemental Indenture, dated as of April 1, 1978, and by the
Twentieth Supplemental Indenture, dated as of October 1, 1978, and as
supplemented by all other indentures supplemental thereto including a Thirty-
fifth Supplemental Indenture, dated as of January 1, 1997, executed and
delivered by the Company (or executed and delivered by its predecessor and duly
assumed by the Company) to said Trustees, to which Indenture of Mortgage and all
indentures supplemental thereto (herein sometimes collectively called the
"Indenture") reference is hereby made for a description of the property
mortgaged and pledged as security for said bonds, the rights and remedies and
limitations on such rights and remedies of the registered owner of this Bond in
regard thereto, the terms and conditions upon which said bonds are secured
thereby, the terms and conditions upon which additional bonds and coupons may be
issued thereunder and the rights, immunities and obligations of the Trustees
under said Indenture; but neither the foregoing reference to said Indenture, nor
any provision of this Bond or of said Indenture, shall affect or impair the
obligation of the Company, which is absolute, unconditional and unalterable, to
pay at the maturity herein provided the principal of and premium, if any, and
interest on this Bond as herein provided.
Said Indenture, among other things, provides that no bondholder or
bondholders may institute any suit, action or proceeding for the collection of
this Bond, or claim for interest thereon, or to enforce the lien of said
Indenture, if and to the extent that the institution or prosecution thereof or
the entry of a judgment or a decree therein would, under applicable law, result
in the surrender, impairment, waiver or loss of the lien of said Indenture upon
any property subject thereto.
To the extent permitted and as provided in said Indenture, modifications or
alterations of said Indenture, or any indenture supplemental thereto, and of the
bonds issued thereunder and of the rights and obligations of the Company and the
rights of the bearers or registered owners of the bonds and coupons, if any, may
be made with the consent of the Company and with the written approvals or
consents of the bearers or registered owners of not less than seventy-five per
centum (75%) in principal amount of the bonds outstanding, and unless all of the
bonds then outstanding under said Indenture are affected in the same manner and
to the same extent by such modification or alteration, with the written
approvals or consents of the bearers or registered owners of not less than
seventy-five per centum (75%) in principal amount of the bonds of each series
outstanding, provided, however, that no such alteration or modification shall,
without the written approval of or consent of the bearer or registered owner of
any bond affected thereby, (a) impair or affect the right of such bearer or
registered owner to receive payment of the
14
<PAGE>
principal of and interest on such bond, on or after the respective due dates
expressed in such bond, or to institute suit for the enforcement of any such
payment on or after such respective dates, except that the holders of not less
than seventy-five per centum (75%) in principal amount of the bonds outstanding
may consent on behalf of the bearers or registered owners of all of the bonds to
the postponement of any interest payment for a period of not exceeding three (3)
years from its due date, or (b) deprive any bearer or registered owner of the
bonds of a lien on the mortgaged and pledged property, or (c) reduce the
percentage of the principal amount of the bonds upon the consent of which
modifications may be effected as aforesaid.
If any of the following events occurs under Section 601 of the Collateral
Trust Indenture, it shall be deemed to be the corresponding default under
Section 10.01 of the Indenture as set forth hereafter: (i) default in the
payment of any interest upon any Security when such interest becomes due and
payable shall be deemed to be a default, under Section 10.01(a) of the
Indenture, in the due and punctual payment of a like amount of interest on this
Bond, (ii) default in the payment of the principal of (or any premium, if any,
on) any Security at the stated maturity thereof or upon redemption thereof shall
be deemed to be a default, under Section 10.01(b) of the Indenture, in the due
and punctual payment of a like amount of principal of this Bond, (iii) default
in the deposit of any sinking fund payment, when and as due by the terms of a
Security, shall be deemed to be a default under Section 10.01(d) of the
Indenture, (iv) default in the performance, or breach, of any covenant or
warranty of the Company as described in Section 601(4) of the Collateral Trust
Indenture shall be deemed to be a default under Section 10.01(d) of the
Indenture, (v) occurrence of an event described in Section 601(5) of the
Collateral Trust Indenture shall be deemed to be a default under Section
10.01(e) of the Indenture, (vi) the occurrence of an event described in Section
601(6) of the Collateral Trust Indenture shall be deemed to be a default under
Section 10.01(f) of the Indenture and (vii) occurrence of an event of default
provided in an indenture supplemental to the Collateral Trust Indenture shall be
deemed to be a default under Section 10.01(d) of the Indenture.
In case an event of default as defined in said Indenture shall occur, the
principal of this Bond may become or be declared due and payable before maturity
in the manner and with the effect provided in said Indenture. The holders,
however, of certain specified percentages of the bonds at the time outstanding,
including in certain cases specified percentages of bonds of particular series,
may in the cases, to the extent and under the conditions provided in said
Indenture, waive defaults thereunder and the consequences of such defaults.
