EXHIBIT 4.1
NEVADA POWER COMPANY
OFFICER'S CERTIFICATE
April 7, 2004
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
February 10, 2004, and Sections 1.04, 2.01, 3.01, 4.01(a) and 4.03(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 ninth series to be issued under the Indenture
shall be designated "6 1/2% General and Refunding Mortgage Notes, Series
I, due 2012" (the "Series I Notes").
(b) There shall be no limit upon the aggregate principal amount of the
Series I Notes that may be authenticated and delivered under the
Indenture. The Series I Notes shall be initially authenticated and
delivered in the aggregate principal amount of $130,000,000.
(c) Interest on the Series I 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 I Notes shall mature and the principal thereof shall be due
and payable together with all accrued and unpaid interest thereon on April
15, 2012.
(e) The Series I Notes shall bear interest as provided in the form of such
Securities attached hereto as Exhibit A.
(f) If a Holder of Series I 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
NPC Officer's Certificate (Terms of Note)
term is defined herein), if any, on that Holder's Series I Notes in
accordance with such instructions. The Corporate Trust Office of The Bank
of New York in New York, New York shall be the place at which (i) the
principal, interest and premium and Liquidated Damages, if any, on the
Series I 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 I Notes may be effected, (iii) exchanges of the
Series I Notes may be effected and (iv) notices and demands to or upon the
Company in respect of the Series I Notes and the Indenture may be served;
and The Bank of New York shall be the Security Registrar for the Series I
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 I Notes.
(g) Optional Redemption.
(i) Optional Redemption. The Company may redeem the Series I Notes
at any time, either in whole or in part at a redemption price equal to the
greater of (1) 100% of the principal amount of the Series I Notes being
redeemed and (2) the sum of the present values of the remaining scheduled
payments of principal and interest on the Series I Notes being redeemed
(excluding the portion of any such interest accrued to the date of
redemption) discounted (for purposes of determining present value) to the
redemption date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate (as defined below) plus 50
basis points, plus, in each case, accrued interest thereon to the date of
redemption.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Series I Notes that
would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the Series I
Notes.
"Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) on the third business day preceding such redemption date, as
set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for U.S. Government Securities" or (2)
if such release (or any successor release) is not published or does not
contain such prices on such third business day, the Reference Treasury
Dealer Quotation for such redemption date.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Company.
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"Reference Treasury Dealer" means a primary U.S. Government
Securities Dealer selected by the Company.
"Reference Treasury Dealer Quotation" means, with respect to the
Reference Treasury Dealer and any redemption date, the average, as
determined by the Independent Investment Banker, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Independent Investment Banker by such Reference Treasury Dealer at or
before 5:00 p.m., New York City time, on the third business day
preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per year equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
(ii) Equity Claw-back. Notwithstanding the foregoing, at any time
prior to April 15, 2007, the Company may on any one or more occasions
redeem up to 35% of the aggregate principal amount of the Series I Notes
at a Redemption Price of 106.5% 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 I Notes remains outstanding immediately after the
occurrence of such redemption (excluding Series I 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 I Notes to be redeemed at its
registered address, except that redemption notices may be mailed more than
60 days prior to a Redemption Date if the notice is issued in connection
with a defeasance of the Series I Notes or a satisfaction and discharge of
the Series I Notes under the Indenture. Notices of redemption may not be
conditional.
(iv) Selection of Series I Notes to be Redeemed. In accordance with
Section 5.03 of the Indenture, the following method is provided for the
selection of Series I Notes to be redeemed and these procedures shall be
followed by the Security Registrar in the event of a redemption of the
Series I Notes pursuant to the provisions of this Officer's Certificate.
If less than all of the Series I Notes are to be redeemed at any time, the
Security Registrar shall select Series I Notes for redemption as follows:
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(A) if the Series I Notes are listed on any national securities
exchange, in compliance with the requirements of the principal
national securities exchange on which the Series I Notes are
listed; or
(B) if the Series I 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 I 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 I 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 I Notes immediately, at a Redemption Price equal to 100% of the
aggregate principal amount of the Series I Notes plus accrued and unpaid
interest and Liquidated Damages, if any, on the Series I Notes to the date
of redemption, without further action or notice on the part of the Trustee
or the Holders of the Series I 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,
(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
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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 I Notes;
(2) failure to pay when due the principal of, or premium, if any,
on the Series I 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--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 I
Notes;
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(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 I 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,
the Holders of Series I Notes of at least 25% in principal amount of the
Series I Notes then Outstanding may deliver a notice to the Company
requiring the Company to redeem the Series I Notes immediately at a
Redemption Price equal to 100% of the aggregate principal amount of the
Series I Notes plus accrued and unpaid interest and Liquidated Damages, if
any, on the Series I Notes to the Redemption Date.
