SIERRA PACIFIC RESOURCES
AMENDED AND RESTATED OFFICERS' CERTIFICATE
June 14, 2005
Pursuant to Sections 2.01, 13.04 and 13.05 of the Indenture dated as of
May 1, 2000 (as supplemented and amended from time to time, the "Indenture"),
between Sierra Pacific Resources (the "Company") and The Bank of New York, as
trustee (the "Trustee") and the authority granted in the Resolutions of the
Board of Directors of the Company dated February 8, 2005, the undersigned
officers of the Company, Michael W. Yackira, Corporate Executive Vice President
and Chief Financial Officer, and William D. Rogers, Corporate Treasurer, hereby
certify as follows:
The terms and conditions of the securities described in this Amended and
Restated Officers' Certificate (as amended, modified and supplemented from time
to time, the "Officers' Certificate") are as follows (the numbered paragraphs
set forth below corresponding to the numbered paragraphs of Section 2.01 of the
Indenture, except paragraph 20 below). This Officers' Certificate amends and
restates in its entirety that certain Officers' Certificate dated May 24, 2005
between the Company and the Trustee (the "Original Officers' Certificate"). This
Officers' Certificate shall constitute the Second Officers' Certificate (as
defined in the Original Officers' Certificate) and upon execution and delivery
hereof by the Company, the Trustee is hereby directed to make a notation on the
face of the Global Senior Note and all Certificated Senior Notes, as applicable,
in substantially the form as set forth on Exhibit A annexed hereto. Certain
terms used herein are defined in paragraph 20 of this certificate. Capitalized
terms used herein but not defined in said paragraph 20 or elsewhere in this
certificate shall have the meanings assigned to them in the Indenture unless the
context clearly requires otherwise
1. Title; Ranking. The Securities issued under the Indenture shall be
designated "7.803% Senior Notes due 2012" (the "Senior Notes"). The Senior
Notes shall constitute the senior, unsecured and unsubordinated debt
obligations of the Company and shall rank equally in right of payment with
all other existing and future senior, unsecured and unsubordinated debt
obligations of the Company. The Senior Notes, including the related form
of Trustee's certificate of authentication and any applicable legends,
were issued on May 24, 2005 under the Original Officers' Certificate in
substantially the form annexed hereto as Exhibit B.
2. Maximum Aggregate Principal Amount. The maximum aggregate principal amount
of the Senior Notes that may be authenticated and delivered under the
Indenture (except for the Senior Notes authenticated and delivered upon
registration of transfer of or in exchange for, or in lieu of other Senior
Notes pursuant to Section 2.06, 2.07, 2.09 or 3.07 of the Indenture) shall
be $99,142,000.
3. Book-entry; Form, Etc. The Senior Notes initially will be issued in
book-entry form only. The Senior Notes will be represented by one or more
global securities deposited with The Depository Trust Company (the
"Depositary") and registered in the name of the Depositary's nominee. The
Depositary shall make book-entry transfers among its participants and
receive and transmit any payments on the global securities to such
participants; provided that, solely for the purposes of determining
whether the Holders of
the requisite amount of the Senior Notes have voted on any matter provided
for in the Indenture, the Company may rely conclusively on, and shall be
protected in relying on, any written instrument (including a proxy)
delivered to the Company by the Depositary setting forth the votes of the
beneficial owners of the Senior Notes or assigning the right to vote on
any matter to any other Persons either in whole or in part. The Company
will not issue the Senior Notes in definitive form unless the Depositary
at any time is unwilling or unable to continue as a depository and the
Company does not appoint a successor depository within 90 days. Under such
circumstances, the Company will issue Senior Notes in definitive form in
exchange for the entire global security. In addition, the Company may at
any time determine not to have Senior Notes represented by a global
security and, in such event, the Company will issue Senior Notes in
definitive form in exchange for the entire global security. Senior Notes
so issued in definitive form will be issued as registered Senior Notes in
denominations of $1,000 and integral multiples thereof, unless the Company
specifies otherwise. The Senior Notes may bear such legends as set forth
on Exhibit B hereto.
Each global security shall represent such of the outstanding Senior Notes
as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Senior Notes from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Senior Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a global security to reflect the amount of
any increase or decrease in the aggregate principal amount of outstanding
Senior Notes represented thereby shall be made by the Trustee, as
custodian of the global security (the "Custodian"), in accordance with
instructions as further set forth below.
If any beneficial interest in a global security is exchanged for or
transferred to a person who will take delivery thereof in the form of a
beneficial interest in another global security, the principal amount of
Senior Notes represented by such global security shall be reduced
accordingly and an endorsement shall be made on such global security by
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 will take delivery thereof in the form of a beneficial interest
in another global security, such other global security shall be increased
accordingly and an endorsement shall be made on such global security by
the Trustee or by the Depositary at the direction of the Trustee to
reflect such increase.