This Bond has been issued and delivered to, registered in the name of and
pledged with the Indenture Trustee in trust for the ratable benefit of the
Holders (as defined in the Collateral Trust Indenture) from time to time of the
Outstanding Securities and shall not be sold, assigned, pledged, mortgaged,
transferred or otherwise disposed of except as required to effect (a) an
assignment to a successor Indenture Trustee under the Collateral Trust Indenture
or (b) a surrender to the Trustee (i) to effect an exchange, in accordance with
applicable law, in connection with any Federal or State bankruptcy, insolvency,
reorganization or similar proceeding involving the Company, (ii) to effect an
exchange by the Company with the Indenture Trustee of any Mortgage Bonds (as
defined in the Collateral Trust Indenture) upon payment or
15
<PAGE>
deemed payment or other satisfaction and discharge of a portion of any Mortgage
Bonds, (iii) to effect a surrender or an exchange of any Mortgage Bonds pursuant
to Section 406 of the Collateral Trust Indenture or (iv) to obtain the final
payment due on any Mortgage Bonds as required by the terms of the Indenture.
Any such transfer or surrender shall be made at the principal corporate trust
office in Boston, Massachusetts of the Trustee, upon surrender and cancellation
of this Bond. Following any such transfer or such surrender of this Bond in
part, and unless such transfer or surrender has been made in connection with the
satisfaction and discharge of the Collateral Trust Indenture, a new fully
registered Bond of the same series for a like principal amount, less the
principal amount of this Bond that has been paid, deemed to have been paid or
otherwise satisfied and discharged or surrendered for cancellation pursuant to
Section 406 or 503 of the Collateral Trust Indenture, will be issued to such
transferee in exchange therefor as provided in the Indenture. The Company
hereby waives any right to make a charge for such an exchange or transfer of
this Bond. The Company and the Trustees may deem and treat the Indenture
Trustee as the absolute owner hereof for the purpose of receiving payment and
for all other purposes.
The Trustees may conclusively presume that the obligation of the Company to
pay the principal of and interest on the Bond of this series as the same shall
become due and payable shall have been duly and punctually paid or deemed to
have been paid or otherwise satisfied and discharged in full unless and until it
shall have received notice in writing to the contrary from the Indenture
Trustee, specifying the amount of funds required to make such payment after
giving effect to Section 403(a) of the Collateral Trust Indenture.
This Bond shall be redeemable at the option of the Company at any time, but
only to the extent that this Bond is (i) a Designated Mortgage Bond which the
Company has incurred the obligation under the Collateral Trust Indenture to
redeem, or (ii) not a Designated Mortgage Bond, and shall not otherwise be
redeemable pursuant to the requirements of the Indenture, except as provided in
this paragraph. In case all or substantially all of the electric properties of
the Company are sold to or taken through the exercise of the right of eminent
domain or the right to purchase by any municipal or governmental body or agency,
the principal of this Bond will, upon receipt by the Company of payment or
compensation, become due and payable before maturity at the principal amount
thereof and accrued interest thereon, all as provided in said Indenture.
In the event of a redemption in accordance with the provisions of the
preceding paragraph, the Indenture Trustee shall forthwith make notation of the
principal amount of this Bond so redeemed on the Schedule of Designations and
Prepayments printed hereon, and shall promptly notify the Trustee of the amount
of such payment and that notation of such payment has been duly made.
The holder of this Bond, pursuant to the terms of Section 402 of the
Collateral Trust Indenture, hereby waives its right, pursuant to Section 4.03 of
the Indenture, to the deposit of moneys for redemption before the redemption
date.
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<PAGE>
The Company and the Trustee and any paying agent may deem and treat the
person in whose name this Bond shall be registered upon the Bond register for
the Bonds of the NN Series as the absolute owner of such Bond for the purpose of
receiving payment of or on account of the principal of and interest on this Bond
and for all other purposes, whether or not this Bond be overdue, and neither the
Company nor the Trustee nor any paying agent shall be affected by any notice to
the contrary; and all such payments so made to such registered owner or upon his
order shall be valid and effectual to satisfy and discharge the liability upon
this Bond to the extent of the sum or sums so paid.
Before any transfer of this Bond by the registered holder or his or its
legal representative will be recognized or given effect by the Company or the
Trustee, the registered holder shall note hereon the date to which interest has
been paid as well as the amounts of all principal prepayments hereon, and shall
notify the Company and the Trustee of the name and address of the transferee and
shall afford the Company and the Trustee the opportunity of verifying the
notation as to payment of interest and principal. By the acceptance hereof the
holder of this Bond and each transferee shall be deemed to have agreed to
indemnify and hold harmless the Company and the Trustee against all losses,
claims, damages or liability arising out of any failure on the part of the
holder or of any such transferee to comply with the requirements of the
preceding sentence.
