EXHIBIT 4.1
NEVADA POWER COMPANY
OFFICER'S CERTIFICATE
August 18, 2003
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
June 26, 2003, 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 "equally-ranked"
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 seventh series to be issued under the
Indenture shall be designated "9% General and Refunding Mortgage Notes,
Series G, due 2013" (the "Series G Notes").
(b) There shall be no limit upon the aggregate principal amount of
the Series G Notes that may be authenticated and delivered under the
Indenture. The Series G Notes shall be initially authenticated and
delivered in the aggregate principal amount of $350,000,000.
(c) Interest on the Series G 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 G Notes shall mature and the principal thereof
shall be due and payable together with all accrued and unpaid interest
thereon on August 15, 2013.
(e) The Series G Notes shall bear interest as provided in the form
of such Securities attached hereto as Exhibit A.
(f) If a Holder of Series G Notes has given wire transfer
instructions to the Company 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 G
Notes in accordance with such instructions. The Corporate Trust Office
of The Bank of New York in New York, New
NPC Officer's Certificate (Terms of Note)
York shall be the place at which (i) the principal, interest and
premium and Liquidated Damages, if any, on the Series G 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 G
Notes may be effected, (iii) exchanges of the Series G Notes may be
effected and (iv) notices and demands to or upon the Company in respect
of the Series G Notes and the Indenture may be served; and The Bank of
New York shall be the Security Registrar for the Series G 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 or any of its
Subsidiaries as the Security Registrar; provided, however, that there
shall be only a single Security Registrar for the Series G Notes.
(g) Optional Redemption.
(i) Optional Redemption. Except as set forth in clause
(ii) of this Section 1(g), the Series G Notes shall not be redeemable
at the Company's option prior to August 15, 2008. On and after August
15, 2008, the Company may redeem all or a part of the Series G 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 G Notes redeemed, to the applicable Redemption Date, if redeemed
during the twelve-month period beginning on August 15 of the years
indicated below:
YEAR PERCENTAGE
- ------------------- ----------
2008 104.5%
2009 103.0%
2010 101.5%
2011 and thereafter 100.0%
(ii) Equity Claw-back. Notwithstanding the foregoing, at
any time prior to August 15, 2006, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of the
Series G Notes at a Redemption Price of 109% 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 G Notes remains
outstanding immediately after the occurrence of such redemption
(excluding Series G 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.
(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 G Notes to be redeemed at
its registered address, except that redemption
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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 G
Notes or a satisfaction and discharge of the Series G Notes under the
Indenture. Notices of redemption may not be conditional.
(iv) Selection of Series G Notes to be Redeemed. In
accordance with Section 5.03 of the Indenture, the following method is
provided for the selection of Series G Notes to be redeemed and these
procedures shall be followed by the Security Registrar in the event of
a redemption of the Series G Notes pursuant to the provisions of this
Officer's Certificate. If less than all of the Series G Notes are to be
redeemed at any time, the Security Registrar shall select Series G
Notes for redemption as follows:
(A) if the Series G Notes are listed on any national
securities exchange, in compliance with the
requirements of the principal national securities
exchange on which the Series G Notes are listed; or
(B) if the Series G 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 G 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 G 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 G Notes immediately, at a Redemption
Price equal to 100% of the aggregate principal amount of the Series G
Notes plus accrued and unpaid interest and Liquidated Damages, if any,
on the Series G Notes to the date of redemption, without further action
or notice on the part of the Trustee or the Holders of the Series G
Notes:
(1) the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries
that, taken together, 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,
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(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 G
Notes;
(2) failure to pay when due the principal of, or premium,
if any, on the Series G 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
Officer's Certificate (under the headings "Certain
Covenants and Definitions--Restricted Payments,"
"Certain Covenants and Definitions--
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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 G 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 G 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 constitute a
cure of the corresponding Triggering Event and a
rescission and annulment of the consequences thereof,
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the Holders of Series G Notes of at least 25% in principal amount of
the Series G Notes then Outstanding may deliver a notice to the Company
requiring the Company to redeem the Series G Notes immediately at a
Redemption Price equal to 100% of the aggregate principal amount of the
Series G Notes plus accrued and unpaid interest and Liquidated Damages,
if any, on the Series G Notes to the Redemption Date.