4. Not applicable.
5. Not applicable.
6. Maturity. The principal amount of all outstanding Senior Notes shall be
payable at their Stated Maturity on June 15, 2012.
7. Interest. The interest rate to be borne by the Senior Notes shall be
7.803% per annum from June 14, 2005 to, but excluding, the Stated Maturity
of the Senior Notes.
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The Company shall pay interest semi-annually in arrears on June 15 and
December 15 of each such year, commencing December 15, 2005 or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Senior Notes shall accrue from
June 14, 2005. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal
and premium, if any, from time to time on demand at a rate that is 1% per
annum in excess of the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest (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.
Any principal of or installment of interest on the Senior Notes that is
overdue shall bear interest at the interest rate then borne by the Senior
Notes (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand
by the Holders.
Interest shall be paid in arrears on each Interest Payment Date to the
Person in whose name the Senior Notes are registered on the Regular Record
Date for such Interest Payment Date; provided that, interest payable at
the Stated Maturity of principal as provided herein will be paid to the
Person to whom principal is payable. Any such interest that is not so
punctually paid or duly provided for will forthwith cease to be payable to
the Holders on such Regular Record Date and may either be paid to the
Person or Persons in whose name the Senior Notes are registered at the
close of business on a special record date (as such term is used in
Section 2.12 of the Indenture) for the payment of such defaulted interest
to be fixed by the Company, notice whereof shall be given to Holders of
the Senior Notes not less than ten days prior to such special record date,
or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange, if any, on which the Senior
Notes may be listed, and upon such notice as may be required by any such
exchange, all as set forth in Section 2.12 of the Indenture.
8. Place and Method of Payment. Payments of the principal of and interest on
the Senior Notes shall be made by the Company at the office of the Paying
Agent which shall initially be The Bank of New York, with any such payment
that is due at the Stated Maturity of any Senior Notes being made upon
surrender of such Senior Notes to the Paying Agent. Payments of interest
(including interest on any Interest Payment Date) will be made at the
option of the Company, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or
(ii) by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the
Trustee at least sixteen days prior to the date for payment by the Person
entitled thereto.
9. (i) Optional Redemption. Except as set forth in clause (ii) of this
Section 9, the Company shall not have the option to redeem the Senior
Notes pursuant to this Section 9 prior to June 15, 2009. Thereafter, the
Company shall have the option to redeem the
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Senior Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest to the applicable redemption date, if redeemed during the
twelve-month period beginning on June 15 of the years indicated below:
YEAR Percentage
- ---- ----------
2009.............................................................. 103.902%
2010.............................................................. 101.951%
2011.............................................................. 100.000%
(ii) Equity Claw-back. Notwithstanding the provisions of clause (i) of
this Section 9, at any time prior to June 15, 2008, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount
of Senior Notes issued under the Indenture at a redemption price equal to
107.803% of the principal amount thereof on the redemption date, plus
accrued and unpaid interest, if any, with the net cash proceeds of any
public or private offering of its Equity Interests (other than
Disqualified Stock); provided that (1) at least 65% of the aggregate
principal amount of Senior Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption (excluding
Senior Notes held by the Company and its Subsidiaries); and (2) that such
redemption shall occur within 120 days of the date of the closing of such
offering.
10. Mandatory Redemption/Redemption at Option of Holders/Repurchase at Option
of Holders.
(i) Mandatory Redemption. Except as set forth in clause (ii) of this
Section 10, the Company is not required to make mandatory redemption or sinking
fund payments with respect to the Senior Notes.