It is part of the contract herein contained that each registered owner
hereof by the acceptance hereof waives all right of recourse to any personal
liability of any incorporator, stockholder, officer or director, past, present
or future, of the Company, as such, or of any predecessor or successor
corporation, howsoever arising, for the collection of any indebtedness
hereunder; and as a part of the consideration for the issue hereof releases from
all such liability each such incorporator, stockholder, officer or director, all
as provided in said Indenture.
Each registered owner hereof by his acceptance hereof waives any right to
exchange any unpaid portion of this Bond for another Bond under Section 4.01 of
the Indenture.
This Bond has not been registered under the Securities Act of 1933, as
amended, and may not be offered or sold in contravention of said Act.
This Bond shall not become or be valid or obligatory for any purpose until
the authentication certificate endorsed hereon shall have been signed by the
Trustee.
17
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IN WITNESS WHEREOF, Sierra Pacific Power Company has caused this Bond to be
executed in its name and behalf by the manual or facsimile signature of its
Senior Vice President, Distribution Services Business Group, and its corporate
seal, or a facsimile thereof, to be affixed or printed hereon and attested by
the manual or facsimile signature of its Secretary or one of its Assistant
Secretaries.
SIERRA PACIFIC POWER COMPANY
Dated: By:
---------------------------- --------------------------------
Senior Vice President, Distribution
Services
Business Group
Attest:
- ---------------------------------------
Secretary
AUTHENTICATION CERTIFICATE
This Bond is the single fully-registered bond of the series designated
therein, referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
Corporate Trustee
By
-------------------------------------------
Authorized Signatory
SCHEDULE OF DESIGNATIONS AND PREPAYMENTS
Total
Principal
Principal Amount
Amount Principal Currently
Designated Amount Designated
Date of as Prepaid of as
Designation Designated Amount Designated Authorized
or Mortgage Previously Mortgage Official
Prepayment Bond Designated Bonds and Title
- ---------- ---------- ---------- ---------- ---------
18
<PAGE>
ARTICLE 2
PRINCIPAL AMOUNT OF BONDS PRESENTLY TO BE OUTSTANDING
Section 2.01 The total aggregate principal amount of First Mortgage Bonds
of the Company issued and outstanding and presently to be issued and outstanding
under the provisions of and secured by the Indenture will be Five Hundred
Ninety-Nine Million Six Hundred Ninety-nine Thousand One Hundred Four Dollars
and _______ cents ($599,699,104.__) namely Fifteen Million Dollars ($15,000,000)
principal amount of First Mortgage Bonds, 6 1/2% Series due 1997, now issued and
outstanding, One Million Eight Hundred Eighty Thousand Seven Hundred Forty-seven
Dollars and ______ Cents ($1,880,747.__) principal amount of First Mortgage
Bonds, 2% Series due 2011, now issued and outstanding, Three Million Four
Hundred Eight Thousand One Hundred Ten Dollars and ______ Cents ($3,408,110.__)
principal amount of First Mortgage Bonds 5% Series Y due 2024, now issued and
outstanding, One Hundred Sixty Thousand Two Hundred Forty-seven Dollars and
______ Cents ($160,247.__) principal amount of First Mortgage Bonds, 2% Series Z
due 2004, now issued and outstanding, Thirty-nine Million Five Hundred Thousand
Dollars ($39,500,000) principal amount of First Mortgage Bonds, 6.55% Series AA
due 2013, now issued and outstanding, Seventeen Million Five Hundred Thousand
Dollars ($17,500,000) principal amount of First Mortgage Bonds, 6.65% Series BB
due 2017, now issued and outstanding, One Hundred Fifteen Million Dollars
($115,000,000) principal amount of First Mortgage Bonds, 12% Series CC due 2022,
Forty-five Million Dollars ($45,000,000) principal amount of First Mortgage
Bonds, 6.30% Series DD due 2014, now issued and outstanding, Ten Million Two
Hundred Fifty Thousand Dollars ($10,250,000) principal amount of First Mortgage
Bonds, 6.30% Series EE due 2022, now issued and outstanding, One Million Dollars
($1,000,000) principal amount of First Mortgage Bonds, 6.35% Series FF due 2012,
now issued and outstanding, Twenty Million Dollars ($20,000,000) principal
amount of First Mortgage Bonds, 6.55% Series GG due 2020, now issued and
outstanding, Seventy-Five Million Dollars ($75,000,000) principal amount of
First Mortgage Bonds, 6.65% Series HH due 2017, now issued and outstanding,
Twenty-one Million Two Hundred Thousand Dollars ($21,200,000) principal amount
of First Mortgage Bonds, 6.70% Series II due 2032, now issued and outstanding,
Nine Million Eight Hundred Thousand Dollars ($9,800,000) principal amount of
First Mortgage Bonds, 5.90% Series JJ due 2023, now issued and outstanding,
Thirty Million Dollars ($30,000,000) principal amount of First Mortgage Bonds,
5.90% Series KK due 2023, now issued and outstanding, Eighty Million Dollars
($80,000,000) principal amount of First Mortgage Bonds, 10% Series LL due 2033,
now issued and outstanding, Eighty Million Dollars ($80,000,000) principal
amount of First Mortgage Bonds, 9% Series MM due 2035, now issued and
outstanding, and Thirty-Five Million Dollars ($35,000,000) principal amount of
First Mortgage Bonds, 9% Series NN due 2037, established by resolution of the
Board of Directors and to be issued upon compliance by the Company with the
provisions of Article 3 of the Original Indenture.
