Exhibit 4.1
NEVADA POWER COMPANY
OFFICER'S CERTIFICATE
October 29, 2002
I, the undersigned officer of Nevada Power Company (the "Company"), do
hereby certify that I am an Authorized Officer of the Company as such term is
defined in the Indenture (as defined herein). I am delivering this certificate
pursuant to the authority granted in the Board Resolutions of the Company dated
September 10, 2002, and Sections 1.04, 2.01, 3.01, 4.01(a) and 4.02(b)(i) of the
General and Refunding Mortgage Indenture dated as of May 1, 2001, as heretofore
amended and supplemented to the date hereof (as heretofore amended and
supplemented, the "Indenture"), between the Company and The Bank of New York, as
Trustee (the "Trustee"). Section 1(u)(xviii) of this Officer's Certificate sets
forth definitions of capitalized terms used herein. Terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture. Regarding the use of the terms "subordinated" and "pari passu"
herein, see Section 1(u)(i)(D). Based upon the foregoing, I hereby certify on
behalf of the Company as follows:
1. The terms and conditions of the Securities described in this
Officer's Certificate are as follows (the lettered subdivisions set forth in
this Paragraph 1 corresponding to the lettered subdivisions of Section 3.01 of
the Indenture):
(a) The Securities of the fifth series to be issued under the Indenture
shall be designated "10 7/8% General and Refunding Mortgage Notes,
Series E, due 2009" (the "Series E Notes").
(b) There shall be no limit upon the aggregate principal amount of the
Series E Notes that may be authenticated and delivered under the
Indenture. The Series E Notes shall be initially authenticated and
delivered in the aggregate principal amount of $250,000,000.
(c) Interest on the Series E Notes shall be payable to the Persons in
whose names such Securities are registered at the close of business on
the Regular Record Date for such interest, except as otherwise
expressly provided in the form of such Securities attached hereto as
Exhibit A.
(d) The Series E Notes shall mature and the principal thereof shall be
due and payable together with all accrued and unpaid interest thereon
on October 15, 2009.
(e) The Series E Notes shall bear interest as provided in the form of
such Securities attached hereto as Exhibit A.
(f) If a Holder of Series E Notes has given wire transfer instructions
to the Company and the Paying Agent prior to the fifth day preceding
the related record date (or, in the case of principal or premium, the
fifth day preceding the date such principal or premium is due), the
Company shall pay all principal, interest and premium and Liquidated
Damages (as such term is defined herein), if any, on that Holder's
Series E Notes in accordance with such instructions. The Corporate
Trust Office of The Bank of New York in New York, New York shall be the
place at which (i) the principal, interest and premium and Liquidated
Damages, if any, on the Series E Notes shall be payable (other than
payments made in accordance with the first sentence of this paragraph
(f)), (ii) registration of transfer of the Series E Notes may be
effected, (iii) exchanges of the Series E Notes may be effected and
(iv) notices and demands to or upon the Company in respect of the
Series E Notes and the Indenture may be served; and The Bank of New
York shall be the Security Registrar for the Series E Notes; provided,
however, that the Company reserves the right to change, by one or more
Officer's Certificates, any such place or the Security Registrar; and
provided, further, that the Company reserves the right to designate, by
one or more Officer's Certificates, its principal office in Las Vegas,
Nevada as any such place or itself as the Security Registrar; provided,
however, that there shall be only a single Security Registrar for the
Series E Notes.
(g) Optional Redemption.
(i) Optional Redemption. Except as set forth in clause (ii) of
this Section 1(g), the Series E Notes shall not be redeemable at the
Company's option prior to October 15, 2006. On and after October 15,
2006, the Company may redeem all or a part of the Series E Notes upon
not less than 30 nor more than 60 days' notice, at the Redemption
Prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, on the
Series E Notes redeemed, to the applicable Redemption Date, if redeemed
during the twelve-month period beginning on October 15 of the years
indicated below:
Year Percentage
- ---- ----------
2006 105.438%
2007 102.719%
2008 and thereafter 100.000%
(ii) Equity Claw-back. Notwithstanding the foregoing, at any
time prior to October 15, 2005, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of the
Series E Notes at a Redemption Price of 110.875% of the principal
amount, plus accrued and unpaid interest and Liquidated Damages, if
any, to the Redemption Date, with the net cash proceeds of any public
or private offering of its Equity Interests (other than Disqualified
Stock) or a capital contribution to the Company's equity made with net
cash proceeds of an offering by Sierra Pacific Resources, provided that
at least 65% of the aggregate principal amount of Series E Notes
remains outstanding immediately after the occurrence of such redemption
(excluding Series E Notes held by the Company and its Subsidiaries);
and provided further, that any such redemption shall occur within 120
days of the date of the closing of such offering.
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(iii) Notice of Redemption. Notices of redemption shall be
mailed by first class mail at least 30 but not more than 60 days before
the Redemption Date to each Holder of Series E Notes to be redeemed at
its registered address, except that redemption notices may be mailed
more than 60 days prior to a Redemption Date if the notice is issued in
connection with a defeasance of the Series E Notes or a satisfaction
and discharge of the Series E Notes under the Indenture. Notices of
redemption may not be conditional.
(iv) Selection of Series E Notes to be Redeemed. In accordance
with Section 5.03 of the Indenture, the following method is provided
for the selection of Series E Notes to be redeemed and these procedures
shall be followed by the Security Registrar in the event of a
redemption of the Series E Notes pursuant to the provisions of this
Officer's Certificate. If less than all of the Series E Notes are to be
redeemed at any time, the Security Registrar shall select Series E
Notes for redemption as follows:
(A) if the Series E Notes are listed on any national
securities exchange, in compliance with the
requirements of the principal national securities
exchange on which the Series E Notes are listed; or
(B) if the Series E Notes are not listed on any national
securities exchange, on a pro rata basis, by lot or by
such method as the Trustee deems fair and appropriate.
No Series E Notes of $1,000 principal amount or less can be
redeemed in part.
(h) Mandatory Redemption/Redemption at Option of Holders/Offers to
Purchase.
(i) Mandatory Redemption.
(A) Except as provided in Section 1(h)(i)(B) below or Section
1(h)(ii) below, the Company is not required to make mandatory
redemption or sinking fund payments with respect to the Series E Notes.
(B) Upon the occurrence of the events described below in
clauses (1) or (2) of this Section 1(h)(i)(B), the Company shall be
required to redeem the Series E Notes immediately, at a Redemption
Price equal to 100% of the aggregate principal amount of the Series E
Notes plus accrued and unpaid interest and Liquidated Damages, if any,
on the Series E Notes to the date of redemption, without further action
or notice on the part of the Trustee or the Holders of the Series E
Notes:
(1) the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(I) commences a voluntary case,
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(II) consents to the entry of an order for
relief against it in an involuntary case,
(III) consents to the appointment of a custodian
of it or for all or substantially all of
its property,
(IV) makes a general assignment for the benefit
of its creditors, or
(V) admits in writing of its inability to pay
its debts generally as they become due; or
(2) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(I) is for relief against the Company or any of
its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a
Significant Subsidiary in an involuntary
case;
(II) appoints a custodian of the Company or any
of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries
that, taken as a whole, would constitute a
Significant Subsidiary or for all or
substantially all of the property of the
Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; or
(III) orders the liquidation of the Company or any
of its Subsidiaries that is a Significant
Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in
effect for 60 consecutive days.
(ii) Redemption at the Option of the Holders.
(A) Upon the occurrence of any of the following events (each a
"Triggering Event"):
(1) failure for 30 days to pay when due interest on, or
Liquidated Damages with respect to, the Series E
Notes;
(2) failure to pay when due the principal of, or premium,
if any, on the Series E Notes;
(3) failure by the Company or any of its Restricted
Subsidiaries to comply with the provisions described
in Sections 1(u)(i), 1(u)(ii) or 1(u)(vi) of this
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Officer's Certificate (under the headings "Certain
Covenants and Definitions--Restricted Payments,"
"Certain Covenants and Definitions--Incurrence of
Indebtedness and Issuance of Preferred Stock" or
"Certain Covenants and Definitions--Merger,
Consolidation or Sale of Assets");
(4) failure by the Company or any of its Restricted
Subsidiaries for 30 days after notice to comply with
the provisions described in Section 1(h)(iii) or (iv)
of this Officer's Certificate (under the headings
"Offer to Purchase Upon Change of Control" or "Offer
to Purchase by Application of Excess Proceeds");
(5) failure by the Company or any of its Restricted
Subsidiaries for 60 days after notice to comply with
any of the other agreements in this Officer's
Certificate or the Series E Notes;
(6) default under any mortgage, indenture or instrument
under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or
is created after the original issue date of the Series
E Notes, if that default:
(I) is caused by a failure to pay principal of,
or interest or premium, if any, on such
Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on
the date of such default (a "Payment
Default"); or
(II) results in the acceleration of such
Indebtedness prior to its express maturity,
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so
accelerated, aggregates $15.0 million or more;
(7) failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of $15.0
million, which judgments are not paid, discharged or
stayed for a period of 60 days; or
(8) an event of default under the First Mortgage Indenture
(other than any such matured event of default which
(i) is of similar kind or character to the Triggering
Event described in (3) or (5) above and (ii) has not
resulted in the acceleration of the securities
outstanding under the First Mortgage Indenture);
provided, however, that, anything in this Officer's
Certificate to the contrary notwithstanding, the
waiver or cure of such event of default under the
First Mortgage Indenture and the rescission and
annulment of the consequences thereof under the First
Mortgage Indenture shall
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constitute a cure of the corresponding Triggering
Event and a rescission and annulment of the
consequences thereof,
the Holders of Series E Notes of at least 25% in principal amount of
the Series E Notes then Outstanding may deliver a notice to the Company
requiring the Company to redeem the Series E Notes immediately at a
Redemption Price equal to 100% of the aggregate principal amount of the
Series E Notes plus accrued and unpaid interest and Liquidated Damages,
if any, on the Series E Notes to the Redemption Date.
(B) The Holders of a majority in aggregate principal amount of
the Series E Notes then outstanding by notice to the Company and the
Trustee may on behalf of the Holders of all of the Series E Notes waive
any existing Triggering Event and its consequences except a continuing
Triggering Event related to the payment of interest or Liquidated
Damages on, or the principal of, the Series E Notes.
(C) In the case of any Triggering Event occurring on or after
October 15, 2006 by reason of any willful action or inaction taken or
not taken by or on behalf of the Company with the intention of avoiding
payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Series E Notes pursuant to the
provisions of Section 1(g)(i) of this Officer's Certificate relating to
redemption at the option of the Company, an equivalent premium shall
also become and be immediately due and payable to the extent permitted
by law upon the redemption of the Series E Notes at the option of the
Holders thereof. If a Triggering Event occurs prior to October 15,
2006, by reason of any willful action or inaction taken or not taken by
or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Series E Notes prior to October 15,
2006, then the premium specified in Section 1(g)(i) of this Officer's
Certificate shall also become immediately due and payable to the extent
permitted by law upon the redemption of the Series E Notes at the
option of the Holders thereof.
(D) Upon becoming aware of any Triggering Event, the Company
shall deliver to the Trustee a statement specifying such Triggering
Event.
(iii) Offer to Purchase Upon Change of Control.
(A) Upon the occurrence of a Change of Control, each Holder of
Series E Notes shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple of
$1,000) of that Holder's Series E Notes pursuant to the offer described
below (the "Change of Control Offer") on the terms set forth in this
Officer's Certificate. In the Change of Control Offer, the Company
shall offer an amount in cash (the "Change of Control Payment") equal
to 101% of the aggregate principal amount of Series E Notes repurchased
plus accrued and unpaid interest and Liquidated Damages, if any, on the
Series E Notes repurchased, to Change of Control Payment Date (as
defined below).
(B) Within ten days following any Change of Control, the
Company shall mail a notice to each Holder of Series E Notes stating:
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(1) the description of the transaction or transactions
that constitute the Change of Control, that the Change
of Control Offer is being made pursuant to this
Section 1(h)(iii), and that all Series E Notes validly
tendered and not withdrawn shall be accepted for
payment;
(2) the purchase price and the purchase date, which shall
be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of
Control Payment Date");
(3) that any Series E Note not tendered or accepted for
payment shall continue to accrue interest and
Liquidated Damages, if any;
(4) that, unless the Company defaults in the payment of
the Change of Control Payment, all Series E Notes
accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest and Liquidated
Damages, if any, after the Change of Control Payment
Date;
(5) that Holders of Series E Notes electing to have any
Series E Notes purchased pursuant to a Change of
Control Offer shall be required to surrender the
Series E Notes properly endorsed, with the form
entitled "Option of Holder to Elect Purchase" on the
reverse of the Series E Notes properly completed,
together with other customary documents as the Company
may reasonably request, to the Paying Agent at the
address specified in the notice prior to the close of
business on the third Business Day preceding the
Change of Control Payment Date;
(6) that Holders of Series E Notes shall be entitled to
withdraw their election if the Paying Agent receives,
not later than the close of business on the second
Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the
principal amount of Series E Notes delivered for
purchase, and a statement that such Holder of Series E
Notes is withdrawing its election to have the Series E
Notes purchased; and
(7) that Holders of Series E Notes whose Series E Notes
are being purchased only in part shall be issued new
Series E Notes equal in principal amount to the
unpurchased portion of the Series E Notes surrendered,
which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
(C) If any of the Series E Notes subject to a Change of
Control Offer are in the form of a Global Note, then the Company shall
modify such notice to the extent necessary to accord with the
Applicable Procedures of the Depositary applicable to offers to
purchase.
(D) On the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment all Series E Notes or
portions thereof properly tendered pursuant to the Change of Control
Offer, (2) deposit with the Paying Agent in
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immediately available funds an amount equal to the Change of Control
Payment in respect of all Series E Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the Trustee the
Series E Notes so accepted together with an Officer's Certificate
stating the aggregate principal amount of Series E Notes or portions
thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Series E Notes so tendered the Change
of Control Payment for such Series E Notes, and the Trustee shall
promptly authenticate and make available for delivery to each Holder
of Series E Notes a new Series E Note equal in principal amount to any
unpurchased portion of the Series E Notes surrendered, if any;
provided that each such new Series E Note shall be in a principal
amount of $1,000 or an integral multiple thereof. Any Series E Note
not so accepted shall be promptly mailed or delivered by the Company
to the Holder thereof. The Company shall publicly announce the results
of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(E) The Change of Control provisions described above that
require the Company to make a Change of Control Offer following a
Change of Control shall be applicable whether or not any other
provisions of this Officer's Certificate are applicable.
(F) The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth herein applicable to a
Change of Control Offer made by the Company and purchases all Series E
Notes validly tendered and not withdrawn under such Change of Control
Offer.
(iv) Offer to Purchase by Application of Excess Proceeds.
(A) In the event that, pursuant to Section 1(u)(v)(D) of this
Officer's Certificate (under the heading "Certain Covenants and
Definitions--Asset Sales"), the Company shall be required to commence
an Asset Sale Offer, it shall make an offer (an "Asset Sale Offer") to
all Holders of Series E Notes, and all holders of other Indebtedness
that is pari passu with the Series E Notes containing provisions
similar to those set forth in this Officer's Certificate with respect
to offers to purchase or redeem with the proceeds of sales of assets,
to purchase the maximum principal amount of the Series E Notes and
such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer shall be
equal to 100% of principal amount plus accrued and unpaid interest and
Liquidated Damages, if any, to the date of purchase, and shall be
payable in cash. If any Excess Proceeds remain after consummation of
an Asset Sale Offer, the Company may use those Excess Proceeds for any
purpose not otherwise prohibited by this Officer's Certificate. If the
aggregate principal amount of Series E Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee shall select the Series E Notes and such
other pari passu Indebtedness to be purchased on a pro rata basis. The
Company shall advise the Trustee of such other pari passu Indebtedness
and the Trustee shall have no duty or responsibility to determine the
accuracy or correctness of such advice and shall be fully protected in
relying on such advice. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
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(B) Any Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the "Offer
Period"). No later than five Business Days after the termination of
the Offer Period (the "Purchase Date"), the Company shall purchase the
principal amount of Series E Notes required to be purchased pursuant
to paragraph (A) above (the "Offer Amount") or, if less than the Offer
Amount has been tendered, all Series E Notes validly tendered in
response to the Asset Sale Offer.