(B) The Holders of a majority in aggregate principal amount of the
Series I Notes then outstanding by notice to the Company and the Trustee
may on behalf of the Holders of all of the Series I 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 I Notes.
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(C) In the case of any Triggering Event 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 I
Notes pursuant to the provisions of Section 1(g)(i) or, prior to April 15,
2007, Section 1(g)(ii) of the Officer's Certificate relating to redemption
at the option of the Company, an equivalent premium equal to the premium
payable under Section 1(g)(i) or, prior to April 15, 2007, Section
1(g)(ii), whichever is greater, shall also become and be immediately due
and payable to the extent permitted by law upon the redemption of the
Series I 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 I 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 I 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 I Notes repurchased plus accrued and
unpaid interest and Liquidated Damages, if any, on the Series I 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 I 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 Section 1(h)(iii), and
that all Series I 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 I 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 I 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 I Notes electing to have any Series I
Notes purchased pursuant to a Change of Control Offer shall be
required to
7
surrender the Series I Notes properly endorsed, with the form
entitled "Option of Holder to Elect Purchase" on the reverse
of the Series I 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 I 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 I Notes delivered for purchase,
and a statement that such Holder of Series I Notes is
withdrawing its election to have the Series I Notes purchased;
and
(7) that Holders of Series I Notes whose Series I Notes are being
purchased only in part shall be issued new Series I Notes
equal in principal amount to the unpurchased portion of the
Series I 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 I 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 I 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 I Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to
the Trustee the Series I Notes so accepted together with an Officer's
Certificate stating the aggregate principal amount of Series I Notes or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Series I Notes so tendered the Change of
Control Payment for such Series I Notes, and the Trustee shall promptly
authenticate and make available for delivery to each Holder of Series I
Notes a new Series I Note equal in principal amount to any unpurchased
portion of the Series I Notes surrendered, if any; provided that each such
new Series I Note shall be in a principal amount of $1,000 or an integral
multiple thereof. Any Series I 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.
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(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 I 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 I Notes, and all holders of other Indebtedness that is
equally-ranked with the Series I 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 I 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 I Notes and other equally-ranked Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Series I 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.
(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 I 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 I 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 I
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;
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(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Series I 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 I 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 I Notes electing to have a Series I
Note purchased pursuant to any Asset Sale Offer shall be
required to surrender the Series I Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse
of the Series I 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 I 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 I Notes delivered for purchase, and a
statement that such Holder of Series I Notes is withdrawing
its election to have the Series I Notes purchased;
(7) that, if the aggregate principal amount of Series I Notes
surrendered by Holders of Series I Notes exceeds the Offer
Amount, the Trustee shall select the Series I Notes to be
purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Trustee so that only Series I Notes
in denominations of $1,000, or integral multiples thereof,
shall be purchased); and
(8) that Holders of Series I Notes whose Series I Notes are being
purchased only in part shall be issued new Series I 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 I 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 I Notes or portions thereof tendered pursuant
to the Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Series I Notes tendered, and shall deliver to the Trustee an
officer's certificate stating that such Series I Notes or portions thereof
were
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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 I Notes an amount equal to the purchase price
of the Series I Notes tendered by such Holder of Series I Notes and
accepted by the Company for purchase, and the Company shall promptly issue
a new Series I Note, and the Trustee, upon written request from the
Company, shall authenticate and make available for delivery such new
Series I Note to such Holder of Series I Notes, in a principal amount
equal to any unpurchased portion of the Series I Note surrendered;
provided that each such new Series I Note shall be in a principal amount
of $1,000 or an integral multiple thereof. Any Series I 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 I 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 I
Notes who tender Series I 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 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 I 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.
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(n) Not applicable.
(o) Not applicable.
(p) Not applicable.
(q) Book-entry; Delivery and Form.
(i) Form and Dating.
The Series I Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Series I Notes
may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Series I Note shall be dated the date of its
authentication. The Series I Notes shall be in denominations of $1,000 and
integral multiples thereof.
The terms and provisions contained in the Series I 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 I
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 I 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 I
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 I Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Series I Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Series I 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 I 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.
12
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 I Notes for
original issue on the Issue Date in the aggregate principal amount of
$130,000,000 (the "Original Notes"), (B) additional Series I 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 I
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 I Notes to be
authenticated and the date of original issue thereof, (y) whether the
Series I Notes are Initial Notes or Exchange Notes and (z) the amount of
Series I Notes to be issued in global form or definitive form. The
aggregate principal amount of Series I Notes outstanding at any time may
not exceed $130,000,000 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)(vi) 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 I 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 I Notes.
The Company shall maintain a Place of Payment for the Series I 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.
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 I 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
13
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 I Notes
in certificated form; or
(3) there has occurred and is continuing a Default or Event of
Default with respect to the Series I Notes.