19
<PAGE>
ARTICLE 3
MISCELLANEOUS
Section 3.01. This instrument is executed and shall be construed as an
indenture supplemental to the Original Indenture, as heretofore supplemented and
modified, and shall form a part thereof, and the Original Indenture as so
supplemented and modified is hereby confirmed. All terms used in this Thirty-
fifth Supplemental Indenture shall be taken to have the same meaning as in the
Original Indenture, as heretofore supplemented and modified, except in cases
where the context clearly indicates otherwise.
Section 3.02. All recitals in this Supplemental Indenture are made by the
Company only and not by the Trustees; and all of the provisions contained in the
Original Indenture, as heretofore supplemented and modified, in respect of the
rights, privileges, immunities, powers and duties of the Trustees shall be
applicable in respect hereof as fully and with like effect as if set forth
herein in full.
Section 3.03. Although this Supplemental Indenture is dated for
convenience and for the purpose of reference as of January 1, 1997, the actual
date or dates of execution by the Company and the Trustees are as indicated by
their respective acknowledgments hereto annexed.
Section 3.04. In order to facilitate the recording or filing of this
Supplemental Indenture, the same may be simultaneously executed in several
counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute but one and the same instrument.
Section 3.05. The Company hereby acknowledges receipt from the Trustees of
a full, true and complete copy of this Supplemental Indenture.
20
<PAGE>
IN WITNESS WHEREOF, SIERRA PACIFIC POWER COMPANY has caused this Thirty-
fifth Supplemental Indenture to be signed in its corporate name and behalf by
its Senior Vice President, Distribution Services Business Group and its
corporate seal to be hereunto affixed and attested by its Secretary; and State
Street Bank and Trust Company in token of its acceptance of the trust hereby
created has caused this Thirty-fifth Supplemental Indenture to be signed in its
corporate name and behalf, and its corporate seal to be hereunto affixed, by its
President or one of its Vice Presidents or Assistant Vice Presidents, and its
corporate seal to be attested by one of its Assistant Secretaries; and Gerald R.
Wheeler in token of his acceptance of the trust hereby created has hereunto set
his hand and seal, all of as of the day and year first above written.
SIERRA PACIFIC POWER COMPANY
By
-------------------------------------------
Senior Vice President, Distribution Services
Business Group
Attest:
- --------------------------- (CORPORATE SEAL)
Corporate Secretary
Signed, sealed and delivered on behalf of
SIERRA PACIFIC POWER COMPANY,
in the presence of:
- ---------------------------
21
<PAGE>
STATE STREET BANK AND TRUST COMPANY
By_______________________________
Assistant Vice President
Attest:
_____________________________ (CORPORATE SEAL)
Assistant Secretary
Signed, sealed and delivered on behalf of
STATE STREET BANK AND TRUST COMPANY
in the presence of:
_____________________________
___________________________________
Gerald R. Wheeler
Signed, sealed and delivered by
Gerald R. Wheeler in the presence of:
22
<PAGE>
STATE OF NEVADA )
)
COUNTY OF WASHOE ) ss.:
On this ____ day of January, 1997, (i) personally appeared before me, a
Notary Public in and for the County of Washoe, William E. Peterson, known to me
to be the Senior Vice President, Corporate Secretary and General Counsel of
Sierra Pacific Power Company, one of the corporations that executed the
foregoing instrument, and upon oath did depose that he is the officer of said
corporation as above designated, that he is acquainted with the seal of said
corporation, and that the said seal affixed to the said instrument is the
corporate seal of said corporation; that the signatures to said instrument were
made by the officers of said corporation as indicated after said signatures, and
that the corporation executed the said instrument freely and voluntarily and for
the purposes and uses therein named; and (ii) also before me personally appeared
Malyn K. Malquist and the same William E. Peterson to me personally known, who
being by me duly sworn did say that they are the Senior Vice President,
Distribution Services Business Group and the Senior Vice President, Corporate
Secretary and General Counsel, respectively, of Sierra Pacific Power Company,
and that the seal affixed to the foregoing instrument is the corporate seal of
said corporation, and acknowledged that the foregoing instrument was executed by
them on behalf of said corporation by authority of the Directors, and the said
Malyn K. Malquist and William E. Peterson also acknowledged the said instrument
to be the free act and deed of said corporation.