(C) Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to each of the Holders of
Series E Notes, with a copy to the Trustee, stating:
(1) that the Asset Sale Offer is being made pursuant to
this Section 1(h)(iv) and Section 1(u)(v) of this
Officer's Certificate (under the heading "Certain
Covenants and Definitions--Asset Sales") and the
length of time the Asset Sale Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Series E Note not tendered or accepted for
payment shall continue to accrue interest and
Liquidated Damages, if any;
(4) that, unless the Company defaults in making such
payment, any Series E Note accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue
interest and Liquidated Damages, if any, after the
Purchase Date;
(5) that Holders of Series E Notes electing to have a
Series E Note purchased pursuant to any Asset Sale
Offer shall be required to surrender the Series E
Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Series E Note
properly completed, together with other customary
documents as the Company may reasonably request, to
the Paying Agent at the address specified in the
notice prior to the close of business on the third
Business Day preceding the Purchase Date;
(6) that Holders of Series E Notes shall be entitled to
withdraw their election if the Paying Agent receives,
not later than the close of business on the second
Business Day preceding the Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Series
E Notes delivered for purchase, and a statement that
such Holder of Series E Notes is withdrawing its
election to have the Series E Notes purchased;
(7) that, if the aggregate principal amount of Series E
Notes surrendered by Holders of Series E Notes exceeds
the Offer Amount, the Trustee shall select the Series
E Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the
Trustee so that only Series E Notes in denominations
of $1,000, or integral multiples thereof, shall be
purchased); and
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(8) that Holders of Series E Notes whose Series E Notes
are being purchased only in part shall be issued new
Series E Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
(D) If any of the Series E Notes subject to an Asset Sale
Offer is in the form of a Global Note, then the Company shall modify
such notice to the extent necessary to accord with the Applicable
Procedures of the Depositary applicable to offers to purchase.
(E) On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Series E Notes or portions thereof
tendered pursuant to the Asset Sale Offer, or if less than the Offer
Amount has been tendered, all Series E Notes tendered, and shall
deliver to the Trustee an officer's certificate stating that such
Series E Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 1(h)(iv). The
Paying Agent shall promptly (but in any case not later than five days
after the Purchase Date) mail or deliver to each tendering Holder of
Series E Notes an amount equal to the purchase price of the Series E
Notes tendered by such Holder of Series E Notes and accepted by the
Company for purchase, and the Company shall promptly issue a new Series
E Note, and the Trustee, upon written request from the Company, shall
authenticate and make available for delivery such new Series E Note to
such Holder of Series E Notes, in a principal amount equal to any
unpurchased portion of the Series E Note surrendered; provided that
each such new Series E Note shall be in a principal amount of $1,000 or
an integral multiple thereof. Any Series E Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof.
The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
(F) The provisions of this Section 1(h)(iv)("Offer to Purchase
by Application of Excess Proceeds") is subject to the provisions of
Section 1(u)(xiv)("Certain Covenants and Definitions--Suspension of
Certain Covenants").
(v) Offers to Purchase - General.
(A) If the Change of Control Payment Date or Purchase Date is
on or after a Regular Record Date and on or before the related Interest
Payment Date, any accrued and unpaid interest and Liquidated Damages,
if any, shall be paid to the Person in whose name a Series E Note is
registered at the close of business on such Regular Record Date, and no
additional interest or Liquidated Damages shall be payable to Holders
of Series E Notes who tender Series E Notes pursuant to the Change of
Control Offer or the Asset Sale Offer.
(B) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent those laws and regulations are
applicable in connection with a Change of Control Offer or an Asset
Sale Offer. To the extent that the provisions of any securities laws or
regulations
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conflict with the Change of Control Offer or Asset Sale Offer
provisions of this Officer's Certificate, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed
to have breached its obligations under the Change of Control Offer or
Asset Sale Offer provisions of this Officer's Certificate by virtue of
such conflict.
(i) The Series E Notes are issuable only in denominations of $1,000 and
integral multiples of $1,000 in excess thereof.
(j) Not applicable.
(k) Not applicable.
(l) Not applicable.
(m) See subsection (e) above.
(n) Not applicable.
(o) Not applicable.
(p) Not applicable.
(q) Book-entry; Delivery and Form.
(i) Form and Dating.
The Series E Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto.
The Series E Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Series E Note shall be dated
the date of its authentication. The Series E Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Series E Notes shall
constitute, and are hereby expressly made, a part of this Officer's
Certificate, and the Company, by its execution and delivery of this
Officer's Certificate, expressly agrees to such terms and provisions
and to be bound thereby. However, to the extent any provision of any
Series E Note conflicts with the express provisions of this Officer's
Certificate or the Indenture, the provisions of this Officer's
Certificate or the Indenture, as applicable, shall govern and be
controlling.
Series E Notes issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend
and the "Schedule of Exchanges in the Global Note" attached thereto).
Series E Notes issued in definitive form shall be substantially in the
form of Exhibit A attached hereto (but without the Global Note Legend
and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such aggregate
principal amount of the outstanding Series E Notes as shall be
specified therein and each shall provide that it
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shall represent the aggregate principal amount of outstanding Series E
Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Series E Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal
amount of outstanding Series E Notes represented thereby shall be made
by the Trustee, the Depositary or the Note Custodian, at the direction
of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 1(q)(v) of this Officer's Certificate.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the
"General Terms and Conditions of Clearstream Bank" and "Customer
Handbook" of Clearstream shall be applicable to transfers of beneficial
interests in the Regulation S Global Notes that are held by members of,
or Participants, in DTC through Euroclear or Clearstream.
(ii) Authentication.
The Trustee or an Authenticating Agent shall authenticate by
delivery and execution of a Trustee's Certificate of Authentication in
the form set forth in Section 2.02 of the Indenture (A) the Series E
Notes for original issue on the Issue Date in the aggregate principal
amount of $250,000,000 (the "Original Notes"), (B) additional Series E
Notes for original issue from time to time after the Issue Date in such
principal amounts as may be set forth in a Company Order (such
additional Series E Notes, together with the Original Notes, the
"Initial Notes") and (C) any Exchange Notes from time to time for issue
only in exchange for a like principal amount of Initial Notes, in each
case, upon a Company Order, which Company Order shall specify (x) the
amount of Series E Notes to be authenticated and the date of original
issue thereof, (y) whether the Series E Notes are Initial Notes or
Exchange Notes and (z) the amount of Series E Notes to be issued in
global form or definitive form. The aggregate principal amount of
Series E Notes outstanding at any time may not exceed $250,000,000 plus
such additional principal amounts as may be issued and authenticated
pursuant to clause (B) of this paragraph, except as provided in Section
1(q)(vii) of this Officer's Certificate.
(iii) Security Registrar, Paying Agent and Depositary.
The Company initially appoints the Trustee to act as the
Security Registrar and Paying Agent for the Series E Notes. Upon the
occurrence of a Triggering Event set forth under Sections 1(h)(i)(B)(1)
or 1(h)(i)(B)(2) herein or an Event of Default set forth in Sections
10.01(d) or 10.01(e) of the Indenture, the Trustee shall serve as
Paying Agent for the Series E Notes. The Company shall maintain a Place
of Payment for the Series E Notes within the City and State of New York
pursuant to Section 6.02 of the Indenture.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes. The
Trustee has been appointed by DTC to act as Note Custodian with
respect to the Global Notes.
(iv) Liquidated Damages, if any, to be Held in Trust.
12
Payments of Liquidated Damages, if any, shall be subject to
the provisions of Section 6.03 of the Indenture to the same extent as
any payments of principal of or premium or interest on the Series E
Notes.
(v) Transfer and Exchange.
(A) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of
the Depositary, by a nominee of the Depositary to the Depositary or to
another nominee of the Depositary, or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes shall be exchanged by the Company for
Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue
to act as Depositary for the Global Notes or that it
is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 90
days after the date of such notice from the Depositary
or
(2) the Company in its sole discretion notifies the
Trustee in writing that it elects to cause issuance of
the Series E Notes in certificated form.
Upon the occurrence of either of the preceding events in (1)
or (2) above, Definitive Notes shall be issued in such names
as the Depositary shall instruct the Trustee. Global Notes
also may be exchanged or replaced, in whole or in part, as
provided in Sections 3.06 and 3.09 of the Indenture. Every
Series E Note authenticated and delivered in exchange for, or
in lieu of, a Global Note or any portion thereof, pursuant to
Sections 3.06 and 3.09 of the Indenture, shall be
authenticated and delivered in the form of, and shall be, a
Global Note. A Global Note may not be exchanged for another
Series E Note other than as provided in this Section
1(q)(v)(A), however, beneficial interests in a Global Note may
be transferred and exchanged as provided in Section
1(q)(v)(B), (C) or (F) of this Officer's Certificate.
(B) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the
Global Notes shall be effected through the Depositary, in accordance
with the provisions of this Officer's Certificate and the Applicable
Procedures. Beneficial interests in the Restricted Global Notes shall
be subject to restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance
with either subparagraph (1) or (2) below, as applicable, as well as
one or more of the other following subparagraphs as applicable:
(1) Transfer of Beneficial Interests in the
Same Global Note. Beneficial interests in any Restricted
Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same
13
Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the
Restricted Period transfers of beneficial interests in the
Regulation S Global Note may not be made to a U.S. Person or
for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Beneficial interests in any Unrestricted
Global Note may be transferred only to Persons who take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions
shall be required to be delivered to the Security Registrar to
effect the transfers described in this Section 1(q)(v)(B)(1).
(2) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers
and exchanges of beneficial interests (other than a transfer
of a beneficial interest in a Global Note to a Person who
takes delivery thereof in the form of a beneficial interest in
the same Global Note), the transferor of such beneficial
interest must deliver to the Security Registrar either:
(a) both (i) a written order from a
Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause
to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to
be transferred or exchanged and (ii) instructions
given in accordance with the Applicable Procedures
containing information regarding the Participant
account to be credited with such increase or
(b) both (i) a written order from a
Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and
(ii) instructions given by the Depositary to the
Security Registrar containing information regarding
the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred
to in (i) above.
Upon an Exchange Offer by the Company in accordance with
Section 1(q)(v)(F) of this Officer's Certificate, the
requirements of this Section 1(q)(v)(B)(2) shall be deemed to
have been satisfied upon receipt by the Security Registrar of
the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon notification from the Security
Registrar that all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in
this Officer's Certificate, the Series E Notes and otherwise
applicable under the Securities Act have been satisfied, the
Trustee shall adjust the principal amount of the relevant
Global Notes pursuant to Section 1(q)(v)(H) of this Officer's
Certificate.
14
(3) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any
Restricted Global Note may be transferred to a Person who
takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with
the requirements of clause (2) above and the Security
Registrar receives the following:
(a) if the transferee shall take delivery in
the form of a beneficial interest in the Rule 144A
Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including
the certifications in Item (1) thereof; or
(b) if the transferee shall take delivery in
the form of a beneficial interest in the Regulation S
Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including
the certifications in Item (2) thereof.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the
Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof
for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the
exchange or transfer complies with the requirements of clause
(2) above and:
(a) such exchange or transfer is effected
pursuant to an Exchange Offer in accordance with the
Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a
transfer, is not (i) a broker-dealer, (ii) a Person
participating in the distribution of the Exchange
Notes or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(b) any such transfer is effected pursuant
to a Shelf Registration Statement in accordance with
the Registration Rights Agreement;
(c) any such transfer is effected by a
Broker-Dealer pursuant to an Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(d) the Security Registrar receives the
following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a certificate
from such holder in the form of Exhibit C hereto, including the
certifications in Item (1)(a) thereof; or
15
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest to
a Person who shall take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note, a certificate from such holder
in the form of Exhibit B hereto, including the certifications in Item
(4) thereof;
and, in each such case set forth in this subparagraph (d), an Opinion
of Counsel in form reasonably acceptable to the Company to the effect
that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (b)
or (d) above at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 1(q)(ii) of this
Officer's Certificate, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to
subparagraph (b) or (d) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in
the form of, a beneficial interest in a Restricted Global Note.
(C) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in
the form of a Definitive Note, then, upon receipt by the
Security Registrar of the following documentation:
(a) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the
certifications in Item (2)(a) thereof;
(b) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in Item (1) thereof;
(c) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in Item (2) thereof;
(d) if such beneficial interest is being
transferred pursuant to an exemption from the
registration requirements of the Securities Act in
16
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in Item (3)(a)
thereof;
(e) if such beneficial interest is being
transferred to an Institutional Accredited Investor
or in reliance on any other exemption from the
registration requirements of the Securities Act, in
either case other than those listed in subparagraphs
(b) through (d) above, then the transferor must
deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates
and any Opinion of Counsel required by Item (3)
thereof, if applicable;
(f) if such beneficial interest is being
transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
Item (3)(b) thereof; or
(g) if such beneficial interest is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including
the certifications in Item (3)(c) thereof,
the Trustee, upon notice of receipt of such documentation by the
Security Registrar, shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
1(q)(v)(H) of this Officer's Certificate, and the Company shall execute
and the Trustee shall authenticate and make available for delivery to
the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 1(q)(v)(C) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Security Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall make available for delivery such
Definitive Notes to the Persons in whose names such Series E Notes are
so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section
1(q)(v)(C)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
Notwithstanding Sections 1(q)(v)(C)(1)(a) and (c) hereof, a
beneficial interest in the Regulation S Global Note may not be (a)
exchanged for a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Security Registrar of any
certificates required pursuant to Rule 903(c)(3)(B) under the
Securities Act or (b) transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to the conditions set
forth in clause (a) above or unless the transfer is pursuant to an
exemption from the registration requirements of the Securities Act
other than Rule 903 or Rule 904.
(2) Beneficial Interests in Restricted Global
Notes to Unrestricted Definitive Notes. Notwithstanding
Section 1(q)(v)(C)(1) hereof, a holder of a
17
beneficial interest in a Restricted Global Note may exchange
such beneficial interest for an Unrestricted Definitive Note
or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive
Note only if:
(a) such exchange or transfer is effected
pursuant to an Exchange Offer in accordance with the
Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or
the transferee, in the case of a transfer, is not (i)
a broker-dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person
who is an affiliate (as defined in Rule 144) of the
Company;
(b) any such transfer is effected pursuant
to a Shelf Registration Statement in accordance with
the Registration Rights Agreement;
(c) any such transfer is effected by a
Broker- Dealer pursuant to an Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(d) the Security Registrar receives the
following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit C hereto,
including the certifications in Item (1)(b) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest to
a Person who shall take delivery thereof in the form of a Definitive
Note that does not bear the Private Placement Legend, a certificate
from such holder in the form of Exhibit B hereto, including the
certifications in Item (4) thereof;
and, in each such case set forth in this subparagraph (d), an Opinion
of Counsel in form reasonably acceptable to the Company, to the effect
that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes
to Unrestricted Definitive Notes. If any holder of a
beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon
notice by the Security Registrar of satisfaction of the
conditions set forth in Section 1(q)(v)(B)(2) of this
Officer's Certificate, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 1(q)(v)(H) of this Officer's
Certificate, and the Company shall execute and the Trustee
shall authenticate and
18
make available for delivery to the Person designated in the
instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 1(q)(v)(C)(3)
shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Security Registrar
through instructions from the Depositary and the Participant
or Indirect Participant. The Trustee shall make available for
delivery such Definitive Notes to the Persons in whose names
such Series E Notes are so registered. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this
Section 1(q)(v)(C)(3) shall not bear the Private Placement
Legend. A beneficial interest in an Unrestricted Global Note
cannot be exchanged for a Definitive Note bearing the Private
Placement Legend or transferred to a Person who takes delivery
thereof in the form of a Definitive Note bearing the Private
Placement Legend.
(D) Transfer and Exchange of Definitive Notes for
Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial
Interests in Restricted Global Notes. If any Holder of a
Restricted Definitive Note proposes to exchange such Series E
Note for a beneficial interest in a Restricted Global Note or
to transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Security
Registrar of the following documentation:
(a) if the Holder of such Restricted
Definitive Note proposes to exchange such Series E
Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in Item
(2)(b) thereof;
(b) if such Definitive Note is being
transferred to a QIB in accordance with Rule 144A
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in Item (1) thereof;
(c) if such Definitive Note is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in Item (2) thereof;
(d) if such Definitive Note is being
transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in Item (3)(a)
thereof;
(e) if such Definitive Note is being
transferred to an Institutional Accredited Investor
or in reliance on any other exemption
19
from the registration requirements of the Securities
Act, in either case, other than those listed in
subparagraphs (b) through (d) above, a certificate in
the form of Exhibit B hereto, including
certifications, certificates, and any Opinion of
Counsel required by Item (3) thereof, if applicable;
(f) if such Definitive Note is being
transferred to the Company or any of its Subsidiaries,
a certificate to the effect set forth in Exhibit B
hereto, including the certifications in Item (3)(b)
thereof; or
(g) if such Definitive Note is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including
the certifications in Item (3)(c) thereof,
the Trustee, upon notice of receipt of such documentation by the
Security Registrar, shall cancel the Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of
subparagraph (a) above, the appropriate Restricted Global Note and, in
the case of subparagraph (b) above, the Rule 144A Global Note, and, in
the case of subparagraph (c) above, the Regulation S Global Note.