(B) The Holders of a majority in aggregate principal
amount of the Series G Notes then outstanding by notice to the Company
and the Trustee may on behalf of the Holders of all of the Series G
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 G Notes.
(C) In the case of any Triggering Event occurring on or
after August 15, 2008 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 G 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 G Notes at
the option of the Holders thereof. If a Triggering Event occurs prior
to August 15, 2008, 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 G Notes prior to
August 15, 2008, then the premium specified in Section 1(g)(ii) of this
Officer's Certificate shall also become immediately due and payable to
the extent permitted by law upon the redemption of the Series G 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 G 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 G 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 G Notes repurchased
plus accrued and unpaid interest and Liquidated Damages, if any, on the
Series G 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 G Notes stating:
(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
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Section 1(h)(iii), and that all Series G 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 G 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 G 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 G Notes electing to have any
Series G Notes purchased pursuant to a Change of
Control Offer shall be required to surrender the
Series G Notes properly endorsed, with the form
entitled "Option of Holder to Elect Purchase" on the
reverse of the Series G 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 G 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 G Notes delivered for
purchase, and a statement that such Holder of Series
G Notes is withdrawing its election to have the
Series G Notes purchased; and
(7) that Holders of Series G Notes whose Series G Notes
are being purchased only in part shall be issued new
Series G Notes equal in principal amount to the
unpurchased portion of the Series G 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 G 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 G Notes
or portions thereof properly tendered pursuant to the Change of Control
Offer, (2) deposit with the Paying Agent in immediately available funds
an amount equal to the Change of Control Payment in respect of all
Series G Notes or portions thereof so tendered and (3) deliver or cause
to be
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delivered to the Trustee the Series G Notes so accepted together with
an Officer's Certificate stating the aggregate principal amount of
Series G Notes or portions thereof being purchased by the Company. The
Paying Agent shall promptly mail to each Holder of Series G Notes so
tendered the Change of Control Payment for such Series G Notes, and the
Trustee shall promptly authenticate and make available for delivery to
each Holder of Series G Notes a new Series G Note equal in principal
amount to any unpurchased portion of the Series G Notes surrendered, if
any; provided that each such new Series G Note shall be in a principal
amount of $1,000 or an integral multiple thereof. Any Series G 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 G
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 G Notes, and all holders of other Indebtedness
that is equally-ranked with the Series G 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 G Notes and such
other equally-ranked 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 G Notes and other equally-ranked
Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee shall select the Series G Notes and such
other equally-ranked Indebtedness to be purchased on a pro rata basis.
The Company shall advise the Trustee of such other equally-ranked
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 G 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 G 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 G 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 G 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 G 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 G Notes electing to have a
Series G Note purchased pursuant to any Asset Sale
Offer shall be required to surrender the Series G
Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Series G 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 G 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 G Notes delivered for purchase, and a
statement that such Holder of Series G Notes is
withdrawing its election to have the Series G Notes
purchased;
(7) that, if the aggregate principal amount of Series G
Notes surrendered by Holders of Series G Notes
exceeds the Offer Amount, the Trustee shall select
the Series G Notes to be purchased on a pro rata
basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Series G
Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and
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(8) that Holders of Series G Notes whose Series G Notes
are being purchased only in part shall be issued new
Series G 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 G 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 G Notes or portions
thereof tendered pursuant to the Asset Sale Offer, or if less than the
Offer Amount has been tendered, all Series G Notes tendered, and shall
deliver to the Trustee an officer's certificate stating that such
Series G 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 G Notes an amount equal to the purchase price of the Series G
Notes tendered by such Holder of Series G Notes and accepted by the
Company for purchase, and the Company shall promptly issue a new Series
G Note, and the Trustee, upon written request from the Company, shall
authenticate and make available for delivery such new Series G Note to
such Holder of Series G Notes, in a principal amount equal to any
unpurchased portion of the Series G Note surrendered; provided that
each such new Series G Note shall be in a principal amount of $1,000 or
an integral multiple thereof. Any Series G 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 G
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 G Notes who tender Series G 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 G 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 G Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto.