(ii) Redemption at Option of Holders. The holders of at least 25% in
principal amount of then outstanding Senior Notes may deliver a notice to the
Company requiring the Company to redeem the Senior Notes immediately, at a
redemption price equal to 100% of the aggregate principal amount of the Senior
Notes plus accrued and unpaid interest, if any, on any such Senior Notes to the
date of redemption, upon the occurrence of any of the following events (the
"Triggering Events"):
A. failure for 30 days to pay when due interest on the Senior
Notes;
B. failure to pay when due the principal of, or premium, if any,
on the Senior Notes;
C. failure by the Company or any of its Restricted Subsidiaries
to comply with any of the provisions described in of Sections 18(A),
18(C) or 18 (L) hereof (under the headings "Covenants -- Restricted
Payments", "Covenants -- Incurrence
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of Indebtedness and Issuance of Preferred Stock" or "Covenants --
Merger Consolidation or Sale of Assets");
D. failure by the Company or any of its Restricted Subsidiaries
for 30 days after notice to comply with the provisions described in
Section 10(iii) or Section 10(iv) (under the headings "Repurchase at
the Option of Holders -- Offer to Purchase Upon Change of Control"
and "Offer to Purchase on the Application of Excess Proceeds");
E. failure by the Company or any of its Restricted Subsidiaries
for 60 days after notice to observe or perform any of the other
agreements in this Officers' Certificate or the Senior 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, for
so long as any of the 7.25% Convertible Notes due 2010 are
outstanding, any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or, for so long as any of the
7.25% Convertible Notes due 2010 are outstanding, any of its
Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the Issue Date, 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 $10.0 million
or more;
G. the Company or any of its Subsidiaries to pay final judgment
aggregating in excess of $10.0 million or more, which judgment is
not paid, discharged or stayed for a period of 60 days;
H. the Company or any of its Significant Subsidiaries or any
group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary pursuant to or within the
meaning of Bankruptcy Law:
(I) commences a voluntary case,
(II) consents to the entry of an order for relief against it
in an involuntary case,
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(III) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(IV) makes a general assignment for the benefit of its
creditors, or
(V) generally is not paying its debts as they become due; or
I. 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
Restricted Subsidiaries that is a Significant Subsidiary
in an involuntary case;
(II) appoints a Custodian of the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary
or for all or substantially all of the property of the
Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary; or
(III) orders the liquidation of the Company or any of its
Restricted Subsidiaries that is a Significant
Subsidiary; and the order or decree remains unstayed and
in effect for 60 consecutive days.
The holders of a majority in aggregate principal amount
of the then outstanding Senior Notes by notice to the Company
and the Trustee may on behalf of the holders of all of the
Senior Notes waive any existing Triggering Event and its
consequences, except a continuing Triggering Event related to
the payment of interest on, or the principal of, the Senior
Notes.
In the case of any Triggering Event occurring 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 Senior Notes pursuant
to the provisions of this Officers' Certificate relating to
redemption at the option of the Company, an equivalent premium
will also become and be immediately due and payable to the
extent permitted by law upon the redemption of the Senior
Notes at the option of the holders.
(iii) Offer to Purchase Upon Change of Control.
A. Upon the occurrence of a Change of Control, each Holder
of Senior Notes shall have the right to require the
Company to purchase all or any part (equal to $1,000 in
principal amount or an integral multiple thereof) of
such Holder's Senior Notes pursuant to the offer
described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid
interest (the "Change of Control Payment"). Within 10
days following any Change of Control, the Company shall
mail a notice to each Holder describing the
6
transaction or transactions that constitute the Change
of Control and stating: (i) that the Change of Control
Offer is being made pursuant to the provisions of this
Section 10(iii) and that all Senior Notes tendered shall
be accepted for payment; (ii) 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"); (iii)
that any Senior Note not tendered shall continue to
accrue interest; (iv) that, unless the Company defaults
in the payment of the Change of Control Payment, all
Senior Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after
the Change of Control Payment Date; (v) that Holders
electing to have any Senior Notes purchased pursuant to
a Change of Control Offer shall be required to surrender
the Senior Notes 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; (vi) that Holders 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 facsimile transmission or letter setting
forth the name of the Holder, the principal amount of
Senior Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have the
Senior Notes purchased; and (vii) that Holders whose
Senior Notes are being purchased only in part shall be
issued new Senior Notes equal in principal amount to the
unpurchased portion of the Senior Notes surrendered,
which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
B. On the Change of Control Payment Date, the Company
shall, to the extent lawful, (i) accept for payment all
Senior Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Senior Notes or
portions thereof so tendered and (iii) deliver or cause
to be delivered to the Trustee the Senior Notes so
accepted together with an officers' certificate stating
the aggregate principal amount of Senior Notes or
portions thereof being purchased by the Company. The
Paying Agent shall promptly mail to each Holder of
Senior Notes so tendered the Change of Control Payment
for such Senior Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Senior Note equal in
principal amount to any unpurchased portion of the
Senior Notes surrendered, if any; provided that each
such new Senior Note shall be in a principal amount of
$1,000 or an integral multiple thereof.
C. 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 in the Indenture applicable to a Change of
Control
7
Offer made by the Company and purchases all Senior Notes
validly tendered and not withdrawn under such Change of
Control Offer. The provisions under this Officers'
Certificate or the Indenture relative to the Company's
obligations to make an offer to repurchase the Senior
Notes as a result of a Change of Control may be waived
or modified with the written consent of the Holders of a
majority in principal amount of the Senior Notes then
outstanding.
D. The Company shall comply, to the extent applicable, with
the requirements of Rule 14e-1 of the Exchange Act and
any other securities laws or regulations applicable to
any Change of Control Offer. To the extent that the
provisions of any such securities laws or securities
regulations conflict with the provisions of the covenant
described above, the Company shall comply with the
applicable securities laws and regulations and shall not
be deemed to have breached its obligations under the
covenant described above by virtue thereof.