(2) Restricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of a
Restricted Definitive Note may exchange such Series E Note for
a beneficial interest in an Unrestricted Global Note or
transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(a) such exchange or transfer is effected
pursuant to an Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case of
a transfer, is not (i) a broker-dealer, (ii) a Person
participating in the distribution of the Exchange
Notes or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(b) any such transfer is effected pursuant to
a Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(c) any such transfer is effected by a
Broker-Dealer pursuant to an Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(d) the Security Registrar receives the
following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Series E Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in Item (1)(c) thereof;
or
20
(ii) if the Holder of such Definitive Notes proposes
to transfer such Series E Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in Item (4) thereof;
and, in each such case set forth in this subparagraph (d), an Opinion
of Counsel in form reasonably acceptable to the Company to the effect
that such exchange or transfer is in compliance with the Securities
Act, that the restrictions on transfer contained herein and in the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Definitive Notes are
being exchanged or transferred in compliance with any applicable blue
sky securities laws of any State of the United States.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 1(q)(v)(D)(2), the Trustee shall cancel
the Definitive Notes and increase or cause to be increased the
aggregate principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of an
Unrestricted Definitive Note may exchange such Series E Note
for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a
request for such an exchange or transfer, the Trustee shall
cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal
amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive
Note to a beneficial interest is effected pursuant to Sections
1(q)(v)(D)(2)(b) or (d) or the first paragraph of this Section
1(q)(v)(D)(3) at a time when an Unrestricted Global Note has
not yet been issued, the Company shall issue and, upon receipt
of an authentication order in accordance with Section 1(q)(ii)
of this Officer's Certificate, the Trustee shall authenticate
one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of beneficial
interests transferred pursuant to Sections 1(q)(v)(D)(2)(b) or
(d) or the first paragraph of this Section 1(q)(v)(D)(3).
(E) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 1(q)(v)(E), the Security
Registrar shall register the transfer or exchange of Definitive Notes.
Prior to such registration of transfer or exchange, the requesting
Holder shall present or surrender to the Security Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Security Registrar duly
executed by such Holder or by his attorney, duly authorized in writing.
In addition, the requesting Holder shall provide any additional
certifications, documents and information, as applicable, pursuant to
the provisions of this Section 1(q)(v)(E).
21
(1) Restricted Definitive Notes to Restricted
Definitive Notes. Restricted Definitive Notes may be
transferred to and registered in the name of Persons who
take delivery thereof if the Security Registrar receives
the following:
(a) if the transfer shall be made pursuant to
Rule 144A under the Securities Act, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in Item
(1) thereof;
(b) if the transfer shall be made pursuant to
Rule 903 or Rule 904 of the Securities Act, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in Item
(2) thereof; and
(c) if the transfer shall be made pursuant to
any other exemption from the registration requirements
of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion
of Counsel required by Item (3) thereof, if
applicable.
(2) Restricted Definitive Notes to Unrestricted
Definitive Notes. Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive
Note or transferred to a Person or Persons who take delivery
thereof in the form of an Unrestricted Definitive Note if:
(a) such exchange or transfer is effected
pursuant to an Exchange Offer in accordance with the
Registration Rights Agreement and the Holder of such
Series E Notes, in the case of an exchange, or the
transferee, in the case of a transfer, is not (i) a
broker-dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person
who is an affiliate (as defined in Rule 144) of the
Company;
(b) any such transfer is effected pursuant to
a Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(c) any such transfer is effected by a
Broker-Dealer pursuant to an Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(d) the Security Registrar receives the
following:
(i) if the Holder of such Restricted Definitive Notes proposes
to exchange such Series E Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in Item (1)(b) thereof; or
(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Series E Notes to a Person who shall take
delivery thereof in the form of an
22
Unrestricted Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in Item (4) thereof;
and, in each such case set forth in this subparagraph (d), an Opinion of Counsel
in form reasonably acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act, that the restrictions on
transfer contained herein and in the Private Placement Legend are not required
in order to maintain compliance with the Securities Act, and such Restricted
Definitive Note is being exchanged or transferred in compliance with any
applicable blue sky securities laws of any State of the United States.
(3) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Series E Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request for such a
transfer, the Security Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
Unrestricted Definitive Notes cannot be exchanged for or transferred to
Persons who take delivery thereof in the form of a Restricted
Definitive Note.
(F) Exchange Offer. Upon the occurrence of an Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of (a) an authentication order in accordance with Section 1(q)(ii)
of this Officer's Certificate and (b) an Opinion of Counsel opining as to the
enforceability of the Exchange Notes and the guarantees thereof, if any, the
Trustee shall authenticate (1) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
are not (i) broker-dealers, (ii) Persons participating in the distribution of
the Exchange Notes or (iii) Persons who are affiliates (as defined in Rule 144)
of the Company and accepted for exchange in such Exchange Offer and (2)
Definitive Notes in an aggregate principal amount equal to the principal amount
of the Restricted Definitive Notes accepted for exchange in such Exchange Offer,
unless the Holders of such Restricted Definitive Notes shall request the receipt
of Definitive Notes, in which case the Company shall execute and the Trustee
shall authenticate and deliver to the Persons designated by the Holders of such
Restricted Definitive Notes one or more Definitive Notes without the Private
Placement Legend in the appropriate principal amount. Concurrent with the
issuance of such Unrestricted Global Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and make available for delivery to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(G) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Officer's
Certificate.
(1) Private Placement Legend.
23
(a) Except as permitted by subparagraph (b) below,
each Global Note and each Definitive Note (and all Series E
Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR OTHER SECURITIES LAWS. NEITHER THIS
NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A
U.S. PERSON AND IS ACQUIRING ITS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT SHALL NOT
PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS
PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND
(Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE
RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED STATES, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY,
THE TRUSTEE AND THE SECURITY REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND
24
(II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER
IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS COMPLETED AND DELIVERED
BY THIS TRANSFEROR TO THE TRUSTEE. THIS LEGEND SHALL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
(b) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraph (B)(4),
(C)(2), (D)(2), (D)(3), (E)(2), (E)(3) or (F) of this Section
1(q)(v) (and all Series E Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement
Legend.
(2) Global Note Legend. Each Global Note shall bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE OFFICER'S
CERTIFICATE UNDER THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY
FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO ARTICLE III OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
SECTION 1(q)(v)(A) OF THE OFFICER'S CERTIFICATE UNDER THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
3.09 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY OR ANY
SUCCESSOR THERETO."
Additionally, for so long as DTC is the Depositary with respect to any
Global Note, each such Global Note shall also bear a legend in substantially the
following form:
"UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
(AS DEFINED IN THE OFFICER'S CERTIFICATE UNDER THE INDENTURE GOVERNING THIS
NOTE), TO THE COMPANY OR ANY SUCCESSOR THERETO OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN."
25
(H) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 3.09 of the
Indenture. At any time prior to such cancellation, if any beneficial interest in
a Global Note is exchanged for or transferred to a Person who shall take
delivery thereof in the form of a beneficial interest in another Global Note or
for Definitive Notes, the principal amount of Series E Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note, by the Trustee, the Note Custodian or the Depositary at the
direction of the Trustee, to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who shall take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note, by the Trustee, the Note Custodian or by the
Depositary at the direction of the Trustee, to reflect such increase.
(I) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, subject to
Section 1(q)(v) of this Officer's Certificate, the Company shall execute and,
upon the Company's order, the Trustee or an Authenticating Agent shall
authenticate Global Notes and Definitive Notes at the Security Registrar's
request.
(2) All certifications, certificates and Opinions of Counsel required
to be submitted to the Security Registrar pursuant to this Section 1(q)(v) to
effect a transfer or exchange may be submitted by facsimile.
(3) The Trustee and the Security Registrar shall have no obligation or
duty to monitor, determine or inquire as to whether any Person is or is not a
Person described in clauses (i), (ii) and (iii) of each of Sections
1(q)(v)(B)(4)(a), 1(q)(v)(C)(2)(a), 1(q)(v)(D)(2)(a), 1(q)(v)(E)(2)(a) and
1(q)(v)(F) of this Officer's Certificate or under applicable law (other than the
Trust Indenture Act) with respect to any transfer of any interest in any Series
E Note (including any transfers between or among Participants or beneficial
owners of interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof.
(vi) Outstanding Series E Notes.
Notwithstanding the definition of "Outstanding" in Section 1.01 of the
Indenture, Series E Notes that the Company, a Subsidiary of the Company or an
Affiliate of the Company offers to purchase or acquires pursuant to an offer,
exchange offer, tender offer or otherwise shall not be deemed to be owned by the
Company, such Subsidiary or such Affiliate until legal title to such Series E
Notes passes to the Company, such Subsidiary or such Affiliate, as the case may
be.
26
(r) Not applicable.
(s) The Series E Notes have not been registered under the Securities
Act and may not be offered, sold or otherwise transferred in the
absence of such registration or an applicable exemption therefrom. No
service charge shall be made for the registration of transfer or
exchange of the Series E Notes; provided, however, that the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the exchange or transfer
(other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 1.06(f), 3.04,
5.06 or 14.06 of the Indenture and Sections 1(h)(iii) and 1(h)(iv) of
this Officer's Certificate not involving any transfer).
(t) For purposes of the Series E Notes, "Business Day" shall mean any
day, other than Saturday or Sunday, on which commercial banks are open
for business, including dealings in deposits in U.S. dollars, in New
York.
(u) Certain Covenants and Definitions.
(i) Restricted Payments.
(A) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any
merger or consolidation involving the Company or any of
its Restricted Subsidiaries) or to the direct or indirect
holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company)
or to the Company or a Restricted Subsidiary of the
Company;
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any
merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent
of the Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value
any Indebtedness that is subordinated to the Series E
Notes, except a payment of interest or principal at the
Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4)
above being collectively referred to as "Restricted
Payments"),
unless, at the time of and after giving effect to such
Restricted Payment:
27
(1) no Default or Event of Default has occurred and
is continuing or would occur as a consequence of
such Restricted Payment; and
(2) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as
if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 1(u)(ii)(A) of this
Officer's Certificate (under the heading "Incurrence
of Indebtedness and Issuance of Preferred Stock"); and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the
Company and its Restricted Subsidiaries after the
original issue date of the Series E Notes (excluding
Restricted Payments permitted by clauses
1(u)(i)(B)(2), 1(u)(i)(B)(3) and 1(u)(i)(B)(4)), is
less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the
Company for the period (taken as one
accounting period) from the beginning of the
first fiscal quarter commencing after the
original issue date of the Series E Notes to
the end of the Company's most recently ended
fiscal quarter for which internal financial
statements are available at the time of such
Restricted Payment (or, if such Consolidated
Net Income for such period is a deficit, less
100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds
received by the Company (including the
fair market value of any Permitted
Business or assets used or useful in a
Permitted Business to the extent
acquired in consideration of Equity
Interests (other than Disqualified
Stock) of the Company) since the
original issue date of the Series E
Notes as a contribution to its common
equity capital or from the issue or
sale of Equity Interests of the Company
(other than Disqualified Stock and
other than sales to a Restricted
Subsidiary of the Company) or from the
issue or sale of convertible or
exchangeable Disqualified Stock or
convertible or exchangeable debt
securities of the Company that have
been converted into or exchanged for
such Equity Interests (other than
Disqualified Stock or debt securities
sold to a Subsidiary of the Company),
plus
(c) to the extent that any Restricted Investment
that was made after the original issue date
of the Series E Notes is sold for cash or
otherwise liquidated or repaid for cash, the
lesser of (i) the cash return of capital with
respect to such Restricted Investment (less
the cost of disposition, if any) and (ii) the
initial amount of such Restricted Investment,
plus
28
(d) to the extent that any Unrestricted
Subsidiary of the Company is redesignated as
a Restricted Subsidiary after the original
issue date of the Series E Notes, the lesser
of (i) the fair market value of the Company's
Investment in such Subsidiary as of the date
of such redesignation and (ii) the fair
market value of the Company's Investment in
such Subsidiary as of the date on which such
Subsidiary was originally designated as an
Unrestricted Subsidiary.
(B) Notwithstanding the foregoing, this Section 1(u)(i) shall
not prohibit:
(1) the payment of any dividend within 60 days after the
date of declaration of the dividend, if at the date of
declaration the dividend payment would have complied
with the provisions of this Officer's Certificate;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of Indebtedness of the Company
or any Subsidiary Guarantor that is subordinate or
junior in right of payment or of any Equity
Interests of the Company in exchange for, or out
of the net cash proceeds of the substantially
concurrent sale (other than to a Restricted
Subsidiary of the Company) of, Equity Interests
of the Company (other than Disqualified Stock);
provided that the amount of any such net cash
proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause
1(u)(i)(A)(3)(b);
(3) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the
Company with the net cash proceeds from an incurrence
of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its
Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the
Company or any Restricted Subsidiary of the Company
held by any member of the Company's (or any of its
Restricted Subsidiaries') management pursuant to any
management equity subscription agreement, stock option
agreement or similar agreement; provided that the
aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests may not
exceed $1.5 million in any twelve-month period;
(6) the payment of any distribution by a Trust Preferred
Vehicle to holders of such trust's preferred
beneficial interests, to the extent such distribution
does not exceed the amount that is contemporaneously
received by such trust as a payment of interest at its
Stated Maturity on the subordinated Indebtedness of
the Company held by such trust;
(7) payments to Sierra Pacific Resources to enable Sierra
Pacific Resources to pay its reasonable fees and
expenses (including but not limited to, interest
29
on Sierra Pacific Resources' Indebtedness and payment
obligations on account of Sierra Pacific's' Premium
Income Equity Securities) incurred in the ordinary
course of business, which fees and expenses shall not
be greater than $60.0 million for any one calendar
year; provided that (a) any such payment complies with
any regulatory restrictions then applicable to the
Company and (b) the Fixed Charge Coverage Ratio for
the Company's most recently ended four full fiscal
quarters for which internal financial statements are
available immediately preceding the date on which any
such payment is made was at least 1.75 to 1; and
(8) other Restricted Payments in an aggregate
amount since the original issue date of the
Series E Notes not to exceed $15.0 million;
provided that, with respect to clauses (2), (3), (5), (7) and
(8) above, no Default or Event of Default shall have occurred
and be continuing immediately after such transaction.
(C) The amount of all Restricted Payments (other than cash)
shall be the fair market value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued by the
Company or such Restricted Subsidiary, as the case may be, pursuant to
the Restricted Payment. The fair market value of any assets or
securities that are required to be valued by this covenant shall be
determined by the Board of Directors whose resolution with respect
thereto shall be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing
if the fair market value exceeds $15.0 million. Not later than the date
of making any Restricted Payment, the Company shall deliver to the
Trustee an Officer's Certificate stating that such Restricted Payment
is permitted and setting forth the basis upon which the calculations
required by this Section 1(u)(i) ("Restricted Payments") were computed,
together with a copy of any fairness opinion or appraisal required
under this Officer's Certificate. The Trustee shall have no duty or
responsibility to determine the accuracy or correctness of this
calculation and shall be fully protected in relying on such Officer's
Certificate. The Trustee shall make such fairness opinion available for
inspection by Holders of Series E Notes upon reasonably prior written
request during regular business hours.
(D) For purpose of clarification of the terms "subordinated"
and "pari passu" as used in this Officer's Certificate, no Indebtedness
of the Company shall be deemed to be contractually subordinated in
right of payment to any other Indebtedness of the Company solely by
virtue of being secured on a junior basis or by virtue of being
unsecured. All Indebtedness that is not subordinated Indebtedness shall
be pari passu to the Series E Notes.
(E) The provisions of this Section 1(u)(i)("Restricted
Payments") is subject to the provisions of Section 1(u)(xiv)("Certain
Covenants and Definitions--Suspension of Certain Covenants").
30
(ii) Incurrence of Indebtedness and Issuance of Preferred Stock.