Upon the occurrence of either of the preceding events in (1), (2) or
(3) 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 I 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 I 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 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
14
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 I 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.
(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
15
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
(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
16
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 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;
17
(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 I 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 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;
18
(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 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 I 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
19
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 I 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 I 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 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
20
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 I 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 I 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
(ii) if the Holder of such Definitive Notes proposes to
transfer such Series I 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.
21
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 I 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).
(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
22
(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 I 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 I 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 I Notes to a Person who shall take
delivery thereof in the form of an 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 I Notes to a
23
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.
(a) Except as permitted by subparagraph (b) below, each
Global Note and each Definitive Note (and all Series I 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
24
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 (C), (D) OR (E) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (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 I Notes issued in
25
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."
(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 I 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
26
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 I 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 I Notes.
Notwithstanding the definition of "Outstanding" in Section 1.01 of
the Indenture, Series I 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 I Notes passes to the Company, such
Subsidiary or such Affiliate, as the case may be.
(r) Not applicable.
(s) The Series I 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 I
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).
27
(t) For purposes of the Series I 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 I 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:
(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
28
(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 I Notes (excluding Restricted Payments permitted by
clauses 1(u)(i)(B)(2), 1(u)(i)(B)(3), 1(u)(i)(B)(4),
1(u)(i)(B)(6) and 1(u)(i)(B)(8)), 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 I 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 I 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 I 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
(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 I 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:
29
(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 or any of its Restricted Subsidiaries 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 expenses
(including but not limited to, principal, premium, if
any, and interest on Sierra Pacific Resources'
Indebtedness and payment obligations on account of
Sierra Pacific Resources' Premium Income Equity
Securities) incurred in the ordinary course of business,
which 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
30
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 I 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 I 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 I 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").
(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
31
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 I Notes to be issued on the
original issue date of the Series I 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 I Notes, any additional notes of the same series
and any 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 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
32
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 I
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); and
(d) any Indebtedness issued by the Company or any of
its Restricted Subsidiaries to a Trust Preferred
Vehicle shall not be treated as intercompany
Indebtedness for purposes of this clause (6) to
the extent of the face amount of the beneficial
interests of the Trust Preferred Vehicle that are
not held by the Company or any of its Restricted
Subsidiaries.
(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"), provided that in the event that the
Indebtedness shall be subordinated in right of payment
to the Series I Notes, then the Guarantee of that
Indebtedness shall be subordinated in right of payment
to the Series I Notes;
(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
33
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;
(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 I
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 to secure
Standard Securitization Undertakings entered into by the
Company in connection with a Qualified Receivables
Transaction, provided that the obligation of the Company
to make any payment on any such securities shall be:
(a) payable no earlier than such amount is required to
be paid in respect of such Standard Securitization
Undertakings; and
(b) deemed to have been paid or otherwise satisfied
and discharged to the extent that Company has paid
such amount in respect of such Standard
Securitization Undertakings;
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
34
under Section 1(u)(ii)(B)(1) ("Certain Covenants and
Definitions--Incurrence of Indebtedness and Issuance of
Preferred Stock");.
(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.
(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 I 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
35
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 I 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 I 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 I Permitted Liens.
(iv) Dividend and Other Payment Restrictions Affecting
Subsidiaries.
(A) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit
to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Subsidiaries,
or with respect to any other interest or participation
in, or measured by, its profits, or pay any Indebtedness