(iv) Offer to Purchase by Application of Excess Proceeds.
A. In the event that, pursuant to Section 18(D) hereof, the
Company shall be required to commence an offer to all
Holders to purchase the maximum principal amount of
Senior Notes and all other Indebtedness that is pari
passu with the Senior Notes containing provisions
similar to those set forth in this Officers' Certificate
or the Indenture (an "Asset Sale Offer") it shall follow
the procedures specified below.
B. The 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 Senior Notes and
such other pari passu Indebtedness required to be
purchased pursuant to paragraph A above (the "Offer
Amount") or, if less than the Offer Amount has been
tendered, all Senior Notes and such other pari passu
Indebtedness tendered in response to the Asset Sale
Offer. Payment for any Senior Notes so purchased shall
be made in the same manner as interest payments are
made.
C. If the Purchase Date is on or after an interest record
date and on or before the related interest payment date
shall be paid to the Person in whose name a Senior Note
is registered at the close of business on such record
date, and no additional interest shall be payable to
Holders who tender Senior Notes pursuant to the Asset
Sale Offer.
D. Upon the commencement of an Asset Sale Offer, the
Company shall send, by first class mail, a notice to the
Trustee and each of the Holders, with a copy to the
Trustee. The notice shall contain all instructions and
materials
8
necessary to enable such Holders to tender Senior Notes
pursuant to the Asset Sale Offer. The Asset Sale Offer
shall be made to all Holders. The notice, which shall
govern the terms of the Asset Sale Offer, shall state:
I. that the Asset Sale Offer is being made pursuant
to the provisions of this Section 10(iv) and
Section 18(D) hereof (under the heading "Covenants
-- Asset Sales") and the length of time the Asset
Sale Offer shall remain open;
II. the Offer Amount, the purchase price and the
Purchase Date;
III. that any Senior Note not tendered or accepted for
payment shall continue to accrue interest;
IV. that, unless the Company defaults in making such
payment, any Senior Note accepted for payment
pursuant to the Asset Sale Offer shall cease to
accrue interest after the Purchase Date;
V. that Holders electing to have a Senior Note
purchased pursuant to an Asset Sale Offer may only
elect to have all of such Senior Note purchased
and may not elect to have only a portion of such
Senior Note purchased;
VI. that Holders electing to have a Senior Note
purchased pursuant to any Asset Sale Offer shall
be required to surrender the Senior Note or
transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a
Paying Agent at the address specified in the
notice at least three Business Days before the
Purchase Date;
VII. that Holders shall be entitled to withdraw their
election if the Company, the depositary or the
Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the
principal amount of the Senior Note the Holder
delivered for purchase and a statement that such
Holder is withdrawing his election to have such
Senior Note purchased;
VIII. that, if the aggregate principal amount of Senior
Notes and such other pari passu Indebtedness
tendered by Holders exceeds the Offer Amount, the
Company shall select the Senior Notes and such
other pari passu Indebtedness to be purchased on a
pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only
Senior Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased);
and
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IX. that Holders whose Senior Notes were purchased
only in part shall be issued new Senior Notes
equal in principal amount to the unpurchased
portion of the Senior Notes surrendered (or
transferred by book-entry transfer).
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
Senior Notes and such other pari passu Indebtedness or
portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been
tendered, all Senior Notes, and such other pari passu
Indebtedness or portions thereof tendered, and shall
deliver to the Trustee an Officers' Certificate stating
that such Senior Notes, and such other pari passu
Indebtedness or portions thereof were accepted for
payment by the Company in accordance with the terms of
this Section 10(ii). The Company, the Depositary or the
Paying Agent, as the case may be, shall promptly (but in
any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Senior Notes tendered
by such Holder and accepted by the Company for purchase,
and the Company shall promptly issue a new Senior Note,
and the Trustee, upon written request from the Company
shall authenticate and mail or deliver such new Senior
Note to such Holder, in a principal amount equal to any
unpurchased portion of the Senior Note surrendered. Any
Senior 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 no later than the Purchase Date.
F. Other than as specifically provided in this Section
10(iv), any purchase pursuant to this Section 10(iv)
shall be made pursuant to the provisions of Sections
3.01 through 3.07 of the Indenture.
11. Denominations. The Senior Notes shall be issued in denominations of
$1,000, or any integral multiple thereof, whether they are issued in
global or definitive form.