The Series G Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Series G Note shall be dated
the date of its authentication. The Series G Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Series G 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 G 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 G 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 G 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 G 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 G
Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Series G 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 G 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 G
Notes for original issue on the Issue Date in the aggregate principal
amount of $350,000,000 (the "Original Notes"), (B) additional Series G
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 G 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 G Notes to be authenticated and the date of original
issue thereof, (y) whether the Series G Notes are Initial Notes or
Exchange Notes and (z) the amount of Series G Notes to be issued in
global form or definitive form. The aggregate principal amount of
Series G Notes outstanding at any time may not exceed $350,000,000 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 G Notes. Upon the
occurrence of an 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 G Notes. The Company shall maintain a Place
of Payment for the Series G 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 G
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 G 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 G 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 G 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 G 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 G 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 G 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 G
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 G
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 G 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 G 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 G 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 G 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 G 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 G 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 G 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 G 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 G 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
G 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, 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 G 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 G 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 G Notes.
Notwithstanding the definition of "Outstanding" in Section
1.01 of the Indenture, Series G 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 G Notes
passes to the Company, such Subsidiary or such Affiliate, as the case
may be.
26
(r) Not applicable.
(s) The Series G 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 G 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 G 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 G 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 G 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 G 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
G 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 G 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 G 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 G Notes
not to exceed $25.0 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 $25.0 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 G Notes upon
reasonably prior written request during regular business hours.
(D) For purpose of clarification of the terms
"subordinated" and "equally-ranked" 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 equally-ranked to the Series G
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 G Notes to be issued on the
original issue date of the Series G 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 G 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 $20.0
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 G 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 G 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 $20.0 million
at any time outstanding;
(14) the issuance by the Company of up to $125.0 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;
(16) the incurrence by the Company of additional
Indebtedness to finance capital expenditures incurred
pursuant to the Company's 2003 Resource Plan as
approved under order by the Public Utilities
Commission of Nevada or mandated by statute or by one
or more federal or state regulatory authorities,
including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (16);
and
(17) 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 (17),
not to exceed $40.0 million at any time outstanding.
33
(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 G Notes on substantially identical terms; provided, however,
that 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.
(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 (17) 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 G 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 G 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 G 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:
34
(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
(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 G
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 G Notes;
(2) the Indenture, this Officer's Certificate and the
Series G 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
35
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;
(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 G Liens securing Indebtedness otherwise
permitted to be incurred under the provisions of
Section 1(u)(iii) of this Officer's Certificate
("Series G Liens") that limit the right of the debtor
to dispose of the assets subject to such Series G
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
36
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 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 Purchase 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
37
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;
(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 G 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
38
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.
(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 G Notes of
such Affiliate Transaction from a financial
point of view issued by an accounting,
appraisal or investment banking firm of
national standing.
39
(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);
(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 G 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.
40
(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 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 G 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 G Notes
substantially to the same extent as such Indebtedness
is subordinated to the Series G 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 G Notes;
and
41
(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 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,
42
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.
(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 G 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 G Notes
unless such consideration is offered to be paid and is paid to all
Holders of the Series G 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 G Notes are outstanding, the Company shall make available to
the Holders of Series G 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
43
(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 G Notes remain outstanding, they shall
furnish to the Holders of Series G 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
44
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 G Notes below the Investment Grade Ratings so
that the Series G 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 the entire period of time from which the Series G 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 G 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,"
45
"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 G 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 G 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 G 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 G 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 G Notes will be
unaffected thereby. 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 G
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 G 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
46
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 G 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 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 G 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 G 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 G Notes will not
recognize income,
47
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 G 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
G 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 G 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.
(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 G Notes set
forth in Section 1(g) hereof without the consent of each Holder of
Series G 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.
"2003 Resource Plan" means the integrated resource plan filed
with the Public Utilities Commission of Nevada by the Company and
Sierra Pacific Power Company in July 2003.
"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 G Lien encumbering
any asset acquired by such specified Person.
48
"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 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;
49
(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.
"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.
50
"Board of Directors" 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
(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;
51
(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 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:
52
(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, 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
53
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 G Notes; or
(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;
54
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 G 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 G 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 G 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 G 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 G 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
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.
55
"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 G 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 G 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
Trust Company Americas, 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 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 G
Lien on assets of such Person or one of its
Restricted Subsidiaries, whether or not such
Guarantee or Series G 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
56
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 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
57
(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 G 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 G 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:
(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
58
(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 G 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 G Notes for all
purposes of this Officer's Certificate.
The amount of any Indebtedness outstanding as of any date
shall be:
(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.