(A) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock, and its Subsidiary Guarantors may
incur Indebtedness (including Acquired Debt) or issue Disqualified Stock if the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 2.0 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
(B) Notwithstanding the foregoing, this Section 1(u)(ii) shall not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(1) the incurrence by the Company pursuant to this clause (1) of
additional Indebtedness and letters of credit under one or
more Credit Facilities (with letters of credit being deemed to
have a principal amount equal to the maximum potential
liability of the Company thereunder), together with the
principal component of amounts outstanding under Qualified
Receivables Transactions, in an aggregate amount up to $250.0
million at any time outstanding;
(2) the incurrence by the Company and its Restricted Subsidiaries
of the Existing Indebtedness;
(3) the incurrence by the Company of Indebtedness represented by
the Series E Notes to be issued on the original issue date of
the Series E Notes (and the related Exchange Notes to be
issued pursuant to the Registration Rights Agreement) and the
incurrence by any Subsidiary Guarantor of a Subsidiary
Guarantee of those Series E Notes (and the related Exchange
Notes);
(4) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of
financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment
used in the business of the Company or such Subsidiary
Guarantor, in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred
31
pursuant to this clause (4), not to exceed $10.0 million at
any time outstanding;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange
for, or the net proceeds of which are used to refund,
refinance or replace Indebtedness (other than intercompany
Indebtedness) that was incurred under Section 1(u)(ii)(A) or
clauses (2), (3)(5) or (12) of this Section 1(u)(ii)(B);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries (other than a Receivables Entity) of intercompany
Indebtedness between or among the Company or any of its
Restricted Subsidiaries (other than a Receivables Entity);
provided, however, that:
(a) if the Company is the obligor on such Indebtedness,
such Indebtedness must be expressly subordinated to
the prior payment in full in cash of all Obligations
with respect to the Series E Notes;
(b) if a Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of
such Subsidiary Guarantor's Subsidiary Guarantee; and
(c) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness
being held by a Person other than the Company or a
Restricted Subsidiary and (ii) any sale or other
transfer of any such Indebtedness to a Person that
is not either the Company or a Restricted Subsidiary
shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or
such Restricted Subsidiary, as the case may be, that
was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations;
(8) the guarantee by the Company or any Restricted Subsidiary of
Indebtedness of the Company or any Restricted Subsidiary that
was permitted to be incurred by another provision of this
Section 1(u)(ii) ("Incurrence of Indebtedness and Issuance of
Preferred Stock");
(9) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Stock
in the form of additional shares of such Disqualified Stock
shall not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this Section
1(u)(ii) ("Incurrence of Indebtedness and Issuance of
Preferred Stock"); provided, in each such case, that the
amount thereof is included in the Fixed Charges of the Company
as accrued;
32
(10) Indebtedness in respect of bid, performance or surety bonds
issued for the account of the Company or any Restricted
Subsidiary thereof in the ordinary course of business,
including guarantees or obligations of the Company or any
Restricted Subsidiary thereof with respect to letters of
credit supporting such bid, performance or surety obligations
(in each case other than for an obligation for money
borrowed);
(11) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an
Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company that was not permitted by this
clause (11);
(12) the incurrence by the Company of additional Indebtedness
consisting of securities issued pursuant to the Indenture in
respect of claims relating to the Company's obligations
pursuant to agreements with gas, electric power and other
energy suppliers that have been terminated as of the original
issue date of the Series E Notes;
(13) the incurrence by the Company or any Restricted Subsidiary of
additional Indebtedness consisting of letters of credit for
purposes of supporting the Company's or any Restricted
Subsidiary's obligations now or hereafter owing to gas,
electric power or other energy suppliers, not to exceed $10.0
million at any time outstanding;
(14) the issuance by the Company of up to $125 million of
Securities issued pursuant to the Indenture in connection
with a Qualified Receivables Transaction;
(15) the issuance by a Receivables Entity of a Purchase Money
Note in connection with a Qualified Receivables
Transaction; and
(16) the incurrence by the Company or any Restricted Subsidiary of
additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable), including all Permitted
Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause
(16), not to exceed $30.0 million at any time outstanding.
(C) Notwithstanding the foregoing, the Company shall not issue any
additional First Mortgage Bonds, except as necessary to replace any mutilated,
lost or destroyed First Mortgage Bonds or to effect exchanges and transfers of
First Mortgage Bonds.
(D) The Company shall not incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of the Company unless such Indebtedness is also contractually
subordinated in right of payment to the Series E Notes on substantially
identical terms; provided, however, that no Indebtedness of the Company shall be
deemed to be contractually subordinated in right of
33
payment to any other Indebtedness of the Company solely by virtue of being
secured on a junior basis or by virtue of being unsecured.
(E) For purposes of determining compliance with this Section 1(u) (ii)
("Incurrence of Indebtedness and Issuance of Preferred Stock"):
(1) in the event that an item of proposed Indebtedness, including
Acquired Debt, meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through
(16) above, or is entitled to be incurred pursuant to the
first paragraph of this Section 1(u)(ii), the Company shall be
permitted to classify (or later classify or reclassify such
Indebtedness, in whole or in part in its sole discretion) such
item of Indebtedness in any manner that complies with this
Section 1(u)(ii); and
(2) for the purposes of determining compliance with any
dollar-denominated restriction on the incurrence of
Indebtedness denominated in a foreign currency, the
dollar-equivalent principal amount of such Indebtedness
incurred pursuant thereto shall be calculated based on the
relevant currency exchange rate in effect on the date that
such Indebtedness was incurred.
(F) The provisions of this Section 1(u)(ii)("Incurrence of Indebtedness
and Issuance of Preferred Stock") is subject to the provisions of Section
1(u)(xiv)("Certain Covenants and Definitions--Suspension of Certain Covenants").
(iii) Series E Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Series E Lien of any kind
securing Indebtedness, Attributable Debt or trade payables on any of their
property or assets, now owned or hereafter acquired, except Series E Permitted
Liens.
(iv) Dividend and Other Payment Restrictions Affecting
Subsidiaries.
(A) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Subsidiaries, or with
respect to any other interest or participation in, or measured
by, its profits, or pay any Indebtedness owed to the Company
or any of its Restricted Subsidiaries;
(2) make loans or advances to Company or any of its Restricted
Subsidiaries; or
34
(3) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries.
(B) Notwithstanding the foregoing, this Section (1)(u)(iv) shall not
apply to encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit
Facilities or Qualified Receivables Transactions as in effect
on the original issue date of the Series E Notes and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those
agreements, provided that the amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as
a whole, with respect to such dividend and other payment
restrictions than those contained in those agreements on the
original issue date of the Series E Notes;
(2) the Indenture, this Officer's Certificate and the Series E
Notes;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of
the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of
this Officer's Certificate to be incurred;
(5) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past
practices;
(6) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on that
property of the nature described in clause 1(u)(iv)(A)(3);
(7) any Purchase Money Note or other Indebtedness or contractual
requirements incurred with respect to a Qualified Receivables
Transaction relating exclusively to a Receivables Entity that,
in the good faith determination of the Board of Directors, are
necessary to effect such Qualified Receivables Transaction;
(8) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions or
dispositions of assets by that Restricted Subsidiary pending
its sale or other disposition;
35
(9) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are not more restrictive,
taken as a whole, than those contained in the agreements
governing the Indebtedness being refinanced;
(10) Series E Liens securing Indebtedness otherwise permitted to be
incurred under the provisions of Section 1(u)(iii) of this
Officer's Certificate ("Series E Liens") that limit the right
of the debtor to dispose of the assets subject to such Series
E Liens; and
(11) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale
agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business.
(C) The provisions of this Section 1(u)(iv)("Dividends and Other
Payment Restrictions Affecting Restricted Subsidiaries") is subject to the
provisions of Section 1(u)(xiv)("Certain Covenants and Definitions--Suspension
of Certain Covenants").
(v) Asset Sales.
(A) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least
equal to the fair market value of the assets or Equity
Interests issued or sold or otherwise disposed of;
(2) the fair market value is determined by the Board of
Directors and evidenced by a resolution of the Board of
Directors set forth in an Officer's Certificate delivered to
the Trustee; and
(3) at least 75% of the consideration received in the Asset Sale
by the Company or such Restricted Subsidiary is in the form of
cash. For purposes of this provision, each of the following
shall be deemed to be cash:
(a) any liabilities, as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet,
of the Company or any Restricted Subsidiary (other
than contingent liabilities and liabilities that are
by their terms subordinated to the notes) that are
assumed by the transferee of any such assets
pursuant to a customary novation agreement that
releases the Company or such Restricted Subsidiary
from further liability; and
(b) any securities, notes or other obligations received
by the Company or any such Restricted Subsidiary
from such transferee that are
36
contemporaneously, subject to ordinary settlement
periods, converted by the Company or such Restricted
Subsidiary into cash, to the extent of the cash
received in that conversion.
(B) Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply those Net Proceeds at its option:
(1) to repay senior secured Indebtedness of the Company;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure; or
(4) to acquire other long-term assets that are used or useful in
a Permitted Business.
(C) Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Officer's Certificate.
(D) Any Net Proceeds from Asset Sales that are not applied or invested
as provided in Section 1(u)(v)(B) shall constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $25.0 million, the Company shall
make an Asset Sale Offer pursuant to the provisions of Section 1(h)(iv) of this
Officer's Certificate.
(E) To the extent that any Asset Sale constitutes the sale, conveyance
or other disposition of all or substantially all of the assets of the Company
and its Restricted Subsidiaries taken as a whole, such transaction shall be
governed by the provisions of this Officer's Certificate in Sections (1)(h)(iii)
and (1)(u)(vi) (under the heading "Offer to Repurchase Upon a Change of Control"
and the heading "Certain Covenants and Definitions--Merger, Consolidation or
Sale of Assets") and not by the provisions of this Section 1(u)(v) or Section
1(h)(iv) of this Officer's Certificate.
(vi) Merger, Consolidation or Sale of Assets.
(A) The Company shall not, directly or indirectly: (1) consolidate or
merge with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either: (a) the Company is the surviving corporation; or (b)
the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale,
assignment, transfer, conveyance or other disposition has been
made is a corporation organized or existing under the laws of
the United States, any state of the United States or the
District of Columbia;
37
(2) (a) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which
such sale, assignment, transfer, conveyance or other
disposition has been made assumes all the obligations of the
Company under the Series E Notes, the Indenture and the
Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee; and (b) such Person
executes and delivers to the Trustee a supplemental indenture
that contains a grant, conveyance, transfer and mortgage by
such Person confirming the lien of the Indenture on the
property subject to such lien and subjecting to such lien all
property thereafter acquired by such Person that shall
constitute an improvement, extension or addition to the
property subject to the lien of the Indenture or renewal,
replacement or substitution of or for any part thereof and, at
the election of such Person, subjecting to the lien of the
Indenture such other property then owned or thereafter
acquired by such Person as such Person shall specify;
(3) immediately after such transaction no Default or Event of
Default exists;
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, conveyance or other
disposition has been made shall, on the date of such
transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at
the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 1(u)(ii)(A) of this Officer's Certificate (under the
heading "Incurrence of Indebtedness and Issuance of Preferred
Stock"); provided, however, that this clause (4) shall be
suspended during any period in which the Company and its
Restricted Subsidiaries are not subject to the Suspended
Covenants; and
(5) the Company, or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, conveyance or other
disposition has been made, shall have delivered to the Trustee
an Officer's Certificate and an Opinion of Counsel, each
stating that such transaction and any supplemental indenture
entered into in connection therewith complies with all of the
terms of this Section 1(u)(vi) and that all conditions
precedent provided for in this Section 1(u)(vi) relating to
such transaction or series of transactions have been complied
with.
(B) In addition, the Company may not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person. Clauses (4) and (5) under Section 1(u)(vi)(A)
shall not apply to a sale, assignment, transfer, conveyance or other disposition
of assets between or among the Company and any of its Restricted Subsidiaries.
38
(C) In addition, the Company shall not effect any consolidation,
merger, sale, assignment, transfer, conveyance or other disposition as is
contemplated in this Section 1(u)(v), unless the Company also complies with
Sections 13.01 and 13.02 of the Indenture and the Person formed by or surviving
any such consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, conveyance or other disposition has been made, shall
be deemed a Successor Corporation under the Indenture.
(vii) Transactions with Affiliates.
(A) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with
an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million,
a resolution of the Board of Directors set forth in
an Officer's Certificate certifying that such
Affiliate Transaction complies with this Section
1(u)(vii) and that such Affiliate Transaction has
been approved by a majority of the disinterested
members of the Board of Directors; and
(b) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving
aggregate consideration in excess of $20.0 million,
an opinion as to the fairness to the Holders of
Series E Notes of such Affiliate Transaction from a
financial point of view issued by an accounting,
appraisal or investment banking firm of national
standing.
(B) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of Section
1(u)(vii)(A) above:
(1) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such
Restricted Subsidiary;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries (other than a Receivables Entity);
39
(3) transactions with a Person that is an Affiliate of the
Company solely because the Company owns an Equity Interest
in such Person;
(4) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Company;
(5) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company;
(6) Permitted Investments pursuant to this Officer's Certificate
and Restricted Payments that are permitted by the provisions
of this Officer's Certificate in Section 1(u)(i) (under the
heading "Restricted Payments");
(7) fees and compensation paid to and indemnity provided on behalf
of directors, officers or employees of the Company or any
Restricted Subsidiary of the Company in the ordinary course of
business;
(8) transactions pursuant to any agreement in effect on the date
of this Officer's Certificate as the same may be amended from
time to time in any manner not materially less favorable to
the Holders of the Series E Notes;
(9) loans or advances to officers, directors and employees of the
Company or any Restricted Subsidiary made in the ordinary
course of business, consistent with past practices of the
Company and/or its Restricted Subsidiaries and in compliance
with applicable law in an aggregate amount not to exceed $1.0
million outstanding at any one time; and
(10) sales or other transfers or dispositions of accounts
receivable and other related assets customarily transferred in
an asset securitization transaction involving accounts
receivable to a Receivables Entity in a Qualified Receivables
Transaction, and acquisitions of Permitted Investments in
connection with a Qualified Receivables Transaction.
(C) The provisions of this Section 1(u)(vii)("Transactions with
Affiliates") is subject to the provisions of Section 1(u)(xiv)("Certain
Covenants and Definitions--Suspension of Certain Covenants").
(viii) Designation of Restricted and Unrestricted Subsidiaries.
(A) The Board of Directors may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if that designation would not cause a Default;
provided that in no event shall the business currently operated by the Company
be transferred to or held by an Unrestricted Subsidiary. If a Restricted
Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair
market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated shall be deemed to
be an Investment made as of the time of the designation and shall reduce the
amount available for Restricted Payments under Section 1(u)(i)(A) of this
Officer's Certificate (under the heading "Restricted Payments"). That
designation shall only be
40
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
(B) The Board of Directors may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation shall
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (1) such Indebtedness is permitted under
Section 1(u)(ii) of this Officer's Certificate (under the heading "Incurrence of
Indebtedness and Issuance of Preferred Stock"), calculated on a pro forma basis
as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation.
(C) The provisions of this Section 1(u)(viii)("Designation of
Restricted and Unrestricted Subsidiaries") is subject to the provisions of
Section 1(u)(xiv)("Certain Covenants and Definitions--Suspension of Certain
Covenants").
(ix) Future Subsidiary Guarantees.
(A) The Company shall not permit any Restricted Subsidiary to guarantee
the payment of any Indebtedness of the Company unless (1) such Restricted
Subsidiary simultaneously executes and delivers to the Trustee a Subsidiary
Guarantee of such Restricted Subsidiary except that with respect to a Guarantee
of Indebtedness of the Company if such Indebtedness is by its express terms
subordinated in right of payment to the Series E Notes, any such Guarantee of
such Restricted Subsidiary with respect to such Indebtedness shall be
subordinated in right of payment to such Restricted Subsidiary's Subsidiary
Guarantee with respect to the Series E Notes substantially to the same extent as
such Indebtedness is subordinated to the Series E Notes; (2) such Restricted
Subsidiary waives and shall not in any manner whatsoever claim or take the
benefit or advantage of, any rights or reimbursement, indemnity or subrogation
or any other rights against the Company or any other Restricted Subsidiary as a
result of any payment by such Restricted Subsidiary under its Subsidiary
Guarantee of the Series E Notes; and (3) such Restricted Subsidiary shall
deliver to the Trustee an Opinion of Counsel to the effect that (a) such
Subsidiary Guarantee has been duly executed and authorized and (b) such
Subsidiary Guarantee constitutes a valid, binding and enforceable obligation of
such Restricted Subsidiary, except insofar as enforcement thereof may be limited
by bankruptcy, insolvency or similar laws (including, without limitation, all
laws relating to fraudulent transfers) and except insofar as enforcement thereof
is subject to general principles of equity; provided that this Section
1(u)(ix)(A) shall not be applicable to any Guarantee of any Restricted
Subsidiary that (x) existed at the time such Person became a Restricted
Subsidiary of the Company and (y) was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary of the Company.
(B) Notwithstanding the foregoing and the other provisions of this
Officer's Certificate, in the event a Subsidiary Guarantor is sold or disposed
of (whether by merger, consolidation, the sale of its Capital Stock or the sale
of all or substantially all of its assets (other than by lease) and whether or
not the Subsidiary Guarantor is the
41
surviving corporation in such transaction) to a Person which is not the Company
or a Restricted Subsidiary of the Company (other than a Receivables Entity),
such Subsidiary Guarantor shall be released from its obligations under its
Subsidiary Guarantee if:
(1) the sale or other disposition is in compliance with the
applicable provisions of this Officer's Certificate, including
Sections 1(h)(iv) of this Officer's Certificate (under the
heading "Offer to Purchase by Application of Excess
Proceeds"); and
(2) the Subsidiary Guarantor is also released or discharged from
its obligations under the Guarantee which resulted in the
creation of such Subsidiary Guarantee, except by or as a
result of payment under such Guarantee.