12. Not applicable.
13. Not applicable.
14. Not applicable.
15. Not applicable.
16. Not applicable.
17. Not applicable.
18. Covenants
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A. Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(I) 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;
(II) 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;
(III) 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 Senior Notes, except
a payment of interest or principal at the Stated Maturity
thereof; or
(IV) make any Restricted Investment (all such payments and other
actions set forth in these clauses (I) through (IV) above
being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(I) no Default or Event of Default has occurred and is continuing
or would occur as a consequence of such Restricted Payment;
(II) 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 the first paragraph of
Section 18(C) (under the heading "Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock"); and
(III) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Issue Date (excluding
Restricted
11
Payments permitted by clauses (II), (III) (IV), (VI) and (IX)
of the next succeeding paragraph), 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 April
1, 2004 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 Issue Date
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 Issue Date 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 Issue Date, the lesser of (i) the fair market value
of all Investments of the Company and any Restricted
Subsidiary in such Subsidiary as of the date of such
redesignation and (ii) the fair market value of the
Company's and any Restricted Subsidiary's Investment in
such Subsidiary as of the date on which such Subsidiary
was originally designated as an Unrestricted Subsidiary.
The preceding provisions shall not prohibit:
12
(I) 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 Officers' Certificate or the
Indenture;
(II) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of
the Company or any Subsidiary Guarantor 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 (III)(b) of the preceding
paragraph;
(III) 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;
(IV) the payment of any dividend or other payment or
distribution by a Restricted Subsidiary of the Company
to the holders of its Equity Interests on a pro rata
basis;
(V) 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 $3.0 million in
any twelve-month period;
(VI) 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
or any of its Restricted Subsidiaries held by such
trust;
(VII) payments on stock purchase contracts obligating the
holders thereof to purchase common stock of the Company;
13
(VIII) the payment of any dividend by SPPC on the SPPC Class A
Series I preferred stock outstanding on the Issue Date
at a rate not exceeding the dividend rate in effect on
the Issue Date; and
(IX) other Restricted Payments in an aggregate amount since
the Issue Date not to exceed $50.0 million;
provided that, with respect to clauses (II), (III), (V) and (IX)
above, no Default or Event of Default shall have occurred and be
continuing immediately after such transaction.
To the extent that the Company or any of its Restricted
Subsidiaries is obligated to make payments to holders of any of its
debt securities that are convertible into, or exchangeable for,
Capital Stock of the Company or any of its Restricted Subsidiaries
in respect of any dividend or other payment or distribution on
account of such Capital Stock that would have been payable to such
holders had they converted or exchanged their debt securities for
such Capital Stock, such payments shall be treated as Restricted
Payments.
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 "Restricted
Payment" covenant were computed, together with a copy of any
fairness opinion or appraisal required under this Officers'
Certificate.
B. Dividend and Other Payment Restrictions Affecting
Subsidiaries.
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:
(I) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted
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;
14
(II) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(III) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.
However, the preceding restrictions applicable to dividends and
other payment restrictions shall not apply to encumbrances or restrictions
existing under or by reason of:
(I) agreements governing Existing Indebtedness and Credit
Facilities as in effect on the Issue Date and other customary
encumbrances and restrictions existing on or after the Issue
Date 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 Issue Date;
provided that the application of such restrictions or
encumbrances to additional Restricted Subsidiaries not subject
thereto on the Issue Date shall not be deemed to make such
restrictions or encumbrances more restrictive;
(II) this Officers' Certificate, the Indenture and the Senior Notes
and other customary encumbrances and restrictions existing in
indentures and notes of the Company after the Issue Date 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 this Officers'
Certificate, the Indenture and the Senior Notes;
(III) 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;
(IV) 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 Officers' Certificate or the Indenture to be incurred;
15
(V) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past
practices;
(VI) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on that
property of the nature described in clause (III) of the
preceding paragraph;
(VII) 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 of the Company, are necessary to effect such
Qualified Receivables Transaction;
(VIII) 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;
(IX) 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;
(X) Liens securing Indebtedness otherwise permitted to be
incurred under the provisions of Section 18(F) (under the
heading "Covenants -- Liens") that limit the right of the
debtor to dispose of the assets subject to such Liens; and
(XI) 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. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently
or otherwise, with respect to (collectively, "incur") any Indebtedness
(including Acquired Debt), and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries
to issue any shares of preferred stock; provided, however, that the
Company may incur Indebtedness (including Acquired Debt) or issue
Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness
(including Acquired Debt) or issue preferred 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
16
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.