59
"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 G 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.
"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
60
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 G 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 G 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
(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 G 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.
61
"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 G 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 G Notes, as determined in good faith by the
Board of Directors.
"Permitted Investments" means:
(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
62
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 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 G Notes, not to exceed $30.0 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,
63
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 G 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 G Notes, and the
Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is contractually
subordinated in right of payment to the Series G
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 G Notes on terms at least as favorable to
the Holders of Series G 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 G 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 August
13, 2003 among the Company and each Initial Purchaser relating to the
Offering.
"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.
64
"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 G 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 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
65
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.
"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.
66
"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 G 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 G Permitted Liens" means:
(1) Series G 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 G Liens in favor of the Company or any
Subsidiary Guarantors;
(3) Series G 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
G 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 G 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 G Liens were in existence prior to the
contemplation of such acquisition;
67
(5) Series G 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 G 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 G Liens existing on the original issue date of
the Series G Notes (including the Series G Lien of
the First Mortgage Indenture and the Series G Lien of
the Indenture);
(8) Series G 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 G 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 G Liens to secure Indebtedness permitted by
clauses (7), (13), (16) or (17) 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 G 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");
(12) Series G Liens securing Permitted Refinancing
Indebtedness incurred to refinance Indebtedness that
was previously so secured, provided that any such
Series G 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 G Lien
arose, could secure) the Indebtedness being
refinanced or is in respect of property that is the
security for a Series G Permitted Lien hereunder;
(13) Series G 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
68
(14) Series G 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 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 G
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").
69
"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 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.
70
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.
(v) The Series G 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.
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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 G
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: /s/ Richard K. Atkinson
------------------------------------------
Richard K. Atkinson
Vice President and Chief Financial Officer
Acknowledged and Received on
August 18, 2003
THE BANK OF NEW YORK,
as Trustee
By:/s/ Stacey B. Poindexter
---------------------------------
Name: Stacey B. Poindexter
Title: Assistant Treasurer
NPC Officer's Certificate (Terms of Note)
EXHIBIT A
FORM OF SERIES G 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
9% General and Refunding Mortgage Notes, Series G, due 2013
Original Interest Accrual Date: August 18, 2003 Redeemable: Yes X No
---- ----
Stated Maturity: August 15, 2013 Redemption Date: See Below
Interest Rate: 9% Redemption Price: See Below
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
The Security is not a Discount Security
within the meaning of the within-mentioned Indenture.
---------------
CUSIP No. 641423 BE 7
9% General and Refunding Mortgage Notes, Series G, due 2013
No. R-1 $350,000,000
promises to pay to Cede & Co. or registered assigns, the principal sum of
$350,000,000 Dollars on August 15, 2013.
1. Interest. Nevada Power Company, a Nevada corporation (the
"Company"), promises to pay interest on the principal amount of this Series G
Note at 9% per annum, from August 18, 2003 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 February 15 and August 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 G 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 G 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 G 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 February 15, 2004. 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 G 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 G Notes (except Defaulted Interest) and Liquidated Damages to the Persons
who are registered Holders of Series G Notes at the close of business on the
February 1 and August 1 next preceding the Interest Payment Date, even if such
Series G 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 G 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 G 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 G 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 G Notes. The Company or any of
its Subsidiaries may act in any such capacity.
4. Indenture; Security. This Series G 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 G 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 G Note is one of the series
designated above. The terms of the Series G Notes include those stated in the
Indenture, the Officer's Certificate dated August 18, 2003 (the "Officer's
Certificate") and those made part of the Indenture by reference to the Trust
Indenture Act. The Series G Notes are subject to all such terms, and Holders of
Series G 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 G 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 G Notes are general obligations of the Company initially
limited to $350,000,000 aggregate principal amount in the case of Series G Notes
issued on the Issue Date.
All Outstanding Securities, including the Series G 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 Trust Company Americas, as
trustee.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this
paragraph 5, the Series G Notes shall not be redeemable at the Company's option
prior to August 15, 2008. Thereafter, the Series G 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 August 15 of the years
indicated below:
YEAR PERCENTAGE
- ---- ----------
2008................................... 104.500%
2009................................... 103.000%
2010................................... 101.500%
2011 and thereafter.................... 100.000%
(b) Notwithstanding the foregoing, at any time or from
time to time on or prior to August 15, 2006, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Series G Notes
at a Redemption Price of 109% 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 G Notes remain
outstanding immediately after each occurrence of such redemption excluding
Series G 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 G Notes are to be redeemed at its registered
address. Series G 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 G 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 G Notes or portions
thereof called for redemption.