owed to the Company or any of its Restricted
Subsidiaries;
(2) make loans or advances to Company or any of its
Restricted Subsidiaries; or
(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 I Notes
and other customary encumbrances and restrictions
existing on or after the original issue date of the
Series I Notes that are not 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 I Notes; provided
that the application of such restrictions or
encumbrances to additional Restricted Subsidiaries not
subject thereto on the original issue date of the Series
I Notes shall not be deemed to make such restrictions
more restrictive;
(2) the Indenture, this Officer's Certificate and the Series
I Notes and other customary encumbrances and
restrictions existing in indentures and notes
36
after the original issue date of the Series I Notes that
are not more restrictive, in any material respect, taken
as a whole, with respect to such dividend and other
payment restrictions than those contained in the
Indenture, this Officer's Certificate and the Series I
Notes;
(3) applicable law (including without limitation, rules,
regulations and agreements with regulatory authorities)
or any order issued pursuant to a federal or state
statute or any order by or agreement with any court or
governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their
respective properties;
(4) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness or
Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the
properties or assets of any Person, other than the
Person, or the property or assets of the Person, so
acquired; provided that, in the case -------- of
Indebtedness, such Indebtedness was permitted by the
terms of this Officer's Certificate to be incurred;
(5) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent
with past practices;
(6) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on
that property of the nature described in clause
1(u)(iv)(A)(3);
(7) any Purchase Money Note or other Indebtedness or
contractual requirements incurred with respect to a
Qualified Receivables Transaction relating exclusively
to a Receivables Entity that, in the good faith
determination of the Board of Directors, are necessary
to effect such Qualified Receivables Transaction;
(8) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions or
dispositions of assets by that Restricted Subsidiary
pending its sale or other disposition;
(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 I Liens securing Indebtedness otherwise permitted
to be incurred under the provisions of Section 1(u)(iii)
of this Officer's Certificate ("Series I Liens") that
limit the right of the debtor to dispose of the assets
subject to such Series I Liens; and
37
(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) for any agreement to make an Asset Sale that is entered
into after the Series I Notes are issued under the
Indenture, the fair market value is determined by (a) an
executive officer of Company if the value is more than
$5.0 million but less than $25.0 million or (b) the
Company's Board of Directors if the value is $25.0
million or more, as evidenced by a resolution of the
Board of Directors set forth in an Officer's Certificate
delivered to the Trustee; and
(3) at least 75% of the consideration received in the Asset
Sale by the Company or such Restricted Subsidiary is in
the form of cash. For purposes of this provision, each
of the following shall be deemed to be cash:
(a) any liabilities, as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet,
of the Company or any Restricted Subsidiary (other
than contingent liabilities and liabilities that
are by their terms subordinated to the notes) that
are assumed by the transferee of any such assets
pursuant to a customary novation agreement that
releases the Company or such Restricted Subsidiary
from further liability; and
(b) any securities, notes or other obligations
received by the Company or any such Restricted
Subsidiary from such transferee that are
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.
38
(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 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
39
obligations of the Company under the Series I 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") or the Fixed Charge Coverage Ratio of
the Company or the surviving Person, as applicable, or
the Person to which such sale, assignment, transfer,
conveyance or other disposition has been made, would not
be less than the Fixed Charge Coverage Ratio of the
Company immediately prior to the transaction; provided,
however, that this clause (4) shall be suspended during
any period in which the Company and its Restricted
Subsidiaries are not subject to the Suspended Covenants;
and
(5) the Company, or the Person formed by or surviving any
such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer,
conveyance or other disposition has been made, shall
have delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that such
transaction and any supplemental indenture entered into
in connection therewith complies with all of the terms
of this Section 1(u)(vi) and that all conditions
precedent provided for in this Section 1(u)(vi) relating
to such transaction or series of transactions have been
complied with.
(B) In addition, the Company may not, directly or indirectly,
lease all or substantially all of its properties or assets, in one
or more related transactions, to any other Person. Clauses (4) and
(5) under Section 1(u)(vi)(A) shall not apply to a sale, assignment,
transfer, conveyance or other disposition of assets between or among
the Company and any of its Restricted Subsidiaries.
40
(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 I Notes of such Affiliate
Transaction from a financial point of view issued
by an accounting, appraisal or investment banking
firm of national standing.
(B) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions
of Section 1(u)(vii)(A) above:
(1) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary
course of business and consistent with the past practice
of the Company or such Restricted Subsidiary;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries (other than a Receivables
Entity);
41
(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 I Notes;
(9) loans or advances to officers, directors and employees
of the Company or any Restricted Subsidiary made in the
ordinary course of business, consistent with past
practices of the Company and/or its Restricted
Subsidiaries and in compliance with applicable law in an
aggregate amount not to exceed $1.0 million outstanding
at any one time; and
(10) sales or other transfers or dispositions of accounts
receivable and other related assets customarily
transferred in an asset securitization transaction
involving accounts receivable to a Receivables Entity in
a Qualified Receivables Transaction, and acquisitions of
Permitted Investments in connection with a Qualified
Receivables Transaction.
(C) The provisions of this Section 1(u)(vii) ("Transactions
with Affiliates") is subject to the provisions of Section 1(u)(xiv)
("Certain Covenants and Definitions--Suspension of Certain
Covenants").
(viii) Designation of Restricted and Unrestricted
Subsidiaries.