The first paragraph of this Section 18(C) shall not prohibit
the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(I) the incurrence by the Company and any Restricted
Subsidiary pursuant to this clause (I) 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 and its Subsidiaries
thereunder), together with the principal component of
amounts outstanding under Qualified Receivables
Transactions, not to exceed $500.0 million at any time
outstanding;
(II) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(III) the incurrence by the Company of Indebtedness
represented by the Senior Notes to be issued on the
Issue Date and the incurrence by any Subsidiary
Guarantor of a Subsidiary Guarantee of those Senior
Notes;
(IV) 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
Restricted Subsidiary, in an aggregate principal amount,
including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (IV), not
to exceed $40.0 million at any time outstanding;
(V) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to
refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that was incurred under the
first paragraph of this covenant or clauses (II), (III)
(V) or (XII) of this paragraph;
(VI) the incurrence by the Company or any of its Restricted
Subsidiaries (other than a Receivables Entity) of
intercompany
17
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 Senior
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;
(c) 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
(VI); 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 (VI) 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;
(VII) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations;
(VIII) 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 covenant; provided that in
the event the Indebtedness that is being guaranteed is
subordinated in right of payment to the Senior Notes,
then the Guarantee of that Indebtedness by the Company
shall be subordinated in right of payment to the Senior
Notes;
(IX) 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
18
additional shares of such Disqualified Stock shall not
be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this
covenant; provided, in each such case, that the amount
thereof is included in the Fixed Charges of the Company
as accrued;
(X) 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);
(XI) 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 (XI);
(XII) the incurrence by the Company or any Restricted
Subsidiary of additional Indebtedness consisting of
securities issued pursuant to the G&R Indentures in
respect of claims relating to the Company's or any
Restricted Subsidiary's obligations pursuant to
agreements with gas, electric power and other energy
suppliers that have been terminated as of the Issue
Date;
(XIII) 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 $40.0 million at any
time outstanding;
(XIV) the issuance by the Company or any Restricted
Subsidiary of up to $200.0 million of securities issued
to secure Standard Securitization Undertakings entered
into by the Company or any Restricted Subsidiary in
connection with a Qualified Receivables Transaction;
provided that the obligation of the Company or such
Restricted Subsidiary 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
19
(b) deemed to have been paid or otherwise satisfied
and discharged to the extent that the Company or
such Restricted Subsidiary 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 shall not be included for purposes
of determining the aggregate amount outstanding under Credit
Facilities that is permitted under clause (I) above.
(XV) the issuance by a Receivables Entity of a Purchase
Money Note in connection with a Qualified Receivables
Transaction;
(XVI) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness to finance
capital expenditures incurred pursuant to NPC's 2003
Resource Plan and SPPC's 2004 Resource Plan as approved
or amended under order by the PUCN 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
(XVI); and
(XVII) the incurrence by the Company or any Restricted
Subsidiary of additional Indebtedness in an aggregate
principal amount (or accreted value, as applicable) at
any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance
or replace any Indebtedness incurred pursuant to this
clause (XVII), not to exceed $75.0 million at any time
outstanding.
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 Senior 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.
For purposes of determining compliance with this Section
18(C):
(I) 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 (I) through (XVII) above, or is entitled to
be incurred pursuant to the first paragraph of this
Section 18(C), the Company shall be permitted to
classify (or later classify or reclassify such
Indebtedness, in whole
20
or in part in its sole discretion) such item of
Indebtedness in any manner that complies with this
Section 18(C); and
(II) for the purposes of determining compliance with any U.S.
dollar-denominated restriction on the incurrence of
Indebtedness denominated in a foreign currency, the U.S.
dollar-equivalent principal amount of such Indebtedness
incurred pursuant thereto shall be calculated based on
the relevant currency exchange rate in effect on the
date that such Indebtedness was incurred.
D. Asset Sales.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(I) 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;
(II) for any agreement to make an Asset Sale that is entered
into after the Issue Date, the fair market value is
determined by (a) an executive officer of the 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
(III) at least 75% of the consideration received in the Asset
Sale by the Company or such Restricted Subsidiary is in
the form of cash or Cash Equivalents. 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 Senior
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, Senior 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
21
such Restricted Subsidiary into cash, to the
extent of the cash received in that conversion.
Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or any applicable Restricted Subsidiary may
apply those Net Proceeds at its option:
(I) to repay senior Indebtedness of the Company or any
Indebtedness of its Restricted Subsidiaries;
(II) to acquire all or substantially all of the assets of, or
a majority of the Voting Stock of, another Permitted
Business;
(III) to make or enter into a definitive agreement to make a
capital expenditure; or
(IV) to acquire other long-term assets that are used or
useful in a Permitted Business.
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
Officers' Certificate or the Indenture.
Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the preceding paragraph shall constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $25.0 million, the Company shall make an Asset Sale Offer to
all Holders of Senior Notes and all Holders of other Indebtedness
that is pari passu with the Senior Notes containing provisions
similar to those set forth in this Officers' Certificate and the
Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets to purchase the maximum principal amount
of Senior Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset
Sale Offer shall be equal to 100% of principal amount of Senior
Notes plus accrued and unpaid interest 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
Officers' Certificate or the Indenture. If the aggregate principal
amount of Senior Notes and other pari passu Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds,
the Trustee shall select the Senior Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis subject to
authorized denominations. Upon completion of each Asset Sale Offer,
the amount of Excess Proceeds (as identified by the Company in an
Officer's Certificate) shall be reset at zero.