_______________________________
, Notary Public
My commission expires:
(NOTARIAL SEAL)
23
<PAGE>
COMMONWEALTH OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On this ____ day of January, 1997, (i) personally appeared before me, a
Notary Public, [Andrew M. Sinasky], known to me to be an Assistant Secretary of
State Street Bank and Trust Company, one of the corporations that executed the
foregoing instrument, and upon oath did depose that he is an officer of said
corporation as above designated, that he is acquainted with the seal of said
corporation, and that the said seal affixed to said instrument is the corporate
seal of said corporation; that the signatures to said instrument were made by
the officers of said corporation as indicated after said signatures, and that
the corporation executed the said instrument freely and voluntarily and for the
purposes and uses therein named; and (ii) also before me personally appeared
Brian J. Curtis and the same [Andrew M. Sinasky] to me personally known, who
being by me duly sworn did say that they are an Assistant Vice President and an
Assistant Secretary, respectively, of State Street Bank and Trust Company, and
that the seal affixed to the foregoing instrument is the corporate seal of said
Bank, and that the foregoing instrument was signed and sealed by them on behalf
of said Bank by authority of its Board of Directors, and the said Brian J.
Curtis and [Andrew M. Sinasky] acknowledged said instrument to be the free act
and deed of said Bank.
___________________________________________
, Notary Public
My commission expires
(NOTARIAL SEAL)
24
<PAGE>
COMMONWEALTH OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On this ____ day of January, 1997, (i) personally appeared before me, a
Notary Public in and for the County of Suffolk, Gerald R. Wheeler, of 37
Cleveland Road, Waltham, Massachusetts, known to me to be the person described
in and who executed the foregoing instrument, who acknowledged to me that he
executed the same freely and voluntarily and for the uses and purposes therein
mentioned; and (ii) also before me appeared the same Gerald R. Wheeler, to me
personally known, who being by me duly sworn did say that the foregoing
instrument was signed by him as his free act and deed.
_____________________________________
, Notary Public
My commission expires
(NOTARIAL SEAL)
25
<PAGE>
<PAGE>
[LETTERHEAD OF CHOATE, HALL & STEWART]
December 13, 1996
Sierra Pacific Power Company
6100 Neil Road
P.O. Box 10100
Reno, Nevada 89520-0400
Re: Sierra Pacific Power Company - $35,000,000 of
Collateralized Debt Securities
---------------------------------------------
Gentlemen:
This opinion is delivered in connection with a Registration Statement on
Form S-3 (the "Registration Statement") of Sierra Pacific Power Company (the
"Company") relating to the proposed issuance and sale from time to time of
$35,000,000 of Collateralized Debt Securities (the "Debt Securities") in one
or more separate series. The Debt Securities are to be issued pursuant to a
Collateral Trust Indenture dated as of June 1, 1992 (the "Indenture"),
between the Company and Bankers Trust Company, as Trustee (the "Indenture
Trustee"), and to be secured by the Company's first mortgage bonds to be
issued pursuant to an Indenture of Mortgage dated as of December 1, 1940,
from the Company's predecessor to The New England Trust Company and Leo W.
Huegle (State Street Bank and Trust Company and George R. Wheeler,
respectively, by succession), as Trustees, as heretofore supplemented and
modified and assumed by the Company and to be further supplemented by a
Thirty-fifth Supplemental Indenture dated as of January 1, 1997
(collectively, the "Mortgage Indenture").
In connection with rendering this opinion, we have examined such
corporate records, certificates and other documents as we have considered
necessary for the purposes of this opinion. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to the original documents of all
documents submitted to us as copies and the authenticity of the originals of
such latter documents. As to any facts material to our opinion, we have,
when relevant facts
E-1
<PAGE>
were not independently established, relied upon the aforesaid records,
certificates and documents.
As counsel for the Company, we advise you as follows:
The Company is a corporation duly organized and legally existing under
the laws of the State of Nevada.
When the following steps shall have been taken, the Debt
Securities will be valid, legal and binding obligations of the Company:
(a) Issuance of appropriate orders of the Public Service Commission of
Nevada and of the Public Utilities Commission of the State of
California, and compliance by the Company with such orders upon
execution and delivery of the Thirty-fifth Supplemental Indenture and
the issuance and sale of the Debt Securities.