(A) The Board of Directors may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation
would not cause a Default; provided that in no event shall the
business currently operated by the Company be transferred to or held
by an Unrestricted Subsidiary. If a Restricted Subsidiary is
designated as an Unrestricted Subsidiary, the aggregate fair market
value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated shall
be deemed to be an Investment made as of the time of the designation
and shall reduce the amount available for Restricted Payments under
Section 1(u)(i)(A) of this Officer's Certificate (under the heading
"Restricted Payments"). That designation shall only be
42
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 I 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 I Notes
substantially to the same extent as such Indebtedness is
subordinated to the Series I 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 I Notes; and
(3) such Restricted Subsidiary shall deliver to the Trustee
an Opinion of Counsel to the effect that (a) such
Subsidiary Guarantee has been duly executed and
authorized and (b) such Subsidiary Guarantee constitutes
a valid, binding and enforceable obligation of such
Restricted Subsidiary, except insofar as enforcement
thereof may be limited by bankruptcy, insolvency or
similar laws (including, without limitation, all laws
relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of
equity; provided that this Section 1(u)(ix)(A) shall not
be applicable to any Guarantee of any Restricted
43
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, 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");
44
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 I 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 I Notes unless such consideration is offered to be paid and
is paid to all Holders of the Series I 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 I Notes are outstanding, the Company shall make available to
the Trustee and otherwise make available on its website, within the
time periods specified in the Commission's rules and regulations (as
if required):
(1) all quarterly and annual financial information that
would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and
Results of Operations" and the certifications that would
be required by Rule 13a-14 under the Exchange Act and,
with respect to the annual information only, a report on
the annual financial statements by the Company's
certified independent accountants; and
(2) all current reports that would be required to be filed
with the Commission on Form 8-K if the Company were
required to file such reports.
(B) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial
information required by the preceding paragraph shall include a
reasonably detailed presentation, either on the face of the
financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and
45
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 I
Notes remain outstanding, they shall furnish to the Holders of
Series I Notes and to prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
(xiv) Suspension of Certain Covenants.
(A) During any period of time that the notes have an
Investment Grade Rating from both of the Rating Agencies and no
Default or Event of Default has occurred and is continuing under the
Indenture, the Company and its Restricted Subsidiaries shall not be
subject to the following provisions of this Officer's Certificate:
Section 1(h)(iv), Section 1(u)(i), Section 1(u)(ii), Section
1(u)(iv), Section 1(u)(v), Section 1(u)(vii), Section 1(u)(viii) and
Section 1(u)(xi) (under the headings: "Mandatory
Redemption/Redemption at Option of Holders/Offers to Purchase--Offer
to Purchase by Application of Excess Proceeds," "Certain Covenants
and Definitions--Restricted Payments," "Certain Covenants and
Definitions--Incurrence of Indebtedness and Issuance of Preferred
Stock," "Certain Covenants and Definitions--Dividend and Other
Payment Restrictions Affecting Subsidiaries," "Certain Covenants and
Definitions--Asset Sales," "Certain Covenants and
Definitions--Transactions with Affiliates," "Certain Covenants and
Definitions--Designation of Restricted and Unrestricted
Subsidiaries," and "Certain Covenants and Definitions--Business
Activities") (collectively, the "Suspended Covenants"); provided,
however, that the provisions in Section 1(h)(iii), Section
1(u)(iii), Section 1(u)(vi) (except as set forth in -------- -------
that Section 1(u)(vi)), Section 1(u)(ix) (except as set forth in
that Section 1(u)(ix), Section 1(u)(x), Section 1(u)(xii) (except as
set forth in that Section 1(u)(xii)) and Section 1(u)(xiii) (under
the headings "Mandatory Redemption/Redemption at Option of
Holders/Offers to Purchase--Offer to Purchase Upon Change of
Control," "Certain Covenants and Definitions--Liens," "Certain
Covenants and Definitions--Merger, Consolidation or Sale of Assets"
(except as set forth thereunder), "Certain Covenants and
Definitions--Future Subsidiary Guarantees" (except as set forth
thereunder), "Certain Covenants and Definitions--Sale and Leaseback
Transactions" (except as set forth thereunder), "Certain Covenants
and Definitions--Payments for Consent," and "Reports") of this
Officer's Certificate shall not be so suspended.
(B) If the Company and its Restricted Subsidiaries are not
subject to the Suspended Covenants for any period of time as a
result of the preceding Section 1(xiv)(A) and, subsequently, either
of the Rating Agencies withdraws its ratings or downgrades the
ratings assigned to the Series I Notes below the Investment Grade
46
Ratings so that the Series I 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 I 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 I
Notes upon compliance with the conditions set forth below in Section
1(u)(xv)(C) hereof.