(x) Sale and Leaseback Transactions.
(A) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(1) the Company or that Restricted Subsidiary, as applicable,
could have incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback
transaction under the Fixed Charge Coverage Ratio test in
Section 1(u)(ii)(A) of this Officer's Certificate (under the
heading "Incurrence of Indebtedness and Issuance of Preferred
Stock");
(2) the gross cash proceeds of that sale and leaseback transaction
are at least equal to the fair market value, as determined in
good faith by the Board of Directors and set forth in an
Officer's Certificate delivered to the Trustee, of the
property that is the subject of that sale and leaseback
transaction; and
(3) the transfer of assets in that sale and leaseback transaction
is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 1(h)(iv) of this
Officer's Certificate (under the heading "Offer to Purchase by
Application of Excess Proceeds");
provided, however, that the foregoing clauses (1) and (3) shall be suspended
during any period in which the Company and its Restricted Subsidiaries are not
subject to the Suspended Covenants.
(xi) Business Activities.
(A) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than Permitted Businesses, except to
such extent as would not be material to the Company and its Subsidiaries taken
as a whole.
42
(B) The provisions of this Section 1(u)(xi)("Business Activities") is
subject to the provisions of Section 1(u)(xiv)("Certain Covenants and
Definitions--Suspension of Certain Covenants").
(xii) Payments for Consent.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Series E Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Officer's
Certificate or the Series E Notes unless such consideration is offered to be
paid and is paid to all Holders of the Series E Notes that consent, waive or
agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
(xiii) Reports.
(A) Whether or not required by the Commission, so long as any Series E
Notes are outstanding, the Company shall make available to the Holders of Series
E Notes, within the time periods specified in the Commission's rules and
regulations (as if required):
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the
certifications that would be required by Rule 13a-14 under the
Exchange Act and, with respect to the annual information only,
a report on the annual financial statements by the Company's
certified independent accountants; and
(2) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to
file such reports.
(B) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
In addition, whether or not required by the Commission, the Company
shall file a copy of all of the information and reports referred to in clauses
(1) and (2) above with the Commission for public availability within the time
periods specified in the Commission's rules and regulations (unless the
Commission shall not accept such a filing) and make such information available
to securities analysts and prospective investors upon request. In addition, the
Company has agreed that, for so long as any Series E Notes remain
43
outstanding, they shall furnish to the Holders of Series E Notes and to
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(xiv) Suspension of Certain Covenants.
(A) During any period of time that the notes have an Investment Grade
Rating from both of the Rating Agencies and no Default or Event of Default has
occurred and is continuing under the Indenture, the Company and its Restricted
Subsidiaries shall not be subject to the following provisions of this Officer's
Certificate: Section 1(h)(iv), Section 1(u)(i), Section 1(u)(ii), Section
1(u)(iv), Section 1(u)(v), Section 1(u)(vii), Section 1(u)(viii) and Section
1(u)(xi) (under the headings: "Mandatory Redemption/Redemption at Option of
Holders/Offers to Purchase--Offer to Purchase by Application of Excess
Proceeds," "Certain Covenants and Definitions--Restricted Payments," "Certain
Covenants and Definitions--Incurrence of Indebtedness and Issuance of Preferred
Stock," "Certain Covenants and Definitions--Dividend and Other Payment
Restrictions Affecting Subsidiaries," "Certain Covenants and Definitions--Asset
Sales," "Certain Covenants and Definitions--Transactions with Affiliates,"
"Certain Covenants and Definitions--Designation of Restricted and Unrestricted
Subsidiaries," and "Certain Covenants and Definitions--Business Activities")
(collectively, the "Suspended Covenants"); provided, however, that the
provisions in Section 1(h)(iii), Section 1(u)(iii), Section 1(u)(vi) (except as
set forth in that Section 1(u)(vi)), Section 1(u)(ix) (except as set forth in
that Section 1(u)(ix), Section 1(u)(x), Section 1(u)(xii) (except as set forth
in that Section 1(u)(xii)) and Section 1(u)(xiii) (under the headings "Mandatory
Redemption/Redemption at Option of Holders/Offers to Purchase--Offer to Purchase
Upon Change of Control," "Certain Covenants and Definitions--Liens," "Certain
Covenants and Definitions--Merger, Consolidation or Sale of Assets" (except as
set forth thereunder), "Certain Covenants and Definitions--Future Subsidiary
Guarantees" (except as set forth thereunder), "Certain Covenants and
Definitions--Sale and Leaseback Transactions" (except as set forth thereunder),
"Certain Covenants and Definitions--Payments for Consent," and "Reports") of
this Officer's Certificate shall not be so suspended.
(B) If the Company and its Restricted Subsidiaries are not subject to
the Suspended Covenants for any period of time as a result of the preceding
Section 1(xiv)(A) and, subsequently, either of the Rating Agencies withdraws its
ratings or downgrades the ratings assigned to the Series E Notes below the
Investment Grade Ratings so that the Series E Notes do not have an Investment
Grade Rating from both Rating Agencies, or a Default or Event of Default (other
than with respect to the Suspended Covenants) occurs and is continuing, the
Company and its Restricted Subsidiaries shall thereafter again be subject to the
Suspended Covenants, subject to the terms, conditions and obligations set forth
in this Officer's Certificate (each such date of reinstatement being the
"Reinstatement Date"), including the preceding Section 1(xiv)(A). Compliance
with the Suspended Covenants with respect to Restricted Payments made after the
Reinstatement Date shall be calculated in accordance with the terms of Section
1(u)(i) of this Officer's Certificate (under "Certain Covenants and
Definitions--Restricted Payments") as though such covenant had been in effect
during
44
the entire period of time from which the Series E Notes are issued, provided,
however, that no immediate Default or Event of Default shall occur as a result
of such reinstatement of the Suspended Covenants.
(xv) Covenant Defeasance.
(A) Option to Effect Covenant Defeasance. The Company may, at the
option of the Board of Directors evidenced by a resolution set forth in an
Officers' Certificate, at any time, elect to have Section 1(u)(xv)(B) hereof be
applied to all outstanding Series E Notes upon compliance with the conditions
set forth below in Section 1(u)(xv)(C) hereof.
(B) Exercise of Covenant Defeasance. Upon the Company's exercise under
Section 1(u)(xv)(A) hereof of the option applicable to this Section 1(u)(xv)(B),
the Company shall, subject to the satisfaction of the conditions set forth in
Section 1(u)(xv)(C) hereof, be released from each of its obligations under the
covenants contained in Section 1(h)(iii), Section 1(h)(iv), Section 1(u)(i),
Section 1(u)(ii), Section 1(u)(iii), Section 1(u)(iv), Section 1(u)(v), Section
1(u)(vii), Section 1(u)(viii), Section 1(u)(ix), Section 1(u)(x), Section
1(u)(xi), Section 1(u)(xii) hereof (under the headings: "Mandatory
Redemption/Redemption at Option of Holders/Offers to Purchase--Offer to Purchase
Upon Change of Control," Mandatory Redemption/Redemption at Option of
Holders/Offers to Purchase--Offer to Purchase by Application of Excess
Proceeds," "Certain Covenants and Definitions--Restricted Payments," "Certain
Covenants and Definitions--Incurrence of Indebtedness and Issuance of Preferred
Stock," "Certain Covenants and Definitions--Liens," "Certain Covenants and
Definitions--Dividend and Other Payment Restrictions Affecting Subsidiaries,"
"Certain Covenants and Definitions--Asset Sales," "Certain Covenants and
Definitions--Transactions with Affiliates," "Certain Covenants and
Definitions--Designation of Restricted and Unrestricted Subsidiaries," "Certain
Covenants and Definitions--Future Subsidiary Guarantees," "Certain Covenants and
Definitions--Sale and Leaseback Transactions," "Certain Covenants and
Definitions--Business Activities" and "Certain Covenants and
Definitions--Payment for Consents") and clause (A)(4) of Section 1(u)(vi) (under
the heading "Certain Covenants and Definitions--Merger, Consolidation or Sale of
Assets") hereof with respect to the Outstanding Series E Notes on and after the
date the conditions set forth in Section 1(u)(xv)(C) hereof are satisfied
(hereinafter, "Covenant Defeasance"), and the Series E Notes shall thereafter be
deemed not Outstanding for the purposes of any direction, waiver, consent or
declaration or act of Holders of Securities, including but not limited to,
Holders of Series E Notes (and the consequences of any thereof) in connection
with such covenants, but will continue to be deemed Outstanding for all other
purposes hereunder. For this purpose, Covenant Defeasance means that, with
respect to the Outstanding Series E Notes, the Company may omit to comply with
and will have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply will not constitute a Triggering Event under Section
1(h)(ii) hereof or a Default or an Event of Default under Section 10.01 of the
Indenture, but, except as specified above, the remainder of the Indenture, this
Officer's Certificate and such Series E Notes will be unaffected thereby.
45
In addition, upon the Company's exercise under Section 1(u)(xv)(A) hereof of the
option applicable to Section 1(u)(xv)(B) hereof, subject to the satisfaction of
the conditions set forth in Section 1(u)(xv)(C) hereof, Sections 1(h)(ii)(A)(3)
through 1(h)(ii)(A)(7) hereof will not constitute Triggering Events.
(C) Conditions to Covenant Defeasance. In order to exercise
Covenant Defeasance under this Section 1(u)(xv):
(1) the Company must irrevocably deposit with the Trustee or any
Paying Agent (other than the Company), in trust for the
benefit of the Holders of the Series E Notes: (a) money
(including Funded Cash not otherwise applied pursuant to the
Indenture) in an amount which will be sufficient, or (b)
Eligible Obligations which do not contain provisions
permitting the redemption or other prepayment thereof at the
option of the issuer thereof, the principal of and the
interest on which when due, without any regard to reinvestment
thereof, will provide monies which, together with the money,
if any, deposited with or held by the Trustee or such Paying
Agent, will be sufficient, or (c) a combination of (a) and (b)
which will be sufficient, to pay when due the principal of and
premium, if any, and interest, if any, and Liquidated Damages,
if any, due and to become due on the Series E Notes or
portions thereof provided, that the Company shall have
delivered to the Trustee and such Paying Agent: (I) a Company
Order stating that the money and Eligible Obligations
deposited in accordance with this Section 1(u)(xv)(C) shall be
held in trust, as provided in Section 9.03 of the Indenture;
and (II) if Eligible Obligations shall have been deposited, an
Opinion of Counsel to the effect that such obligations
constitute Eligible Obligations and do not contain provisions
permitting the redemption or other prepayment thereof at the
option of the issuer thereof, and an opinion of an Independent
public Accountant of nationally recognized standing, selected
by the Company, to the effect that the other requirements set
forth in Section 1(u)(xv)(C)(1)(b) above have been satisfied;
(2) the Company shall have delivered to the Trustee an Opinion of
Counsel confirming that the Holders of the Outstanding Series
E Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(3) no Triggering Event shall have occurred and be continuing on
the date of such deposit (other than a Triggering Event
arising from the breach of a covenant under this Officer's
Certificate resulting from the borrowing of funds to be
applied to such deposit);
(4) such Covenant Defeasance will not result in a breach or
violation of, or constitute a default under any material
agreement or instrument (other than
46
the Indenture ) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(5) the Company must deliver to the Trustee an Officer's
Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Series E
Notes over the other creditors of the Company with the intent
of defeating, hindering, delaying or defrauding creditors of
the Company or others; and
(6) the Company must deliver to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the Covenant Defeasance have
been complied with.
(xvi) Additional Conditions to Section 9.01 of Indenture.
Notwithstanding the provisions of Section 9.01 of the Indenture, no
Series E Note shall be deemed to have been paid pursuant to such provisions
unless the Company shall have delivered to the Trustee either: (a) an Opinion of
Counsel in the United States reasonably acceptable to the Trustee confirming
that (i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (ii) since the date of this Officer's
Certificate, there has been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the Outstanding Series E Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such satisfaction and discharge and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such satisfaction and discharge had not occurred; or (b) (i) an
instrument wherein the Company, notwithstanding the satisfaction and discharge
of the Company's Indebtedness in respect of the Series E Notes, shall assume the
obligation (which shall be absolute and unconditional) to irrevocably deposit
with the Trustee such additional sums of money, if any, or additional Eligible
Obligations, if any, or any combination thereof, at such time or times, as shall
be necessary, together with the money and/or Eligible Obligations theretofore so
deposited, to pay when due the principal of and premium, if any, and interest
due and to become due on such Series E Notes or portions thereof; provided,
however, that such instrument may state that the Company's obligation to make
additional deposits as aforesaid shall be subject to the delivery to the Company
by the Trustee of a notice asserting the deficiency accompanied by an opinion of
an Independent public Accountant of nationally recognized standing showing the
calculation thereof; and (ii) an Opinion of Counsel of tax counsel in the United
States reasonably acceptable to the Trustee to the effect that the Holders of
the Outstanding Series E Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such satisfaction and discharge and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such satisfaction and
discharge had not occurred.
47
(xvii) Modifications Requiring Consent.
In addition to the provisions of Section 14.02 of the Indenture, no
supplemental indenture shall alter or waive any of the provisions with respect
to the redemption of the Series E Notes set forth in Section 1(g) hereof without
the consent of each Holder of Series E Notes affected thereby.
(xviii) Certain Definitions.
Set forth below are certain defined terms used in this Officer's
Certificate. Reference is made to the Indenture for the definitions of any other
capitalized terms used herein for which no definition is provided herein.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of
such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such
other Person merging with or into, or becoming a Subsidiary
of, such specified Person; and
(2) Indebtedness secured by a Series E Lien encumbering any asset
acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Affiliate Transaction" has the meaning assigned to it in Section
1(u)(vii)(A) of this Officer's Certificate.
"Agent" means: any Security Registrar, Paying Agent or Authenticating
Agent.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets
or rights, other than sales of inventory in the ordinary
course of business consistent with past practices; provided
that the sale, conveyance or other
48
disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole shall
be governed by the provisions in Section 1(u)(x) ("Repurchase
at the Option of Holders--Change of Control") and/or Section
1(u)(vi) ("Certain Covenants--Merger, Consolidation or Sale of
Assets") and not by Section 1(u)(v) ("Certain Covenants--Asset
Sales") of this Officer's Certificate; and
(2) the issuance of Equity Interests in any of the Company's
Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed
to be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0
million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary;
(4) a Restricted Payment or Permitted Investment that is permitted
by Section 1(u)(i) of this Officer's Certificate (under the
heading "Certain Covenants--Restricted Payments");
(5) sales of accounts receivable and related assets or an
interest therein of the type specified in the definition of
Qualified Receivables Transaction to or by a Receivables
Entity; and
(6) sales, transfers or other dispositions of assets, including
Capital Stock of Restricted Subsidiaries, for consideration at
least equal to the fair market value of the assets sold or
disposed of, but only if the consideration received consists
of Capital Stock of a Person that becomes a Restricted
Subsidiary engaged in, or property or assets (other than cash,
except to extent used as a bona fide means of equalizing the
value of the property or assets involved in the swap
transaction) of a nature or type or that are used in, a
business of the issuer and its Restricted Subsidiaries
existing on the date of such sale or other disposition;
provided, however, that any cash received by the Company shall
be treated as Net Proceeds and applied as set forth in the
Section 1(g)(iii) of this Officer's Certificate (under the
heading "Repurchase at the Option of Holders--Asset Sales");
provided further that the fair market value of the assets sold
or disposed of is determined as provided in Section 1(u)(i)(C)
of this Officer's Certificate (under the heading "Certain
Covenants--Restricted Payments").
"Asset Sale Offer" has the meaning assigned to it in Section 1(h)(iv)
(A) of this Officer's Certificate.
49
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of
such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other
equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or
limited); and
50
(4) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or
instrumentality of the United States government (provided that
the full faith and credit of the United States is pledged in
support of those securities) having maturities of not more
than one year from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $500.0
million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses
(2) and (3) above entered into with any financial institution
meeting the qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Moody's or S&P and in each case maturing within 270 days after
the date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses
(1) through (5) of this definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or
substantially all of the properties or assets of the Company
and its Restricted Subsidiaries taken as a whole to any
"person" (as that term is used in Section 13(d)(3) of the
Exchange Act, including any "group" with the meaning of the
Exchange Act);
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which
is that any "person" (as
51
defined above) becomes the Beneficial Owner, directly or
indirectly, of more than 30% of the Voting Stock of the
Company or Sierra Pacific Resources, measured by voting power
rather than number of shares; or
(4) the first day on which a majority of the members of the Board
of Directors or the Board of Sierra Pacific Resources are not
Continuing Directors.