(b) Execution, delivery and recording of the Thirty-fifth Supplemental
Indenture.
(c) Compliance with the Securities Act of 1933, as amended, and the Trust
Indenture Act of 1939, as amended, and action of the Securities and
Exchange Commission permitting the Registration Statement to become
effective.
(d) Execution and filing with the Indenture Trustee of the proper papers
with respect to the Debt Securities of each particular series.
(e) Issuance and sale of the Debt Securities in accordance with the
corporate and governmental authorizations aforesaid and in accordance
with the terms and
E-2
<PAGE>
provisions of the Indenture (including a Fourth Supplemental Indenture
thereto) and the Mortgage Indenture.
Insofar as this opinion relates to matters of law and legal conclusions
governed by the laws of the States of Nevada and California, we base it on
the opinions of Messrs. Woodburn and Wedge of Reno, Nevada and Messrs. Graham
& James LLP of San Francisco, California, respectively, as evidenced by the
opinion of each such firm to be filed with the Registration Statement and the
consent contained in such opinion to the statements made in the Registration
Statement in regard to each such firm.
We hereby consent to be named in the Registration Statement and in any
amendments thereto as counsel for the Company, to the statements with
reference to our firm made in the Registration Statement under the headings
"LEGAL OPINIONS" and "EXPERTS," and to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
CHOATE, HALL & STEWART
309121.2
E-3
<PAGE>
[LETTERHEAD OF WOODBURN & WEDGE]
December 13, 1996
Sierra Pacific Power Company
6100 Neil Road
P.O. Box 10100
Reno, Nevada 89520-0400
Re: Sierra Pacific Power Company - $35,000,000 of Collateralized
Debt Securities; Medium Term Notes, Series "D".
Gentlemen:
This opinion is delivered in connection with a Registration Statement on
Form S-3 (the "Registration Statement") of Sierra Pacific Power Company (the
"Company") relating to the proposed issuance and sale from time to time of up to
$35,000,000 of Collateralized Debt Securities (the "Debt Securities"), in one or
more separate series. The Debt Securities are to be issued pursuant to a
Collateral Trust Indenture dated as of June 1, 1992 (the "Indenture") between
the Company and Bankers Trust Company, as Trustee (the "Indenture Trustee") and
to be secured by the Company's first mortgage bonds to be issued pursuant to an
Indenture of Mortgage dated as of December 1, 1940, from the Company's
predecessor to the New England Trust Company and Leo W. Huegle (State Street
Bank and Trust Company and Gerald R. Wheeler, respectively, by succession), as
Trustees, as heretofore supplemented and modified and assumed by the Company and
to be further supplemented by a Thirty-fifth Supplemental Indenture to be dated
as of January 1, 1997, (collectively, the "Mortgage Indenture"). As counsel for
the Company, we advise you as follows:
We are of the opinion that the Company is a corporation duly organized and
legally existing under the laws of the State of Nevada and is in good standing
under said laws, and that it is legally qualified to hold property and do
business under said laws.
The Public Service Commission of Nevada issued an order on October 19,
1995, Docket No. 95-6034, authorizing the Company to enter into the Thirty-fifth
Supplemental Indenture and to issue and sell the Debt Securities (the "Order").
The Company is authorized under the laws of the State of Nevada to execute the
Fourth Supplemental Indenture to the Indenture and the Thirty-fifth Supplemental
Indenture to the Mortgage Indenture and to issue and sell the Debt Securities
upon the terms of
<PAGE>
Sierra Pacific Power Company
December 13, 1996
Page 2
the Order without any further authorization of any regulatory or governmental
body of the State of Nevada. Insofar as the laws of the State of Nevada and the
Company's properties in the State of Nevada are concerned, when the Thirty-fifth
Supplemental Indenture has been so executed and has been delivered, and properly
recorded and filed and when the Debt Securities have been issued and sold
pursuant to the terms of the Indenture, Mortgage Indenture, the Order, the
Registration Statement and the Distribution Agreement, (a) the Debt Securities
will be valid, legal and binding obligations of the Company in accordance with
their terms and entitled to the security and benefits of the Indenture and the
Mortgage Indenture, (b) the Indenture will be a valid and binding instrument in
accordance with its terms, and (c) the Mortgage Indenture will be a valid and
binding instrument in accordance with its terms, except as to certain property
in Nevada acquired after the filing of the Thirty-fifth Supplemental Indenture
and before the filing of a supplemental indenture specifically subjecting such
property to the lien of the Mortgage Indenture. However, the enforcement of
rights and remedies created by the Debt Securities, the Indenture and the
Mortgage Indenture will be subject to bankruptcy, insolvency, reorganization and
similar laws of general application affecting the rights of remedies of
creditors and with respect to specific performance or injunctive relief to the
discretion of the court before which any proceedings therefor may be brought.