(B) Exercise of Covenant Defeasance. Upon the Company's
exercise under Section 1(u)(xv)(A) hereof of the option applicable
to this Section 1(u)(xv)(B), the Company shall, subject to the
satisfaction of the conditions set forth in Section 1(u)(xv)(C)
hereof, be released from each of its obligations under the covenants
contained in Section 1(h)(iii), Section 1(h)(iv), Section 1(u)(i),
Section 1(u)(ii), Section 1(u)(iii), Section 1(u)(iv), Section
1(u)(v), Section 1(u)(vii), Section 1(u)(viii), Section 1(u)(ix),
Section 1(u)(x), Section 1(u)(xi), Section 1(u)(xii) hereof (under
the headings: "Mandatory Redemption/Redemption at Option of
Holders/Offers to Purchase--Offer to Purchase Upon Change of
Control," Mandatory Redemption/Redemption at Option of
Holders/Offers to Purchase--Offer to Purchase by Application of
Excess Proceeds," "Certain Covenants and Definitions--Restricted
Payments," "Certain Covenants and Definitions--Incurrence of
Indebtedness and Issuance of Preferred Stock," "Certain Covenants
and Definitions--Liens," "Certain Covenants and
Definitions--Dividend and Other Payment Restrictions Affecting
Subsidiaries," "Certain Covenants and Definitions--Asset Sales,"
"Certain Covenants and Definitions--Transactions with Affiliates,"
"Certain Covenants and Definitions--Designation of Restricted and
Unrestricted Subsidiaries," "Certain Covenants and
Definitions--Future Subsidiary Guarantees," "Certain Covenants and
Definitions--Sale and Leaseback Transactions," "Certain Covenants
and Definitions--Business Activities" and "Certain Covenants and
Definitions--Payment for Consents") and clause (A)(4) of Section
1(u)(vi) (under the heading "Certain Covenants and
Definitions--Merger, Consolidation or Sale of Assets") hereof with
respect to the Outstanding Series I 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 I 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 I Notes
(and the consequences of any thereof) in connection
47
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 I 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 I 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 I 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 I Notes or portions thereof
provided, that the Company shall have delivered to
the Trustee and such Paying Agent: (I) a Company
Order stating that the money and Eligible
Obligations deposited in accordance with this
Section 1(u)(xv)(C) shall be held in trust, as
provided in Section 9.03 of the Indenture; and
(II) if Eligible Obligations shall have been
deposited, an Opinion of Counsel to the effect
that such obligations constitute Eligible
Obligations and do not contain provisions
permitting the redemption or other prepayment
thereof at the option of the issuer thereof, and
an opinion of an Independent public Accountant of
nationally recognized standing, selected by the
Company, to the effect that
48
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 I 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 this Officer's Certificate) 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 I 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 I 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 I Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such satisfaction and
discharge and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such satisfaction and discharge had not occurred; or (b)
(i) an instrument wherein the Company, notwithstanding the
satisfaction and discharge of the Company's Indebtedness in respect
of the Series I 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
49
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 I 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 I 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 I Notes set
forth in Section 1(g) hereof without the consent of each Holder of
Series I 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 I Lien encumbering any
asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes
of this definition, "control," as used with respect to any Person,
means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such Person,
whether through the ownership
50
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;
(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;
51
(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"); and
(7) transfers of assets by the Company and its Restricted
Subsidiaries required under statute or regulation in
connection with renewable energy contracts.
"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.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation or any committee of such board of
directors duly authorized to act for the corporation;
52
(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;
(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;
53
(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:
(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
54
(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 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;
55
(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 cumulative effect of a change in accounting
principles shall be excluded; and
(4) 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 I 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; 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").
56
"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 I 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 I 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 I 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 I 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 I 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.
"Excess Proceeds" has the meaning assigned to it in Section
1(u)(v)(D) of this Officer's Certificate.
57
"Exchange Notes" means if and when issued, each series of the
Series I 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 I
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 I Lien on
assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Series I
Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or
accrued and whether or not in cash, on any series of
preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests
payable solely in Equity Interests of the Company (other
than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, times (b) a
fraction, the numerator of which is
58
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
(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
59
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 I 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 I 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
(4) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or
currency exchange rates.
60
"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 all Indebtedness
of others secured by a Series I 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.
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.
"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.
61
"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 I 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 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).
62
"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 I 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
I 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 I Notes in global form, or any
successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offer Amount" has the meaning assigned to it in Section
1(h)(iv)(B) of this Officer's Certificate.
"Offer Period" has the meaning assigned to it in Section
1(h)(iv)(B) of this Officer's Certificate.
63
"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 I 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 I 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
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");
64
(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 I 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,
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 I Notes, such Permitted Refinancing
Indebtedness has a final
65
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 I Notes, and the Indebtedness being
extended, refinanced, renewed, replaced, defeased or
refunded is contractually subordinated in right of
payment to the Series I 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 I Notes on terms at
least as favorable to the Holders of Series I 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 I 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.
"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
66
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 I 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 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
67
(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.
"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.