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7. Mandatory Redemption.
(a) Other than in connection with clause (b) below or in
connection with a redemption at the option of the Holders of the Series G Notes,
the Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Series G 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 G Notes immediately, at a Redemption Price equal to 100% of
the aggregate principal amount of the Series G Notes plus accrued and unpaid
interest and Liquidated Damages, if any, on the Series G Notes to the date of
redemption, without further action or notice on the part of the Trustee or the
Holders of the Series G 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
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(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.
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 G Notes; (b)
failure to pay when due the principal of, or premium, if any, on the Series G
Notes; (c) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions described in Section 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 G
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 G 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 G Notes then
Outstanding may deliver a notice to the Company requiring the Company to redeem
the Series G Notes immediately at a Redemption Price equal to 100% of the
aggregate principal amount of the Series G Notes plus accrued and unpaid
interest and Liquidated Damages, if any, on the Series G Notes to the Redemption
Date. The Holders of a majority in aggregate principal amount of the Series G
Notes then Outstanding by notice to the Company and the Trustee may on behalf of
the Holders of all of the Series G 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 G Notes. In
the case of any Triggering Event occurring on or after August 15, 2008 by reason
of any willful
A-5
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 G 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 G Notes at the option of the Holders thereof. If a
Triggering Event occurs prior to August 15, 2008, 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 G Notes prior
to August 15, 2008, 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 G 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. Denominations, Transfer, Exchange. The Series G Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Series G Notes may be registered and Series
G 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 G Notes, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder of Series G 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 G Note or portion of a
Series G Note selected for redemption, except for the unredeemed portion of any
Series G Note being redeemed in part. Also, the Company need not exchange or
register the transfer of any Series G Notes for a period of 15 days before a
selection of Series G Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Series G
Note may be treated as its owner for all purposes.
11. 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 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
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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 G Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Series G Note and
of any Series G 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 G Note.
12. Events of Default. If an Event of Default shall occur and be
continuing, the principal of this Series G Note may be declared due and payable
in the manner and with the effect provided in the Indenture.
13. 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.
14. Authentication. Unless the certificate of authentication
hereon has been executed by the Trustee or an Authenticating Agent by manual
signature, this Series G Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
15. Transfer and Exchange.
(a) As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Series G Note is registrable
in the Security Register, upon surrender of this Series G 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 G Notes of this series of authorized
denominations and of like tenor and aggregate principal amount, will be issued
to the designated transferee or transferees.
(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.
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(c) Prior to due presentment of this Series G 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 G Note is
registered as the absolute owner hereof for all purposes, whether or not this
Series G Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
16. Governing Law. THE SERIES G NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. 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 G 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.
18. Abbreviations. Customary abbreviations may be used in the name
of a Holder of Series G 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).
19. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Series G 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 August 18, 2003 between Nevada Power
Company and the parties named on the signature pages thereof (the "Registration
Rights Agreement").
20. 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 G Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders of Series G Notes.
No representation is made as to the accuracy of such numbers either as printed
on the Series G 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 G 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: Chief Financial Officer
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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 and Chief
Financial Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: August ___, 2003
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 OF 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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ASSIGNMENT FORM
To assign this Series G Note, fill in the form below: (I) or (we)
assign and transfer this Series G 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 G 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 G
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.
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Series G 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 [ ] Section 1(h)(iv) (Offer
to Purchase upon Change to Purchase Upon Application
of Control) of Excess Proceeds)
If you want to elect to have only part of the Series G 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 G
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.
A-12
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 8W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Nevada Power Company 9% General and Refunding Mortgage Notes,
Series G, due 2013
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 August 18, 2003
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.
B-1
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
B-2
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
B-3
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:_____________________
B-4
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.
B-5
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 8W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Nevada Power Company 9% General and Refunding Mortgage Notes,
Series G, due 2013
(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 August 18,
2003 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
C-1
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
C-2
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:_____________________
C-3
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 8W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Nevada Power Company 9% General and Refunding Mortgage Notes,
Series G, due 2013
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 August 18, 2003
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:________________________
D-3