We hereby consent:
1. To being named in the Registration Statement and in any amendments
thereto as counsel for the Company;
2. To the statements with reference to our firm made in the Registration
Statement; and
3. To the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely yours,
WOODBURN and WEDGE
By: /s/ Gordon H. DePaoli
------------------------
Gordon H. DePaoli
<PAGE>
[Letterhead of Graham & James LLP]
December 11, 1996
Sierra Pacific Power Company
6100 Neil Road
P.O. Box 10100
Reno, Nevada 89520-0400
Re: Sierra Pacific Power Company - $35,000,000 of
Collateralized Debt Securities
---------------------------------------------
Gentlemen:
This opinion is delivered in connection with a Registration Statement on Form
S-3 (the "Registration Statement") of Sierra Pacific Power Company (the
"Company") relating to the proposed issuance and sale from time to time of up
to $35,000,000 of Collateralized Debt Securities (the "Debt Securities"), in
one or more separate series. The Debt Securities are to be issued under the
Collateralized Trust Indenture dated as of June 1, 1992 between the Company and
Bankers Trust Company, as Trustee (the "Indenture Trustee") as heretofore
supplemented and modified and to be further supplemented by the Fourth
Supplemental Indenture dated as of January 1, 1997 (collectively, the
"Indenture") and to be secured by the Company's first mortgage bonds to be
issued pursuant to an Indenture of Mortgage dated as of December 1, 1940,
from the Company's predecessor to The New England Trust Company and
Leo W. Huegle (State Street Bank & Trust Company and Gerald R. Wheeler,
respectively, by succession), as Trustees, as heretofore supplemented and
modified and assumed by the Company, and to be further supplemented by a
Thirty-fifth Supplemental Mortgage Indenture dated as of January 1, 1997
(collectively, the "Mortgage Indenture").
In connection with rendering the opinions expressed herein, we have reviewed
the Registration Statement, including the preliminary prospectus (the
"Prospectus"), the Fourth Supplemental Indenture and the Thirty-fifth
Supplemental Mortgage Indenture. In addition, we have examined such corporate
records, certificates and other documents as we have considered necessary for
the purposes of this opinion. In such examination, we have assumed (1) the
genuineness and authenticity of all signatures on all
<PAGE>
Sierra Pacific Power Company
February 13, 1996
Page 2
documents furnished to us, (2) the accuracy of all records furnished to us,
(3) the authenticity of all documents submitted to us as originals, (4) the
conformity to and authenticity of the original documents of all documents
submitted to us as copies, (5) the accuracy, completeness and authenticity of
certificates of public officials and others, (6) the authenticity of all
signatures on all documents furnished to us, the due execution and delivery
pursuant to due authorization thereof by, and the validity and binding effect
thereof on, each party thereto other than the Company, and (7) the
performance by the Company of all of its obligations under the Debt
Securities, the Indenture and the Mortgage Indenture.
We have also relied on representations made in the Registration Statement,
the Indenture and the Mortgage Indenture as to various questions of fact
material to the matters set forth in the opinions expressed below, and we
have not assumed any responsibility for making any independent investigation
or verification of any factual matter stated in or represented by the
Registration Statement, the Debt Securities, the Indenture or the Mortgage
Indenture, or any other factual matter, except to obtain where we deemed
appropriate written representations or certificates of the officers of the
Company or appropriate public officials.
In issuing the opinions expressed herein, we have also assumed (1) that the
total aggregate principal amount of issuances of debt securities and
guaranties, including the Debt Securities, to be issued by the Company
pursuant to the authority granted to it by Decision No. 95-08-045 of the
Public Utilities Commission of the State of California (the "CPUC") will not
exceed One Hundred Fifteen Million Dollars ($115,000,000), and (2) that the
Debt Securities are being issued pursuant to the authority granted to the
Company under CPUC Decision No. 95-08-045.
Based upon the foregoing and subject to the qualifications stated herein, we
are of the opinion that:
1. The Company is qualified under the laws of the State of California to
hold property and to transact an electric public utility business in the
State of California, and is in good standing as a foreign corporation in the
State of California.
2. The CPUC, acting on an application filed by the Company, has issued an
opinion authorizing the Company to issue and sell the Debt Securities
and to enter into the Fourth Supplemental Indenture and
<PAGE>
Sierra Pacific Power Company
February 13, 1996
Page 3
the Thirty-fifth Supplemental Mortgage Indenture as described above. The
Company is therefore authorized under the laws of the State of California
to execute the Indenture and the Thirty-fifth Supplemental Mortgage
Indenture as described above and to issue and sell the Debt Securities
upon such terms without any further authorization of any regulatory or
governmental body of the State of California.