68
"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 I 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 I Permitted Liens" means:
(1) Series I 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 I Liens in favor of the Company or any Subsidiary
Guarantors;
(3) Series I 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 I 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 I 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 I Liens were in existence prior to the
contemplation of such acquisition;
(5) Series I Liens to secure the performance of statutory or
regulatory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Series I 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
69
Indebtedness and Issuance of Preferred Stock") covering
only the assets acquired with such Indebtedness;
(7) Series I Liens existing on the original issue date of
the Series I Notes (including the Series I Lien of the
First Mortgage Indenture and the Series I Lien of the
Indenture);
(8) Series I 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 I 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 I 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 I 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 I Liens securing Permitted Refinancing
Indebtedness incurred to refinance Indebtedness that was
previously so secured; provided that any such Series I
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 I Lien arose, could secure) the
Indebtedness being refinanced or is in respect of
property that is the security for a Series I Permitted
Lien hereunder;
(13) Series I Liens on assets transferred to a Receivables
Entity or on assets of a Receivables Entity, in either
case, incurred in connection with a Qualified
Receivables Transaction; and
(14) Series I 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
70
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 I
Notes to be executed by any Subsidiary of the Company pursuant to
Section 1(u)(ix) of this Officer's Certificate (under the heading
"Future Subsidiary Guarantees").
"Subsidiary Guarantors" means any Subsidiary of the Company
that executes a Subsidiary Guarantee in accordance with the
provisions of the Indenture, and their respective successors and
assigns.
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"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.
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
72
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 I 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 I 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.
74
IN WITNESS WHEREOF, the undersigned has executed this Officer's
Certificate as of the date first written above.
By:
-----------------------------------
Michael W. Yackira
Executive Vice President and
Chief Financial Officer
Acknowledged and Received on
April ___, 2004
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
NPC Officer's Certificate (Terms of Note)
EXHIBIT A
FORM OF SERIES I 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
6 1/2% General and Refunding Mortgage Notes, Series I, due 2012
Original Interest Accrual Date: April 7, 2004 Redeemable: Yes |X| No | |
Stated Maturity: April 15, 2012 Redemption Date: See Below
Interest Rate: 6 1/2% Redemption Price: See Below
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
The Security is not a Discount Security
within the meaning of the within-mentioned Indenture.
CUSIP No. ___________________
6 1/2% General and Refunding Mortgage Notes, Series I, due 2012
No. R-1 $130,000,000
promises to pay to Cede & Co. or registered assigns, the principal sum of
$130,000,000 Dollars on April 15, 2012.
1. Interest. Nevada Power Company, a Nevada corporation (the "Company"),
promises to pay interest on the principal amount of this Series I Note at 6 1/2%
per annum, from April 7, 2004 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company shall pay interest and Liquidated Damages, if
any, semi-annually in arrears on April 15 and October 15 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Series I 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 I
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 I 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 October 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 I 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 I Notes
(except Defaulted Interest) and Liquidated Damages to the Persons who are
registered Holders of Series I Notes at the close of business on the April 1 and
October 1 next preceding the Interest Payment Date, even if such Series I 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 I 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 I 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 I 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 I Notes. The Company or any of its Subsidiaries
may act in any such capacity.
4. Indenture; Security. This Series I 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 I 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 I Note is one of the series designated above. The
terms of the Series I Notes include those stated in the Indenture, the Officer's
Certificate dated April 7, 2004 (the "Officer's Certificate") and those made
part of the Indenture by reference to the Trust Indenture Act. The Series I
Notes are subject to all such terms, and Holders of Series I Notes are referred
to the Indenture and such Act for a statement of
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such terms. To the extent any provision of this Series I 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 I Notes are general obligations of the Company initially limited to
$130,000,000 aggregate principal amount in the case of Series I Notes issued on
the Issue Date.
All Outstanding Securities, including the Series I 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) The Company may redeem the notes at any time, either in whole or
in part at a redemption price equal to the greater of (1) 100% of the principal
amount of the Series I Notes being redeemed and (2) the sum of the present
values of the remaining scheduled payments of principal and interest on the
Series I Notes being redeemed (excluding the portion of any such interest
accrued to the date of redemption) discounted (for purposes of determining
present value) to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate (as defined below)
plus 50 basis points, plus, in each case, accrued interest thereon to the date
of redemption.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Series I Notes that would be
utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Series I Notes.
"Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) on the third business day preceding such redemption date, as set
forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for U.S. Government Securities" or (2) if
such release (or any successor release) is not published or does not
contain such prices on such third business day, the Reference Treasury
Dealer Quotation for such redemption date.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Company.
"Reference Treasury Dealer" means a primary U.S. Government
Securities Dealer selected by the Company.
"Reference Treasury Dealer Quotation" means, with respect to the
Reference Treasury Dealer and any redemption date, the average, as
determined by the
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Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker
by such Reference Treasury Dealer at or before 5:00 p.m., New York City
time, on the third business day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per year equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
(b) Notwithstanding the foregoing, at any time or from time to time
on or prior to April 15, 2007, the Company may on any one or more occasions
redeem up to 35% of the aggregate principal amount of Series I Notes at a
Redemption Price of 106.5% 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 I Notes remain
outstanding immediately after each occurrence of such redemption excluding
Series I 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 I Notes are to be redeemed at its registered address.
Series I 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 I 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 I Notes or portions
thereof called for redemption.