"Change of Control Offer" has the meaning assigned to it in Section
1(h)(iii)(A) of this Officer's Certificate.
"Change of Control Payment" has the meaning assigned to it in Section
1(h)(iii)(A) of this Officer's Certificate.
"Change of Control Payment Date" has the meaning assigned to it in
Section 1(h)(iii)(B)(2) of this Officer's Certificate.
"Clearstream" means Clearstream Banking, societe anonyme.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Subsidiaries in
connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or
accrued and whether or not capitalized (including, without
limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations), to the extent that
any such expense was deducted in computing such Consolidated
Net Income; plus
(4) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other
non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash
expenses in any future period of such Person and its
Restricted Subsidiaries for such period to the extent that
such depreciation,
52
amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income); plus
(5) all extraordinary, unusual or non-recurring items of loss or
expense; minus
(6) all extraordinary, unusual or non-recurring items of gain or
revenue; minus
(7) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary
course of business,
in each case, on a consolidated basis and determined in accordance with GAAP;
provided that non-cash expenses recorded as a result of deferred energy
accounting shall not be added to Consolidated Net Income.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity
method of accounting shall be included only to the extent of
the amount of dividends or distributions paid in cash to the
specified Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary shall be excluded
to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that
Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been
obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of
such acquisition shall be excluded;
(4) the cumulative effect of a change in accounting principles
shall be excluded; and
(5) any equity in earnings or losses of Sierra Pacific Resources
shall be excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who:
(1) was a member of the Board of Directors on the original issue
date of the Series E Notes; or
53
(2) was nominated for election or elected to the Board of
Directors with the approval of a majority of the Continuing
Directors who were members of the Board of Directors at the
time of such nomination or election.
"Credit Facilities" means one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time, and includes any securities issued
pursuant to the Indenture in order to secure any amounts outstanding under a
Credit Facility from time to time; provided that the obligation of the Company
to make any payment on any such securities shall be (1) no greater than the
amount required to be paid under such Credit Facility that is secured by such
payment obligation, (2) payable no earlier than such amount is required to be
paid under such Credit Facility and (3) deemed to have been paid or otherwise
satisfied and discharged to the extent that the Company has paid such amount
under such Credit Facility; provided further that any amounts the Company is
obligated to pay under such securities will not be included for purposes of
determining the aggregate amount outstanding under Credit Facilities that is
permitted under clause (1) of Section 1(u)(ii)(B) ("Incurrence of Indebtedness
and Issuance of Preferred Stock").
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default as defined in the
Indenture.
"Definitive Note" means a certificated Series E Note registered in the
name of the Holder thereof and issued in accordance with Section 1(q)(v) of this
Officer's Certificate, in the form of Exhibit A hereto except that such Series E
Note shall not bear the Global Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Series E Notes issuable or
issued in whole or in part in global form, the Person specified in Section
1(q)(iii) of this Officer's Certificate as the Depositary with respect to the
Series E Notes, and any and all successors thereto appointed as depositary
hereunder and having become such pursuant to the applicable provision of this
Officer's Certificate or the Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event (other than as a result of an optional
redemption by the issuer thereof), matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Series E Notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the holders of the Capital Stock have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital
54
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 1(u)(i) of this Officer's Certificate (under the heading "Certain
Covenants and Definitions--Restricted Payments").
"DTC" has the meaning assigned to it in Section 1(q)(iii) of this
Officer's Certificate.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear Bank S.A./N.V.
"Event of Default" means an Event of Default as defined in the
Indenture.
"Excess Proceeds" has the meaning assigned to it in Section 1(u)(v)(D)
of this Officer's Certificate.
"Exchange Notes" means if and when issued, each series of the Series E
Notes issued in exchange for any Initial Notes in an Exchange Offer or upon
transfer pursuant to a Shelf Registration Statement.
"Exchange Offer" has the meaning set forth in a corresponding
Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under a Credit Facility) in existence on
the original issue date of the Series E Notes, until such amounts are repaid.
"First Mortgage Indenture" means the Indenture of Mortgage, dated as of
October 1, 1953, between the Company and Deutsche Bank, as trustee, as modified,
amended or supplemented at any time or from time to time by supplemental
indentures.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect
to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or
bankers' acceptance financings, and
55
net of the effect of all payments made or received pursuant
to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Series E Lien on assets of such
Person or one of its Restricted Subsidiaries, whether or not
such Guarantee or Series E Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of
such Person or any of its Restricted Subsidiaries, other than
dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to
the Company or a Restricted Subsidiary of the Company, times
(b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP; plus
(5) all distributions by a Trust Preferred Vehicle to persons
other than the Company of amounts received as interest by such
trust on the subordinated Indebtedness of the Company held by
such trust.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers,
consolidations or otherwise (including acquisitions of assets
used in a Permitted Business) and including any related
financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior
to
56
the Calculation Date shall be given pro forma effect as if
they had occurred on the first day of the four-quarter
reference period, including any pro forma expense and cost
reductions that have occurred or are reasonably expected to
occur, in the reasonable judgment of the chief financial
officer of the Company (regardless of whether those cost
savings or operating improvements could then be reflected in
pro forma financial statements in accordance with Regulation
S-X promulgated under the Securities Act or any other
regulation or policy of the Commission related thereto);
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation
Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving
rise to such Fixed Charges shall not be obligations of the
specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the original issue date of the Series E
Notes.
"Global Note Legend" means the legend set forth in Section
1(q)(v)(G)(2) of this Officer's Certificate, which is required to be placed on
all Global Notes issued under this Officer's Certificate.
"Global Notes" means, individually and collectively, each of the Series
E Notes (which may be either Restricted Global Notes or Unrestricted Global
Notes) issued or issuable in the global form of Exhibit A hereto issued in
accordance with Sections 1(q)(i), 1(q)(v)(B)(4), 1(q)(v)(D)(4) or 1(q)(v)(F) of
this Officer's Certificate.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person incurred in the normal course of business and
consistent with past practices and not for speculative purposes under:
57
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements designed to protect the
person or entity entering into the agreement against
fluctuations in interest rates with respect to Indebtedness
incurred and not for purposes of speculation;
(2) foreign exchange contracts and currency protection agreements
entered into with one of more financial institutions designed
to protect the person or entity entering into the agreement
against fluctuations in currency exchange rates with respect
to Indebtedness incurred and not for purposes of speculation;
(3) any commodity futures contract, commodity option or other
similar agreement or arrangement designed to protect against
fluctuations in the price of commodities used by that entity
at the time; and
(4) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency
exchange rates.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect
thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that
constitutes an accrued expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes (i) all Indebtedness of others secured by a Series E
Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any indebtedness of any other Person and
(ii) all beneficial interests issued by a Trust Preferred Vehicle to persons
other than the Company, which beneficial interests shall be treated as
Indebtedness that is subordinated to the Series E Notes for all purposes of this
Officer's Certificate.
The amount of any Indebtedness outstanding as of any date shall be:
58
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past
due, in the case of any other Indebtedness.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" has the meaning set forth in Section 1(q)(ii) of this
Officer's Certificate.
"Initial Purchaser" has the meaning set forth in the Purchase
Agreement.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Investment Grade Rating" means a rating equal to or higher than Baa3
(or the equivalent) by Moody's or BBB- (or the equivalent) by S&P.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in Section 1(u)(i)(C) of this Officer's
Certificate (under the heading "Certain Covenants and Definitions--Restricted
Payments"). The acquisition by the Company or any Subsidiary of the Company of a
Person that holds an Investment in a third Person shall be deemed to be an
Investment by the Company or such Subsidiary in such third Person in an amount
equal to the fair market value of the Investment held by the acquired Person in
such third Person in an amount determined as provided in Section 1(u)(i)(C) of
this Officer's Certificate (under the heading "Certain Covenants and
Definitions--Restricted Payments").
"Issue Date" means the first date on which any Series E Notes are
issued, authenticated and delivered under the Indenture and this Officer's
Certificate.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of Initial Notes for use by such Holders
in connection with an Exchange Offer.
59
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Moody's" means Moody's Investors Service, Inc. or any successor to
the rating agency business thereof.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection
with: (a) any Asset Sale; or (b) the disposition of any
securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of
its Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but
not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness, other than
Senior Debt secured by a Series E Lien on the asset or assets that were the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that
the holders of the Indebtedness may have to take enforcement
action against an Unrestricted Subsidiary) would permit upon
notice, lapse of time or both any holder of any other
Indebtedness (other than the Series E Notes) of the Company or
any of its Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its stated
maturity; and
60
(3) as to which the lenders have been notified in writing that
they shall not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a person who is not a U.S. Person.
"Note Custodian" means the Trustee, as custodian for the Depositary
with respect to the Series E Notes in global form, or any successor entity
thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offer Amount" has the meaning assigned to it in Section 1(h)(iv)(B) of
this Officer's Certificate.
"Offer Period" has the meaning assigned to it in Section 1(h)(iv)(B) of
this Officer's Certificate.
"Offering" means the offering of the Original Notes by the Company on
the Issue Date.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Original Notes" has the meaning set forth in Section 1(q)(ii) of this
Officer's Certificate.
"Participant" means, with respect to DTC, Euroclear or Clearstream, a
Person who has an account with DTC, Euroclear or Clearstream, respectively (and,
with respect to DTC, shall include Euroclear and Clearstream).
"Payment Default" has the meaning assigned to it in Section
1(h)(ii)(A)(6)(I) of this Officer's Certificate.
"Permitted Business" means any business that derives a majority of its
revenues from the business engaged in by the Company and its Restricted
Subsidiaries on the original issue date of the Series E Notes and/or activities
that are reasonably similar, ancillary, incidental, complementary or related to,
or a reasonable extension, development or expansion of, the businesses in which
the Company and its Restricted Subsidiaries are engaged on the original issue
date of the Series E Notes, as determined in good faith by the Board of
Directors.
"Permitted Investments" means:
61
(1) any Investment in the Company or in a Restricted Subsidiary
of the Company (other than a Receivables Entity);
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the
Company (other than a Receivables Entity); or
(b) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company
(other than a Receivables Entity);
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and
in compliance with Section 1(u)(v) of this Officer's
Certificate (under the heading "Certain Covenants and
Definitions--Asset Sales");
(5) any acquisition of assets to the extent it is in exchange for
the issuance of Equity Interests (other than Disqualified
Stock) of the Company;
(6) any Investments received in compromise of obligations of such
persons incurred in the ordinary course of trade creditors or
customers that were incurred in the ordinary course of
business, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any
trade creditor or customer;
(7) Hedging Obligations;
(8) Investments by the Company or a Restricted Subsidiary in a
Receivables Entity or any Investment by a Receivables Entity
in any other Person, in each case, in connection with a
Qualified Receivables Transaction, provided however, that any
Investment in any Receivables Entity or such other Person is
in the form of a Purchase Money Note, or any equity interests,
directly or indirectly, in accounts receivable and related
assets generated by the Company or a Restricted Subsidiary and
transferred to any Person in connection with a Qualified
Receivables Transaction or any such Person owning such
accounts receivable;
(9) any Investments made in accordance with clause (6) of the
definition of "Asset Sales;" and
(10) other Investments in any Person that is not also a Restricted
Subsidiary of the Company having an aggregate fair market
value (measured on the date each such Investment was made and
without giving effect to
62
subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (10) since the
original issue date of the Series E Notes, not to exceed $20.0
million.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the
Indebtedness extended, refinanced, renewed, replaced, defeased
or refunded (plus all accrued and unpaid interest on the
Indebtedness and the amount of all expenses and premiums
incurred in connection therewith);
(2) if such Permitted Refinancing Indebtedness is issued on or
after the first anniversary of the original issue date of the
Series E Notes, such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and
has a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(3) if such Permitted Refinancing Indebtedness is issued on or
after the first anniversary of the original issue date of the
Series E Notes, and the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is
contractually subordinated in right of payment to the Series E
Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Series E Notes on
terms at least as favorable to the Holders of Series E Notes
as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Private Placement Legend" means the legend set forth in Section
1(q)(v)(G)(1) of this Officer's Certificate to be placed on all Series E Notes
issued under the Indenture and this Officer's Certificate except where otherwise
permitted by the provisions of the Indenture and this Officer's Certificate.
"Purchase Agreement" means the Purchase Agreement dated October 22,
2002 among the Company and each Initial Purchaser relating to the Offering.
63
"Purchase Date" has the meaning assigned to it in Section 1(h)(iv)(B)
of this Officer's Certificate.
"Purchase Money Note" means a promissory note of a Receivables Entity
evidencing a line of credit, which may be irrevocable, from the Company or any
Restricted Subsidiary of the Company in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note is repayable from cash available
to the Receivables Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts owing
to such investors and amounts paid in connection with the purchase of newly
generated accounts receivable.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (1) a Receivables Entity (in the case
of a transfer by the Company or any of its Restricted Subsidiaries) and (2) any
other Person (in the case of a transfer by a Receivables Entity), or may grant a
security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, the proceeds of such receivables and
other assets which are customarily transferred, or in respect of which security
interests are customarily granted in connection with asset securitization
involving accounts receivable.
"Rating Agencies" means S&P and Moody's, or if S&P or Moody's or both
shall not make a rating on the Series E Notes publicly available, a nationally
recognized statistical rating agency or agencies, as the case may be, selected
by the Company (as certified by a resolution of the Board of Directors) which
shall be substituted for S&P or Moody's or both, as the case may be.
"Receivables Entity" means a Wholly-Owned Subsidiary of the Company or
Sierra Pacific Resources (or another Person in which the Company or any
Restricted Subsidiary of the Company makes an Investment and to which the
Company or any Restricted Subsidiary of the Company transfers accounts
receivable and related assets) which engages in no activities other than in
connection with the financing of accounts receivable and which is designated by
the Board of Directors (as provided below) as a Receivables Entity:
(1) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which:
(a) is guaranteed by the Company or any Restricted
Subsidiary of the Company (excluding guarantees of
Obligations (other than the
64
principal of, and interest on, Indebtedness) pursuant
to Standard Securitization Undertakings);
(b) is recourse to or obligates the Company or any
Restricted Subsidiary of the Company in any way other
than pursuant to Standard Securitization
Undertakings; or
(c) subjects any property or asset of the Company or any
Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard
Securitization Undertakings;
(2) which is not party to any agreement, contract, arrangement or
understanding (except in connection with a Purchase Money Note
or Qualified Receivables Transaction) with the Company or any
Restricted Subsidiary of the Company other than on terms no
less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons
that are not Affiliates of the Company, other than fees
payable in the ordinary course of business in connection with
servicing accounts receivable; and
(3) to which neither the Company nor any Restricted Subsidiary of
the Company has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain
or preserve such entity's financial condition or cause such
entity to achieve certain levels of operating results.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officer's Certificate certifying that
such designation complied with the foregoing conditions.
"Registration Rights Agreement" means (i) the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company and the other
parties named on the signature pages thereof relating to the Original Notes and
(ii) any similar agreement that the Company and other parties may enter into in
relation to any other Initial Notes, in each case as such agreement may be
amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in an initial denomination equal to the outstanding
principal amount of the Notes initially sold by the Initial Purchasers in
reliance on Rule 903 of Regulation S.
65
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payments" has the meaning assigned to it in Section
1(u)(i)(A) of this Officer's Certificate.
"Restricted Period" means the 40-day distribution compliance period as
set forth in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a Global Note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee,
issued in an initial denomination equal to the outstanding principal amount of
the Notes initially sold by the Initial Purchasers in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Securities Act" means the Security Act of 1933, as amended.
"Series E Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction.