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
22
Restricted Subsidiaries taken as a whole, such transaction shall be
governed by the provisions of Sections 10(iii) and 18(L) (under the
headings "Repurchase at the Option of the Holders -- Change of
Control" and "Covenants -- Merger. Consolidation or Sale of Assets")
and not by the provisions of this Section 18(D).
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 each repurchase of Senior Notes pursuant to an
Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section, the
Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations
under the Asset Sale provisions of this Officers' Certificate by
virtue of such conflict.
E. Transactions with Affiliates.
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:
(I) 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
(II) 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
covenant 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 such Affiliate Transaction from a
financial point of view issued by an accounting,
appraisal or investment banking firm of national
standing.
23
The following items shall not be deemed to be Affiliate Transactions and,
therefore, shall not be subject to the provisions of the prior paragraph:
(I) 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;
(II) transactions between or among the Company and/or its Restricted
Subsidiaries (other than a Receivables Entity);
(III) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in such Person;
(IV) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Company;
(V) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company;
(VI) Permitted Investments pursuant to this Officers' Certificate and
Restricted Payments that are permitted by the provisions of this
Officers' Certificate in Section 18(A)(under the heading "Covenants
-- Restricted Payments");
(VII) 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;
(VIII) transactions pursuant to any agreement in effect on the date of
this Officers' Certificate as the same may be amended from time to
time in any manner not materially less favorable to the Holders of
the Senior Notes;
(IX) 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
aggregate amount not to exceed $2.0 million outstanding at any one
time; and
(X) 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
24
acquisitions of Permitted Investments in connection with a Qualified
Receivables Transaction.
F. 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 Lien of any kind securing
Indebtedness, Attributable Debt or trade payables on any of their property or
assets, now owned or hereafter acquired, except Permitted Liens.
G. Business Activities.
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.
H. Sale and Leaseback Transactions.
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:
(I) 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 the first paragraph of Section
18(C)(under the heading "Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock");
(II) 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
(III) 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 10(iv)(under the heading
"Offer to Purchase by Application of Excess Proceeds");
provided, however, that the foregoing clauses (I) and (III) shall be
suspended during any period in which the Company and its Restricted
Subsidiaries are not subject to the Suspended Covenants.
I. Future Subsidiary Guarantees.
25
The Company shall not permit any Restricted Subsidiary to guarantee the
payment of any Indebtedness of the Company unless (i) such Restricted Subsidiary
simultaneously executes and delivers to the Trustee on behalf of the holders of
the Senior Notes 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
Senior 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 Senior Notes substantially
to the same extent as such Indebtedness is subordinated to the Senior Notes;
(ii) 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 Senior Notes; and (iii) 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 paragraph shall
not be applicable to any guarantee of any Restricted Subsidiary that (A) existed
at the time such Person became a Restricted Subsidiary of the Company and (B)
was not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary of the Company.
Notwithstanding the foregoing and the other provisions of this Officers'
Certificate and the Indenture, 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:
(I) the sale or other disposition is in compliance with the applicable
provisions of this Officers' Certificate, including Section
18(D)(under the heading "Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock"); and
(II) the Subsidiary Guarantor is also released or discharged from its
obligations under the guarantee, which resulted in the creation of
such Subsidiary Guarantee, except a discharge or release by or as a
result of payment under such guarantee.
J. Designation of Restricted and Unrestricted Subsidiaries.
26
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 businesses currently operated by each of NPC and SPPC
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 the first paragraph of Section
18(A)(under the heading "Covenants -- Restricted Payments"). That designation
shall only be permitted if the Investment would be permitted at that time and if
the Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The Board of Directors of the Company 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 18(C)(under the heading "Covenants -- 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.
K. 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 Senior Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Officers'
Certificate, the Indenture or the Senior Notes unless such consideration is
offered to be paid and is paid to all Holders of the Senior 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.
L. Merger, Consolidation or Sale of Assets.
The Company may 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:
(I) 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,
27
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;
(II) 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
expressly assumes by supplemental indenture executed and delivered
to the Trustee in form reasonably satisfactory to the Trustee;
(III) immediately after such transaction no Default or Event of Default
exists;
(IV) immediately after 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,
either 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 be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 18(C)(under the heading
"covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock") or the Fixed Charge Coverage Ratio of the Company or the
surviving Person, as applicable, or of 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 (iv) shall be suspended during any period in which
the Company and its Restricted Subsidiaries are not subject to the
Suspended Covenants; and
(V) 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 covenant
and that all conditions precedent provided for in this covenant
relating to such transaction or series of transactions have been
complied with.