This opinion is limited in all respects to matters governed by the laws of
the State of California, and we have made no inquiry into the laws or
regulations of any jurisdiction or jurisdictions other than the laws of the
State of California.
The opinions expressed herein are rendered solely for your benefit in
connection with the transactions described herein. These opinions may not be
used or relied upon by any other person other than in connection with the law
firm of Choate, Hall & Stewart's issuing a legal opinion as required under
the Prospectus, nor may this letter or any copies thereof be furnished to a
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the heading
"Legal Matters" in the Prospectus. In giving this consent, we do not thereby
admit that we are 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 Commission promulgated thereunder. This opinion is
expressed as of the date hereof unless otherwise expressly stated and we
disclaim any undertaking to advise you of any subsequent changes of the facts
stated or assumed herein or any subsequent changes in applicable law.
Very truly yours,
GRAHAM & JAMES LLP
/s/ GRAHAM & JAMES LLP
<PAGE>
SIERRA PACIFIC POWER COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31, Twelve Months
------------------------------------------------ Ended September 30,
1991 1992 1993 1994 1995 1996
-------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS
- --------
Income After Interest Charges $50,224 $49,843 $57,457 $60,863 $65,983 $77,440
Deferral Mechanism Adjustments (1,2) $0 $1,050 ($409) $2 ($552) ($469)
-------- -------- -------- -------- -------- --------
Adjusted Income $50,224 $50,893 $57,048 $60,865 $65,431 $76,971
Income Taxes, Operating 24,810 26,029 27,499 29,113 37,370 43,696
Income Taxes, Non-Operating (390) (787) 301 751 (231) (967)
Fixed Charges (1,2) 46,095 41,975 43,823 43,493 40,326 41,227
-------- -------- -------- -------- -------- --------
Earnings Available
for Fixed Charges $120,739 $118,110 $128,671 $134,222 $142,896 $160,927
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
FIXED CHARGES
- -------------
Interest on Long-Term Debt (1) $39,331 $37,184 $39,091 $35,193 $35,326 $36,070
Deferral Mechanism Adjustments $0 ($980) $459 $52 $554 $407
-------- -------- -------- -------- -------- --------
Adjusted Interest $39,331 $36,204 $39,550 $35,245 $35,880 $36,477
Amortization of Debt Discount
and Expense, Less Premium 549 680 1,001 1,247 1,225 1,224
Other Interest Expense (2) 3,482 2,528 822 4,588 556 1,344
Deferral Mechanism Adjustments 0 (70) (50) (54) (2) 62
-------- -------- -------- -------- -------- --------
Adjusted Interest 3,482 2,458 772 4,534 554 1,406
Interest Component
of all Rental Charges 2,733 2,633 2,500 2,467 2,667 2,102
-------- -------- -------- -------- -------- --------
Total Fixed Charges $46,095 $41,975 $43,823 $43,493 $40,326 $41,227
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIO OF EARNINGS
TO FIXED CHARGES 2.62 2.81 2.94 3.09 3.54 3.90
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
</TABLE>
(1) Adjusted for the deferral portion of the variable rate interest deferral
mechanism.
(2) Adjusted for the carrying charges on the variable rate interest deferral
mechanism.
<PAGE>
EXHIBIT NO. 15.1
[LETTERHEAD OF COOPERS & LYBRAND L.L.P.]
December 13, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: SIERRA PACIFIC POWER COMPANY
REGISTRATION STATEMENT ON FORM S-3
We are aware that our reports dated April 26, 1996, July 26, 1996, and
October 28, 1996 on our review of the interim financial information of Sierra
Pacific Power Company for the three-month period ended March 31, 1996, three-
and six-month period ended June 30, 1996, and the three- and nine-month
period ended September 30, 1996 and included in the Company's quarterly
report on Form 10-Q is incorporated by reference in the registration
statement on Form S-3 of Sierra Pacific Power Company for the registration of
$35 million of Series D medium-term notes. Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered a part of the
registration statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
Very truly yours,
/s/ Coopers & Lybrand L.L.P.
<PAGE>
EXHIBIT NO. 23.1
[LETTERHEAD OF COOPERS & LYBRAND L.L.P.]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Sierra Pacific Power Company on Form S-3 for the issuance of $35 million of
Sierra Pacific Power Company Series D medium-term notes of our report dated
February 16, 1996, on our audits of the consolidated financial statements of
Sierra Pacific Resources as of December 31, 1995 and 1994, and for each of
the three years in the period ended December 31, 1995. We also consent to the
reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
San Francisco, California
December 13, 1996