"Series E Permitted Liens" means:
(1) Series E Liens securing any Indebtedness under a Credit
Facility that was permitted by the terms of this Officer's
Certificate to be incurred, and all Obligations and Hedging
Obligations relating to such Indebtedness;
(2) Series E Liens in favor of the Company or any Subsidiary
Guarantors;
66
(3) Series E Liens on property of a Person existing at the time
such Person is merged with or into or consolidated with the
Company or any Restricted Subsidiary of the Company; provided
that such Series E Liens were in existence prior to the
contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged
into or consolidated with the Company or the Restricted
Subsidiary;
(4) Series E Liens on property existing at the time of acquisition
of the property by the Company or any Restricted Subsidiary of
the Company, provided that such Series E Liens were in
existence prior to the contemplation of such acquisition;
(5) Series E Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or
other obligations of a like nature incurred in the ordinary
course of business;
(6) Series E Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 1(u)(ii)(B)(4) of this
Officer's Certificate ("Certain Covenants and
Definitions--Incurrence of Indebtedness and Issuance of
Preferred Stock") covering only the assets acquired with such
Indebtedness;
(7) Series E Liens existing on the original issue date of the
Series E Notes (including the Series E Lien of the First
Mortgage Indenture and the Series E Lien of the Indenture);
(8) Series E Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve
or other appropriate provision as is required in conformity
with GAAP has been made therefor;
(9) Series E Liens incurred in the ordinary course of business of
the Company or any Restricted Subsidiary with respect to
obligations (including Hedging Obligations) that do not exceed
$15.0 million at any one time outstanding;
(10) Series E Liens to secure Indebtedness permitted by clauses
(7), (13) or (16) of Section 1(u)(ii)(B) of this Officer's
Certificate (under the heading "Certain Covenants and
Definitions--Incurrence of Indebtedness and Issuance of
Preferred Stock");
(11) Series E Liens securing any other Indebtedness issued or to be
issued under the Indenture that was permitted to be incurred
under the terms of Section 1(u)(ii) of this Officer's
Certificate (under the heading "Certain Covenants-- Incurrence
of Indebtedness and Issuance of Preferred Stock");
67
(12) Series E Liens securing Permitted Refinancing Indebtedness
incurred to refinance Indebtedness that was previously so
secured, provided that any such Series E Lien is limited to
all or part of the same property or assets (plus improvements,
accessions, proceeds or dividends or distributions in respect
thereof) that secured (or, under the written arrangements
under which the original Series E Lien arose, could secure)
the Indebtedness being refinanced or is in respect of property
that is the security for a Series E Permitted Lien hereunder;
(13) Series E Liens on assets transferred to a Receivables Entity
or on assets of a Receivables Entity, in either case, incurred
in connection with a Qualified Receivables Transaction; and
(14) Series E Liens, including pledges, rights of offset and
bankers' liens, on deposit accounts, instruments, investment
accounts and investment property (including cash, cash
equivalents and marketable securities) from time to time
maintained with or held by any financial and/or depository
institutions, in each case solely to secure any and all
obligations now or hereafter existing of the Company or any of
its Subsidiaries in connection with any deposit account,
investment account or cash management service (including ACH,
Fedwire, CHIPS, concentration and zero balance accounts, and
controlled disbursement, lockbox or restricted accounts) now
or hereafter provided by any financial and/or depository
institutions to or for the benefit of the Company, any of its
Subsidiaries or any special purpose entity directly or
indirectly providing loans to or making receivables purchases
from the Company or any of its Subsidiaries.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"S&P" means Standard & Poor's Rating Group, Inc., or any successor to
the rating agency business thereof.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company which are reasonably customary in
securitization of accounts receivable transactions.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of
68
directors, managers or trustees of the corporation,
association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person (or a
combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that
Person or one or more Subsidiaries of that Person (or any
combination thereof).
"Subsidiary Guarantee" means any Guarantee of the Series E Notes to be
executed by any Subsidiary of the Company pursuant to Section 1(u)(ix) of this
Officer's Certificate (under the heading "Future Subsidiary Guarantees").
"Subsidiary Guarantors" means any Subsidiary of the Company that
executes a Subsidiary Guarantee in accordance with the provisions of the
Indenture, and their respective successors and assigns.
"Triggering Event" has the meaning assigned to it in Section 1(h) of
this Officer's Certificate.
"Trust Preferred Vehicle" means NVP Capital I, NVP Capital III or any
future similar trust, the only assets of which are subordinated Indebtedness of
the Company.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent Global Note in the form of
Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of
the Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect
obligation (a) to
69
subscribe for additional Equity Interests or (b) to maintain
or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company
or any of its Restricted Subsidiaries; and
(5) has at least one director on its Board that is not a director
or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is
not a director or executive officer of the Company or any of
its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 1(u)(i) of this Officer's
Certificate (under the heading "Certain Covenants and Definitions--Restricted
Payments"). If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 1(u)(ii) of this
Officer's Certificate (under the heading "Certain Covenants and
Definitions--Incurrence of Indebtedness and Issuance of Preferred Stock"), the
Company shall be in default of such covenant.
"U.S." means the United States of America.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including
payment at final maturity, in respect of the Indebtedness, by
(b) the number of years (calculated to the nearest
one-twelfth) that shall elapse between such date and the
making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
70
(v) The Series E Notes shall have such other terms and provisions as
are provided in the form thereof attached hereto as Exhibit A, and
shall be issued in substantially such form.
71
2. The undersigned has read all of the covenants and conditions
contained in the Indenture, and the definitions in the Indenture relating
thereto, relating to the issuance of the Series E Notes and in respect of
compliance with which this certificate is made.
The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.
In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.
In the opinion of the undersigned, such conditions and covenants have
been complied with.
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IN WITNESS WHEREOF, the undersigned has executed this Officer's
Certificate as of the date first written above.
By: ______________________________________
Richard K. Atkinson
Vice President, Investor Relations and
Treasurer
Acknowledged and Received on
October 29, 2002
THE BANK OF NEW YORK,
as Trustee
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
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EXHIBIT A
FORM OF SERIES E NOTES
[Insert the Global Note Legend, if applicable, pursuant to the provisions of
the Indenture and the Officer's Certificate]
[Insert the Private Placement Legend, if applicable, pursuant to the
provisions of the Indenture and the Officer's Certificate]
NEVADA POWER COMPANY
10(7/8)% General and Refunding Mortgage Notes, Series E, due 2009
Original Interest Accrual Date: October 29, 2002 Redeemable: Yes [X] No [ ]
Stated Maturity: October 15, 2009 Redemption Date: See Below
Interest Rate: 107/8% Redemption Price: See Below
Interest Payment Dates: April 15, and October 15
Record Dates: April 1 and October 1
The Security is not a Discount Security
within the meaning of the within-mentioned Indenture.
---------------
CUSIP/CINS__________
10(7/8)% General and Refunding Mortgage Notes, Series E, due 2009
No. ___ $__________
promises to pay to __________ or registered assigns, the principal sum of
_____________ Dollars on October 15, 2009.
1. Interest. Nevada Power Company, a Nevada corporation (the
"Company"), promises to pay interest on the principal amount of this Series E
Note at 10?% per annum, from October 29, 2002 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages, if any, semi-annually in arrears on April 15 and October 15 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Series E Notes shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from Original Interest Accrual Date specified above;
provided that if there is no existing Default in the payment of interest, and if
this Series E Note is authenticated between a record date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall accrue
from such next succeeding Interest Payment Date, except in the case of the
original issuance of Series E Notes, in which case interest shall accrue from
the Original Interest Accrual Date specified above; provided, further, that the
first Interest Payment Date shall be April 15, 2003. The Company shall pay
interest
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(including postpetition interest in any proceeding under the Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at the rate
borne on the Series E Notes; it shall pay interest (including post-petition
interest in any proceeding under the Bankruptcy Law) on overdue installments of
interest and Liquidated Damages, if any, (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment. The Company shall pay interest on the Series E
Notes (except Defaulted Interest) and Liquidated Damages to the Persons who are
registered Holders of Series E Notes at the close of business on the April 1 and
October 1 next preceding the Interest Payment Date, even if such Series E Notes
are canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 3.07 of the Indenture with respect to Defaulted
Interest. The Series E Notes shall be payable as to principal, premium and
Liquidated Damages, if any, and interest at the office or agency of the Company
maintained for such purpose within the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages may be made by
check mailed to the Holders of Series E Notes at their addresses set forth in
the register of Holders, and provided that payment by wire transfer of
immediately available funds shall be required with respect to principal of, and
interest, premium and Liquidated Damages on, all Global Notes and all other
Series E Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. Paying Agent and Security Registrar. Initially, The Bank of New
York, the Trustee under the Indenture, shall act as Paying Agent and Security
Registrar. The Company may change any Paying Agent or Security Registrar without
notice to any Holder of Series E Notes. The Company or any of its Subsidiaries
may act in any such capacity.
4. Indenture; Security. This Series E Note is one of a duly authorized
issue of Securities of the Company, issued and issuable in one or more series
under and equally secured by a General and Refunding Mortgage Indenture, dated
as of May 1, 2001 (such Indenture as originally executed and delivered and as
supplemented or amended from time to time thereafter, together with any
constituent instruments establishing the terms of particular Securities, being
herein called the "Indenture"), between the Company and The Bank of New York,
Trustee (herein called the "Trustee," which term includes any successor Trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the property mortgaged, pledged
and held in trust, the nature and extent of the security and the respective
rights, limitations of rights, duties and immunities of the Company, the Trustee
and the Holders of the Securities thereunder and of the terms and conditions
upon which the Securities are, and are to be, authenticated and delivered and
secured. The acceptance of this Series E Note shall be deemed to constitute the
consent and agreement by the Holder hereof to all of the terms and provisions of
the Indenture. This Series E Note is one of the series designated above. The
terms of the Series E Notes include those stated in the Indenture, the Officer's
Certificate dated October 29, 2002 (the "Officer's Certificate") and those made
part of the Indenture by reference to the Trust Indenture Act. The Series E
Notes are subject to all such terms, and Holders of Series E Notes are referred
to the Indenture and such Act for a statement
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of such terms. To the extent any provision of this Series E Note conflicts with
the express provisions of the Indenture or the Officer's Certificate, the
provisions of the Indenture and the Officer's Certificate shall govern and be
controlling. The Series E Notes are general obligations of the Company initially
limited to $250,000,000 aggregate principal amount in the case of Series E Notes
issued on the Issue Date.
All Outstanding Securities, including the Series E Notes, issued under
the Indenture are secured by the lien of the Indenture on the properties of the
Company described in the Indenture. The lien of the Indenture is junior, subject
and subordinate to the prior lien of the Indenture of Mortgage dated as of
October 1, 1953 between the Company and Deutsche Bank, as trustee.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this paragraph
5, the Series E Notes shall not be redeemable at the Company's option prior to
October 15, 2006. Thereafter, the Series E Notes shall be subject to redemption
at any time or from time to time at the option of the Company, in whole or in
part, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the applicable redemption date, if redeemed during the twelve-month
period beginning on May 1 of the years indicated below:
YEAR PERCENTAGE
- ---- ----------
2006................................... 105.438%
2007................................... 102.719%
2008 thereafter........................ 100.000%
(b) Notwithstanding the foregoing, at any time or from time to
time on or prior to October 15, 2005, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Series E Notes
at a Redemption Price of 110.875% of the principal amount thereof, plus accrued
and unpaid interest, if any, and Liquidated Damages thereon, if any, to the
Redemption Date, with the net cash proceeds of any public or private offerings
of its Equity Interests or capital contribution to the Company's equity made
with net cash proceeds of an offering by Sierra Pacific Resources; provided that
at least 65% of the aggregate principal amount of Series E Notes remain
outstanding immediately after each occurrence of such redemption excluding
Series E Notes held by the Company and its Subsidiaries; and provided, further,
that each such redemption shall occur within 120 days of the date of the closing
of such offering.
6. Notice of Optional Redemption. Notice of optional redemption shall
be mailed at least 30 days but not more than 60 days before the Redemption Date
to each Holder whose Series E Notes are to be redeemed at its registered
address. Series E Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Series E Notes
held by a Holder are to be redeemed. On and after the redemption date, interest
and Liquidated Damages, if any, cease to accrue on Series E Notes or portions
thereof called for redemption.
7. Mandatory Redemption.
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(a) Other than in connection with clause (b) below or in
connection with a redemption at the option of the Holders of the Series E Notes,
the Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Series E Notes.
(b) Upon the occurrence of the events described below in
clauses (1) or (2) of this paragraph 7(b), the Company shall be required to
redeem the Series E Notes immediately, at a Redemption Price equal to 100% of
the aggregate principal amount of the Series E Notes plus accrued and unpaid
interest and Liquidated Damages, if any, on the Series E Notes to the date of
redemption, without further action or notice on the part of the Trustee or the
Holders of the Series E Notes:
(1) the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(I) commences a voluntary case,
(II) consents to the entry of an order for relief
against it in an involuntary case,
(III) consents to the appointment of a custodian
of it or for all or substantially all of its
property,
(IV) makes a general assignment for the benefit
of its creditors, or
(V) admits in writing of its inability to pay
its debts generally as they become due; or
(2) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(I) is for relief against the Company or any of
its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a
Significant Subsidiary in an involuntary
case;
(II) appoints a custodian of the Company or any
of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries
that, taken as a whole, would constitute a
Significant Subsidiary or for all or
substantially all of the property of the
Company or any of its Subsidiaries that is
a Significant Subsidiary or any group of
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; or
(III) orders the liquidation of the Company or any
of its Subsidiaries that is a Significant
Subsidiary or any group of Restricted
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Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
8. Redemption at the Option of Holders. Upon the occurrence of any of
the following Triggering Events: (a) failure for 30 days to pay when due
interest on, or Liquidated Damages with respect to, the Series E Notes; (b)
failure to pay when due the principal of, or premium, if any, on the Series E
Notes; (c) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions described in Sections 1(u)(i), 1(u)(ii) or 1(u)(vi)
of the Officer's Certificate; (d) failure by the Company or any of its
Restricted Subsidiaries for 30 days after notice to comply with the provisions
described in Section 1(h)(iii) or (iv) of the Officer's Certificate; (e) failure
by the Company or any of its Restricted Subsidiaries for 60 days after notice to
comply with any of the other agreements in the Officer's Certificate or the
Series E Notes; (f) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the original issue date of the Series E Notes, if that default
(i) is caused by a failure to pay principal of, or interest or premium, if any,
on such Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "Payment Default") or (ii)
results in the acceleration of such Indebtedness prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$15.0 million or more; (g) failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of $15.0 million, which judgments are
not paid, discharged or stayed for a period of 60 days; or (h) an event of
default under the First Mortgage Indenture (other than any such matured event of
default which (i) is of similar kind or character to the Triggering Event
described in (c) or (e) above and (ii) has not resulted in the acceleration of
the securities outstanding under the First Mortgage Indenture); provided,
however, that, anything in the Officer's Certificate to the contrary
notwithstanding, the waiver or cure of such event of default under the First
Mortgage Indenture and the rescission and annulment of the consequences thereof
under the First Mortgage Indenture shall constitute a cure of the corresponding
Triggering Event and a rescission and annulment of the consequences thereof, the
Holders of at least 25% in principal amount of the Series E Notes then
Outstanding may deliver a notice to the Company requiring the Company to redeem
the Series E Notes immediately at a Redemption Price equal to 100% of the
aggregate principal amount of the Series E Notes plus accrued and unpaid
interest and Liquidated Damages, if any, on the Series E Notes to the Redemption
Date. The Holders of a majority in aggregate principal amount of the Series E
Notes then Outstanding by notice to the Company and the Trustee may on behalf of
the Holders of all of the Series E Notes waive any existing Triggering Event and
its consequences except a continuing Triggering Event related to the payment of
interest or Liquidated Damages on, or the principal of, the Series E Notes. In
the case of any Triggering Event occurring on or after October 15, 2006 by
reason of any willful action or inaction taken or not taken by or on behalf of
the Company with the intention of avoiding payment of the premium that the
Company would have had to pay if the Company then
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had elected to redeem the Series E Notes pursuant to the provisions of Section
1(g)(i) of the Officer's Certificate relating to redemption at the option of the
Company, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law upon the redemption of the Series E Notes
at the option of the Holders thereof. If a Triggering Event occurs prior to
October 15, 2006, by reason of any willful action or inaction taken or not taken
by or on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Series E Notes prior to October 15, 2006, then the premium
specified in Section 1(g)(ii) of the Officer's Certificate shall also become
immediately due and payable to the extent permitted by law upon the redemption
of the Series E Notes at the option of the Holders thereof. Upon becoming aware
of any Triggering Event, the Company shall deliver to the Trustee a statement
specifying such Triggering Event.
9. Original Issue Discount. The Series E Notes have been issued with
original issue discount ("OID") for United Stated federal income tax purposes.
Upon written request, a representative of the Company will, beginning no later
than 10 days after the Original Interest Accrual Date, promptly inform a Holder
of the Series E Notes of the amount of OID as well as the issue price, the
Original Interest Accrual Date and yield to Maturity of the Series E Notes.
Holders may contact Nevada Power Company, P.O. Box 230, 6226 W. Sahara Avenue,
Las Vegas, Nevada 89146, Attention: Treasurer.
10. Denominations, Transfer, Exchange. The Series E Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Series E Notes may be registered and Series
E Notes may be exchanged as provided in the Indenture and the Officer's
Certificate. The Security Registrar and the Trustee may require a Holder of
Series E Notes, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder of Series E Notes to pay
any taxes and fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Series E Note or portion of a
Series E Note selected for redemption, except for the unredeemed portion of any
Series E Note being redeemed in part. Also, it need not exchange or register the
transfer of any Series E Notes for a period of 15 days before a selection of
Series E Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a Series E Note
may be treated as its owner for all purposes.