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 I Notes, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Series I 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 I Notes immediately, at a Redemption Price equal to 100% of the aggregate
principal amount of the Series I Notes plus accrued and unpaid interest and
Liquidated Damages, if any, on the Series I Notes to the date of redemption,
without further action or notice on the part of the Trustee or the Holders of
the Series I 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
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Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(I) commences a voluntary case,
(II) consents to the entry of an order for relief against it
in an involuntary case,
(III) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(IV) makes a general assignment for the benefit of its
creditors, or
(V) admits in writing of its inability to pay its debts
generally as they become due; or
(2) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(I) is for relief against the Company or any of its
Subsidiaries that is a Significant Subsidiary or any
group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary
case;
(II) appoints a custodian of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any
group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any
of its Subsidiaries that is a Significant Subsidiary or
any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; or
(III) orders the liquidation of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any
group of Restricted 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 I Notes; (b) failure to
pay when due the principal of, or premium, if any, on the Series I 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
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notice to comply with any of the other agreements in the Officer's Certificate
or the Series I 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 I 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 I Notes then
Outstanding may deliver a notice to the Company requiring the Company to redeem
the Series I Notes immediately at a Redemption Price equal to 100% of the
aggregate principal amount of the Series I Notes plus accrued and unpaid
interest and Liquidated Damages, if any, on the Series I Notes to the Redemption
Date. The Holders of a majority in aggregate principal amount of the Series I
Notes then Outstanding by notice to the Company and the Trustee may on behalf of
the Holders of all of the Series I 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 I Notes. In
the case of any Triggering Event 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 I Notes pursuant to the provisions of
Section 1(g)(i) or, prior to April 15, 2007, Section 1(g)(ii) of the Officer's
Certificate relating to redemption at the option of the Company, an equivalent
premium equal to the premium payable under Section 1(g)(i) or, prior to April
15, 2007, Section 1(g)(ii), whichever is greater, shall also become and be
immediately due and payable to the extent permitted by law upon the redemption
of the Series I Notes at the option of the Holders thereof.
9. Denominations, Transfer, Exchange. The Series I Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Series I Notes may be registered and Series I 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 I Notes, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder of Series I 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 I Note or portion of a Series I Note
selected for redemption, except for the
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unredeemed portion of any Series I Note being redeemed in part. Also, the
Company need not exchange or register the transfer of any Series I Notes for a
period of 15 days before a selection of Series I 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 I 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 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 I
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Series I Note and of any Series I 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 I
Note.
12. Events of Default. If an Event of Default shall occur and be
continuing, the principal of this Series I 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
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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 I 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 I Note is registrable in the
Security Register, upon surrender of this Series I 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 I 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.
(c) Prior to due presentment of this Series I 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 I Note is registered as
the absolute owner hereof for all purposes, whether or not this Series I 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 I 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 I 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 I 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 I
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set
A-8
forth in the Registration Rights Agreement dated as of April 7, 2004 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 I Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders of Series I Notes.
No representation is made as to the accuracy of such numbers either as printed
on the Series I 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 I 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
A-9
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
NEVADA POWER COMPANY
By: ____________________________
Michael W. Yackira
Executive 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: April ___, 2004
THE BANK OF NEW YORK, as Trustee
By: _______________________________
Authorized Signatory
A-10
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
THIS GLOBAL NOTE SIGNATURE OF
AMOUNT OF DECREASE AMOUNT OF INCREASE FOLLOWING SUCH AUTHORIZED SIGNATORY
IN PRINCIPAL AMOUNT IN PRINCIPAL AMOUNT DECREASE (OR OF TRUSTEE OR NOTE
DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE INCREASE) CUSTODIAN
---------------- ------------------- ------------------- ------------------- --------------------
- --------
*** This should be included only if the Note is issued in global form.
A-11
ASSIGNMENT FORM
To assign this Series I Note, fill in the form below: (I) or (we) assign
and transfer this Series I 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 I 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 I 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-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Series I Note purchased by the Company
pursuant to Section 1(h)(iii) (Offer to Purchase upon Change of Control) or
1(h)(iv) (Offer to Purchase Upon Application of Excess Proceeds) of the
Officer's Certificate, check the box below:
| | Section 1(h)(iii) (Offer to Purchase upon | | Section 1(h)(iv) (Offer to Purchase
Change of Control) Upon Application of Excess Proceeds)
If you want to elect to have only part of the Series I 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 I 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-13
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 6 1/2% General and Refunding Mortgage Notes,
Series I, due 2012
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 April 7 , 2004 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. 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 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
B-3
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 6 1/2% General and Refunding Mortgage Notes,
Series I, due 2012
(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 April 7, 2004 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 6 1/2% General and Refunding Mortgage Notes,
Series I, due 2012
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 April 7, 2004 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