April 10, 2001
Chugach Electric Association, Inc.
5601 Minnesota Drive
Anchorage, Alaska 99518
Re: Chugach Electric Association, Inc. - Registration Statement on Form S-1
with respect to $150,000,000 aggregate principal amount of Debt
Securities
Ladies and Gentlemen:
We have acted as counsel to Chugach Electric Association, Inc., an
Alaska electric cooperative corporation (the "Company"), in connection with the
filing by the Company with the Securities and Exchange Commission (the
"Commission") of a Registration Statement on Form S-1 (the "Registration
Statement") with respect to the issuance of $150,000,000 aggregate principal
amount of the Company's 2001 Series A Bonds (the "Securities"). The Securities
are initially to be issued pursuant to and secured by an Indenture of Trust
dated as of September 15, 1991, between Chugach and Security Pacific Bank
Washington, N.A. (predecessor to the current trustee thereunder), as amended by
the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth and Tenth
Supplemental Indentures thereto (as so amended, the "Indenture"). Capitalized
terms not otherwise defined herein shall have the meanings assigned to them in
the Indenture.
I.
We have assumed the authenticity of all records, documents and
instruments submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
records, documents and instruments submitted to us as copies. We have based our
opinion upon our review of the following records, documents, instruments and
certificates and such additional certificates relating to factual matters as we
have deemed necessary or appropriate for our opinion:
(a) The Registration Statement;
(b) The Indenture, including the form of the Securities;
(c) The Articles of Incorporation (including all amendments
thereto) of the Company certified by the Alaska Department of
Community and Economic Development, Division of Banking,
Securities and Corporations, as of April 5, 2001, and
certified to us by an officer of the Company as being complete
and in full force and effect as of the date of this opinion;
Chugach Electric Association, Inc.
April 10, 2001
Page 2
(d) The Bylaws of the Company (and all amendments thereto)
certified to us by an officer of the Company as being complete
and in full force and effect as of the date of this opinion;
(e) A Certificate of Compliance relating to the Company issued by
the Alaska Department of Community and Economic Development
Division of Banking, Securities and Corporations on March 30,
2001; and
(f) Records certified to us by an officer of the Company as
constituting all records of proceedings and actions of the
board of directors of the Company relating to the transactions
contemplated by the Registration Statement and issuance of the
Securities.
We have also assumed (1) the applicable provisions of the Securities
Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the
"Exchange Act"), the Trust Indenture Act of 1939, as amended, and the securities
or blue sky laws of various states have been complied with, (2) the Indenture
has been duly executed and delivered on behalf of the Company, (3) the
Securities will be duly executed by the Company and authenticated by the Trustee
in accordance with the terms of the Indenture and (4) the Securities will be
delivered and paid for as contemplated by the Registration Statement.
II.
We express no opinion as to:
A. The applicable choice of law rules that may affect the
interpretation or enforcement of the Indenture or the Securities.
B. Any tax, anti-trust, land use, safety, environmental or hazardous
materials laws, rules or regulations.
C. The enforceability of any liquidated damages provision contained in
the Indenture or the Securities.
D. The right of a lender or indenture trustee to take possession of the
collateral without having a receiver appointed, or entitlement to appointment of
a receiver, as Alaska Statutes ("AS") Section 09.40.240 specifies statutory
prerequisites to such an appointment.
F. The enforceability of any provision of the Indenture which purports
to waive the right to benefit from the doctrine of marshalling of assets upon
foreclosure.
G. The enforceability of any provision of the Indenture which purports
to create a "springing lien" whereby certain property initially excepted from
the lien of the Indenture would become subject to the lien of the Indenture upon
the occurrence of an Event of Default.
Chugach Electric Association, Inc.
April 10, 2001
Page 3
H. The enforceability of any provision of the Indenture to the extent
any such provision or the enforcement thereof conflict with AS Chapter 34.20,
which contains certain provisions with respect to the foreclosure of mortgages
and deeds of trust in Alaska, which provisions relate to and specify the
procedures for the sale of encumbered real property, the curing of defaults, the
application of proceeds and related matters.
Without limiting the effect of the assumptions and qualifications
stated above, we advise you that our opinion set forth in Part III is further
limited as follows:
(i) Rule 82 of the Alaska Rules of Civil Procedure may limit or
otherwise affect the enforceability of any provisions in the Indenture or the
Securities with respect to recovery of attorneys' fees.
(ii) The right of the Trustee to pursue multiple remedies is limited by
AS 09.45.200, which generally prohibits an action for the foreclosure of a lien
during or after the pendency of an action for the recovery of a debt secured by
such lien.
(iii) The right to obtain a deficiency judgment is limited by AS
34.20.100, which provides that, following a nonjudicial foreclosure, no other or
further action or proceeding may be taken nor judgment entered against the maker
on the obligation secured by the deed of trust for a deficiency.
(iv) The enforceability of the Securities may further be limited by
provisions of Alaska law (a) limiting the right of any party to enforce its
rights under the Securities if that party proceeds in a manner which would be
deemed commercially unreasonable or seeks to invoke penalties of defaults which
bear no reasonable relation to the damage suffered or would otherwise work a
forfeiture, and (b) limiting, on public policy grounds, the effectiveness of
general indemnities or waivers of the benefits of statutory provisions or
judicially created rights.
(v) There may be statutory and other legal requirements applicable to a
lender or indenture trustee exercising any remedies upon the occurrence of a
default or in the foreclosure of any security under the Indenture, but those
legal requirements should not make the remedies under the Indenture, taken as a
whole, inadequate for the practical realization of the security and benefits
provided by the Indenture.
This opinion is limited to the federal laws of the United States of
America and the laws of the State of Alaska, and we disclaim any opinion as to
the laws of any other jurisdiction. We further disclaim any opinion as to any
statute, rule, regulation, ordinance, order or other promulgation of any
regional or local governmental body or as to any related judicial or
administrative opinion.
Chugach Electric Association, Inc.
April 10, 2001
Page 4
III.
Based upon the foregoing and our examination of such questions of law
as we have deemed necessary or appropriate for the purpose of our opinion, and
subject to the limitations and qualifications expressed above and below, it is
our opinion that:
The Securities constitute the valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
subject, as to enforcement, (i) to bankruptcy, insolvency, fraudulent
conveyance, reorganization, arrangement, moratorium and other similar laws
affecting creditors' rights and remedies, and (ii) to general principles of
equity, whether such enforceability is considered in a proceeding in equity or
at law.
IV.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Opinions" in the prospectus constituting a part of the Registration
Statement.
V.
This opinion is rendered to you in connection with the filing of the
Registration Statement and is solely for your benefit and for the benefit of the
holders of the Securities. This opinion may not be relied upon by any other
person, firm, corporation or other entity without our prior written consent. We
disclaim any obligation to advise you of any change of law that occurs, or any
facts of which we become aware, after the date of this opinion.
Very truly yours,
/s/ Heller Ehrman White & McAuliffe LLP
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