12. Amendment, Supplement and Waiver. The Indenture permits, with
certain exceptions as therein provided, the Trustee to enter into one or more
supplemental indentures for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, the Indenture with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Securities of all series then Outstanding under the Indenture, considered
as one class; provided, however, that if there shall be Securities of more than
one series Outstanding under the Indenture and if a proposed supplemental
indenture shall directly affect the rights of the Holders of Securities of one
or more, but less than all, of such series, then the consent only of the Holders
of a majority in aggregate principal amount of the Outstanding Securities of all
series so directly affected, considered as one class, shall be required; and
provided, further, that if the Securities of any series shall have been issued
in more than one
A-6
Tranche and if the proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so directly
affected, considered as one class, shall be required; and provided, further,
that the Indenture permits the Trustee to enter into one or more supplemental
indentures for limited purposes without the consent of any Holders of
Securities. The Indenture also contains provisions permitting the Holders of a
majority in principal amount of the Securities then Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Series E
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Series E Note and of any Series E Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Series E
Note.
13. Events of Default. If an Event of Default shall occur and be
continuing, the principal of this Series E Note may be declared due and payable
in the manner and with the effect provided in the Indenture.
14. No Recourse Against Others. As provided in the Indenture, no
recourse shall be had for the payment of the principal of or premium, if any, or
interest on any Securities, or any part thereof, or for any claim based thereon
or otherwise in respect thereof, or of the indebtedness represented thereby, or
upon any obligation, covenant or agreement under the Indenture, against, and no
personal liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, as such, past, present or future
of the Company or of any predecessor or successor corporation (either directly
or through the Company or a predecessor or successor corporation), whether by
virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly agreed
and understood that the Indenture and all the Securities are solely corporate
obligations and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of the Indenture and the issuance of the Securities.
15. Authentication. Unless the certificate of authentication
hereon has been executed by the Trustee or an Authenticating Agent by manual
signature, this Series E Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
16. Transfer and Exchange.
(a) As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Series E Note is registrable
in the Security Register, upon surrender of this Series E Note for registration
of transfer at the Corporate Trust Office of The Bank of New York in New York,
New York or such other office or agency as may be designated by the Company from
time to time, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Series E Notes of this series of authorized
denominations and of like tenor and aggregate principal amount, will be issued
to the designated transferee or transferees.
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(b) No service charge shall be made for any such registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(c) Prior to due presentment of this Series E Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Series E Note is
registered as the absolute owner hereof for all purposes, whether or not this
Series E Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
17. Governing Law. THE SERIES E NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Definition of "Business Day" and Other Terms. As used herein,
"Business Day" shall mean any day, other than Saturday or Sunday, on which
commercial banks are open for business, including dealings in deposits in U.S.
dollars, in New York. All other terms used in this Series E Note which are
defined in the Indenture or the Officer's Certificate shall have the meanings
assigned to them in the Indenture or the Officer's Certificate, as applicable,
unless otherwise indicated.
19. Abbreviations. Customary abbreviations may be used in the name of a
Holder of Series E Notes or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
20. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Series E Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of October 29, 2002 between Nevada Power
Company and the parties named on the signature pages thereof (the "Registration
Rights Agreement").
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Series E Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders of Series E Notes.
No representation is made as to the accuracy of such numbers either as printed
on the Series E Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder of Series E Notes upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
Nevada Power Company
P.O. Box 230
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Attention: Treasurer.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
NEVADA POWER COMPANY
By: _________________________
Richard K. Atkinson
Vice President, Investor Relations
And Treasurer
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: October __, 2002
THE BANK OF NEW YORK, as Trustee
By: _______________________________
Authorized Signatory
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE***
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
- -------------- -------------- -------------- -------------- ---------------
PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF THIS SIGNATURE OF
DECREASE IN INCREASE IN GLOBAL NOTE AUTHORIZED
PRINCIPAL PRINCIPAL FOLLOWING SUCH SIGNATORY OF
DATE OF AMOUNT OF THIS AMOUNT OF THIS DECREASE (OR TRUSTEE OR NOTE
EXCHANGE GLOBAL NOTE GLOBAL NOTE INCREASE) CUSTODIAN
- -------------- -------------- -------------- -------------- ---------------
- --------------------------
*** This should be included only if the Note is issued in global form.
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NOTATION OF SUBSIDIARY GUARANTEES
Payment of principal of, and premium, if any, interest and Liquidated
Damages, if any, on, this Series E Note is jointly, severally, and
unconditionally guaranteed on a senior basis to the extent and in the manner set
forth in the Indenture by the Guarantors who have become parties to the
Indenture, including the Guarantors duly endorsing this notation. Subsidiary
Guarantees are subject to release under circumstances set forth in the
Indenture.
[Insert Names of Guarantors]
By [ ]
Attorney in fact for each of the Guarantors
By:__________________________________________________
Name:
Title:
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ASSIGNMENT FORM
To assign this Series E Note, fill in the form below:
(I) or (we) assign and transfer this Series E Note
to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Series E Note on the books of the Company. The agent may
substitute another to act for him.
- -------------------------------------------------------------------------------
Date:
Your Signature:________________________________________________________________
(Sign exactly as your name appears on the face of this Series E Note)
SIGNATURE GUARANTEE
- -------------------------------------------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Security Registrar, which
requirements include membership or
participation in the Security
Transfer Agent Medallion Program
("STAMP") or such other "signature
guarantee program" as may be
determined by the Security Registrar
in addition to, or in substitution
for, STAMP, all in accordance with
the Securities Exchange Act of 1934,
as amended.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Series E Note purchased by the
Company pursuant to Section 1(h)(iii) (Offer to Purchase upon Change of Control)
or 1(h)(iv) (Offer to Purchase Upon Application of Excess Proceeds) of the
Officer's Certificate, check the box below:
[ ] Section 1(h)(iii) (Offer to Purchase [ ] Section 1(h)(iv)(Offer to
upon Change of Control) Purchase Upon Application
of Excess Proceeds)
If you want to elect to have only part of the Series E Note purchased
by the Company pursuant to Section 1(h)(iii) (Offer to Purchase upon Change of
Control) or 1(h)(iv) (Offer to Purchase Upon Application of Excess Proceeds) of
the Indenture, state the amount you elect to have purchased:
$___________________________
Date:
Your Signature: _______________________________________________________________
(Sign exactly as your name appears on the face of the Series E Note)
Tax Identification No.:________________________________________________________
SIGNATURE GUARANTEE
- -------------------------------------------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Security Registrar, which
requirements include membership or
participation in the Security
Transfer Agent Medallion Program
("STAMP") or such other "signature
guarantee program" as may be
determined by the Security Registrar
in addition to, or in substitution
for, STAMP, all in accordance with
the Securities Exchange Act of 1934,
as amended.
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Nevada Power Company
P.O. Box 230
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Attention: Treasurer
The Bank of New York
101 Barclay Street, Floor 21W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Nevada Power Company 10?% General and Refunding Mortgage Notes,
Series E, due 2009
Reference is hereby made to the General and Refunding Mortgage
Indenture, dated as of May 1, 2001, as amended or supplemented (the
"Indenture"), between Nevada Power Company, as issuer (the "Company") and The
Bank of New York, as trustee and the Officer's Certificate dated October 29,
2002 governing the Note[s] (the "Officer's Certificate"). Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture
and the Officer's Certificate.
____________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such in such Note[s] specified in Annex A hereto, in
the principal amount of $__________ in such Note[s] or interests (the
"Transfer"), to ____________________ (the "Transferee"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby certifies
that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A.
The Transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note shall be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the 144A Global Note and/or the
Definitive Note and in the Officer's Certificate and the Securities Act.
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2. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act and (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture and the Officer's Certificate, the transferred beneficial
interest or Definitive Note shall be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Note and/or the Definitive Note and in the Officer's Certificate and the
Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE SHALL TAKE DELIVERY OF A
DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE
144A OR REGULATION S. The Transfer is being effected in compliance with the
transfer restrictions applicable to beneficial interests in Restricted Global
Notes and Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act; or
(d) [ ] such Transfer is being effected to an accredited
investor within the meaning of Rule (501)(a)(1), (2), (3) or (7) under the
Securities Act ("Institutional Accredited Investor") or pursuant to another
exemption from the registration requirements of the Securities Act other than
Rule 144A, Rule 144 or Rule 904, and the Transferor hereby certifies that the
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Transfer complies with the transfer restrictions applicable to beneficial
interests in a Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported by (1)
if the Transfer is to an Institutional Accredited Investor, a certificate
executed by the Transferee in the form of Exhibit D to the Officer's Certificate
and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certificate) to the effect
that such Transfer is in compliance with the Securities Act (provided that an
Opinion of Counsel need not be furnished in respect of Transfers of a principal
amount of Notes of $250,000 or more at the time of Transfer to an Institutional
Accredited Investor who furnishes the certificate set forth in (1) above). Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture and the Officer's Certificate, the transferred beneficial interest or
Definitive Note shall be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Global Note and/or the Definitive
Notes and in the Officer's Certificate and the Securities Act.
4. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture, the
Officer's Certificate and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture and the
Officer's Certificate, the transferred beneficial interest or Definitive Note
shall no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Officer's Certificate.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and the Officer's Certificate and any applicable blue
sky securities laws of any state of the United States and (ii) the restrictions
on transfer contained in the Indenture and the Officer's Certificate and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture and the Officer's Certificate, the transferred
beneficial interest or Definitive Note shall no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the Officer's
Certificate.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and the Officer's Certificate and any applicable blue sky
securities laws of any State of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Officer's Certificate and the
Private Placement
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Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture and the Officer's Certificate, the transferred beneficial interest or
Definitive Note shall not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Officer's Certificate.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
- ---------------------------------------------------
[Insert Name of Transferor]
By:________________________________________________
Name:
Title:
Dated:_____________________________________________
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(ii) [ ] 144A Global Note (CUSIP ___________), or
(ii) [ ] Regulation S Global Note (CUSIP ___________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee shall hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ___________), or
(ii) [ ] Regulation S Global Note (CUSIP ___________), or
(iii) [ ] Unrestricted Global Note (CUSIP ___________); or
(b) [ ] a Restricted Definitive Note.
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture and the Officer's Certificate.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Nevada Power Company
P.O. Box 230
6226 W. Sahara Avenue
Attention: Treasurer
Las Vegas, Nevada 89146
The Bank of New York
101 Barclay Street, Floor 21W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Nevada Power Company 10 7/8% General and Refunding Mortgage Notes,
Series E, due 2009
(CUSIP ____________)
Reference is hereby made to the General and Refunding Mortgage
Indenture, dated as of May 1, 2001, as amended or supplemented (the
"Indenture"), between Nevada Power Company, as issuer (the "Company") and The
Bank of New York, as trustee, and the Officer's Certificate dated October 29,
2002 governing the Note[s] (the "Officer's Certificate"). Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture
and the Officer's Certificate.
____________________ (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$______________ in such Note[s] or interests (the "Exchange"). In connection
with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture, the Officer's Certificate and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global Note
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is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture, the Officer's Certificate and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficiary interest in
an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture, the Officer's Certificate and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture, the Officer's Certificate and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
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accordance with the terms of the Indenture and the Officer's Certificate, the
Restricted Definitive Note issued shall continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Officer's Certificate and the
Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the
[CHECK ONE]
[ ] 144A Global Note [ ] Regulation S Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture and the Officer's
Certificate, the beneficial interest issued shall be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Officer's Certificate and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-------------------------------
[Insert Name of Owner]
By:____________________________
Name:
Title:
Dated:________________________
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EXHIBIT D
FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Nevada Power Company
P.O. Box 230
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Attention: Treasurer
The Bank of New York
101 Barclay Street, Floor 21W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Nevada Power Company 10 7/8% General and Refunding Mortgage Notes,
Series E, due 2009
Reference is hereby made to the General and Refunding Mortgage
Indenture, dated as of May 1, 2001, as amended or supplemented (the
"Indenture"), among Nevada Power Company, as issuer (the "Company") and The Bank
of New York, as trustee, and the Officer's Certificate dated October 29, 2002
governing the Notes (the "Officer's Certificate"). Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture and
the Officer's Certificate.
In connection with our proposed purchase of $______________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. we are an "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule (501)(a)(1), (2), (3)
or (7) under the Securities Act (an "institutional accredited
investor");
2. (i)(A) any purchase of the Notes by us shall be for our own account or
for the account of one or more other institutional accredited
investors or as fiduciary for the account of one or more trusts, each
of which is an "accredited investor" within the meaning of Rule
501(a)(7) under the Securities Act and for each of which we exercise
sole investment discretion or (B) we are a "bank," within the meaning
of Section 3(a)(2) of the Securities Act, or a "savings and loan
association" or other institution described in Section 3(a)(5)(A) of
the Securities Act that is acquiring Notes as fiduciary for the
account of one or more institutions for which we exercise sole
investment discretion;
D-1
3. in the event that we purchase any Notes, we shall acquire Notes having
a minimum purchase price of not less than $250,000 for our own
account and for each separate account for which we are acting;
4. we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing Notes;
5. we are not acquiring the Notes with a view to any distribution thereof
in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other
applicable jurisdictions, provided that the disposition of our property
and the property of any accounts for which we are acting as fiduciary
shall remain at all times within our control;
6. we have received a copy of the Offering Memorandum relating to the
offering of the Notes and acknowledge that we have had access to such
financial and other information, and have been afforded the opportunity
to ask such questions of representatives of the Company and receive
answers thereto, as we deem necessary in connection with our decision
to purchase the Notes; and
7. (vii)(a) we are not an employee benefit plan or other arrangement that
is subject to the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended, or an entity whose underlying assets include assets of such a
plan or arrangement (pursuant to 29 C.F.R. Section 2510.3-101 or
otherwise), and we are not purchasing (and shall not hold) the Notes
on behalf of, or with the assets of, any such plan, arrangement or
entity; or (b) our purchase and holding of the Notes are completely
covered by the full exemptive relief provided by U.S. Department of
Labor Prohibited Transaction Class Exemption 96-23, 95-60, 91-38,
90-1 or 84-14.
We understand that the Notes were offered in a transaction not
involving any public offering in the United States within the meaning of the
Securities Act and that the Notes have not been registered under the Securities
Act or any state securities laws, and they were offered for resale in
transactions not requiring registration under the Securities Act. We agree on
our own behalf and on behalf of any investor account for which we are purchasing
the Notes, and each subsequent holder of the Notes by its acceptance of the
Notes will agree, to offer, sell or otherwise transfer such notes prior to (x)
the date which is two years (or such shorter period of time as permitted by Rule
144(k) under the Securities Act or any successor provision thereunder) after the
later of the date of the original issue of the Notes and the last date on which
the Company or any of its affiliates were the owner of such Notes (or any
predecessor thereto) or (y) such later date, if any, as may be required by
applicable law (the "Resale Restriction Termination Date") only: (1) to the
Company; (2) pursuant to a registration statement which has been declared
effective under the Securities Act; (3) for so long as the Notes are eligible
for resale pursuant to Rule 144A, to a person it reasonably believes is a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the transfer is being made in
reliance on Rule 144A; (4) pursuant to offers and sales to non-U.S. persons that
occur outside the United States within the meaning of Regulation S under the
Securities Act; or (5) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in
D-2
each of the foregoing cases to any requirements of law that the disposition of
its property or the property of such investor account or accounts be at all
times within its or their control and in compliance with any applicable state
securities laws. Subject to the procedures set forth under Section 1(q)(v) of
the Officer's Certificate, prior to any proposed transfer of the Notes
(otherwise than pursuant to an effective registration statement) within the
period referred to in Rule 144(k) under the Securities Act with respect to such
transfer, the Holder of the Notes must check the appropriate box set forth on
the reverse of its Notes relating to the manner of such transfer and submit the
Notes to the trustee. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. We acknowledge that the
Company, the trustee and the transfer agent and security registrar reserve the
right prior to any offer, sale or other transfer pursuant this paragraph, prior
to the end of the restrictive periods described in clauses (x) and (y) above, to
require the delivery of an opinion of counsel, certifications and/or other
information satisfactory to the Company, the trustee and the security registrar.
We further understand that any Notes we receive shall be in the form of
definitive physical certificates and that such certificates shall bear a legend
reflecting the substance of this paragraph.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
We acknowledge that you and the Company shall rely upon the
truth and accuracy of our acknowledgments, confirmations and agreements in this
letter. Further, we acknowledge and agree that you and the Company are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or, official inquiry with
respect to the matters covered hereby.
----------------------------------------
[Insert Name of Accredited Investor]
By:______________________________________
Name:
Title:
Dated:________________________
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