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
28
any other Person. Clauses (IV) and (V) of this Section 18(L) 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.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with this Section 18(L) hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Officers' Certificate and the Indenture
referring to the Company shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Officers' Certificate and the Indenture with the same effect as if such
successor Person had been named as the Company herein, provided, however, that
the predecessor company shall not be relieved from the obligation to pay the
principal of and interest on the Senior Notes (and its obligations to the
Trustee pursuant to Section 7.07 of the Indenture) except in the case of a sale
of all of the Company's assets that meets the requirements of this Section
18(L).
M. Corporate Existence.
Subject to Section 18(L) hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Restricted
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not
adverse in any material respect to the Holders of the Senior Notes.
N. Taxes. The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent all material taxes,
assessments, and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, except such as are contested in good faith and by appropriate
proceedings or where the failure to pay or discharge the same would not have a
material adverse effect on the ability of the Company to perform its obligations
under the Senior Notes, this Officers' Certificate or the Indenture.
29
O. Suspension of Certain Covenants.
During any period of time that the Senior 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 Officers' Certificate:
Section 10(iv)(under the heading "Offer to Purchase by Application
of Excess Proceeds"), Section 18(A)(under the heading "Covenants --
Restricted Payments"), Section 18(B)(under the heading "Covenants --
Dividends and Other Payment Restriction Affecting Subsidiaries"),
Section 18(C)(under the heading "Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock"), Section 18(E)(under
the heading "Covenants -- Transactions with Affiliates"), Section
18(J)(under the heading "Covenants -- Designation of Restricted and
Unrestricted Securities") and Section 18(G)(under the heading
"Covenants -- Business Activities") (collectively, the "Suspended
Covenants"); provided, however, that the provisions in Section 4.04
of the Indenture and Section 10(iii)(under the heading "Repurchase
at the Option of the Holders -- Change of Control"), Section
18(H)(under the heading "Covenants -- Sale and Leaseback
Transactions"), Section 18(L)(under the heading "Covenants --
Merger, Consolidation or Sale of Assets"), Section 18(I)(under the
heading "Covenants -- Future Subsidiary Guarantees"), Section
18(F)(under the heading "Covenants -- Liens") and Section
18(K)(under the heading "Covenants -- Payments for Consents") of
this Officers' Certificate shall not be so suspended.
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 paragraph and, subsequently, either of the Rating Agencies
withdraws its ratings or downgrades the ratings assigned to the
Senior Notes below the Investment Grade Ratings so that the Senior
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 Indenture (each such date of
reinstatement being the "Reinstatement Date"), including the
preceding sentence. 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 18(A) as
though such covenant had been in effect during the entire period of
time from which the Senior 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.
19. Other Matters Regarding Remarketing.
(i) Tax Treatment. The Company agrees, and by purchasing a beneficial
ownership interest in the Senior Notes each Holder of Senior Notes will be
deemed to have agreed, for United States federal income tax purposes (a)
to treat the Senior Notes and the purchase contracts as separate assets,
(b) to treat the Senior Notes as issued on May 24,
30
2005, (c) to treat the Senior Notes acquired in the remarketing on June
14, 2005 as a continuation of those Senior Notes issued on May 24, 2005,
(d) to treat the exchange of the purchase contracts pursuant to the
Exchange Offer as not being a realization event, (e) to treat the old
notes as exchanged in the Exchange Offer for the Senior Notes and the
exchange fee (as described in the Company's exchange offer prospectus
dated April 15, 2005) in a "recapitalization," (f) assuming that the
Senior Notes will be listed for trading on the New York Stock Exchange
within 30 days after the consummation of the Exchange Offer, to treat the
Senior Notes as traded on an established market within the meaning of
Treas. Reg. Sec. 1.1273-2(f), (g) to treat the acquisition of a Corporate
PIES as the acquisition of a unit consisting of a stock purchase contract
and a senior note issued by the Company and to treat the Senior Notes as
indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the "Contingent
Payment Regulations") and (h) to be bound by the Company's determination
of the "comparable yield" and "projected payment schedule," within the
meaning of the Contingent Payment Regulations, with respect to the Senior
Notes. The Company has determined that the comparable yield is an annual
rate of 7.50%, compounded semiannually. Holders may obtain the projected
payment schedule for the Senior Notes by submitting a written request for
such information to: Sierra Pacific Resources, Attention: Manager of
Finance and Treasury, P.O. Box 30150, 6100 Neil Road, Reno, Nevada 89520,
Telephone: (775) 834-5643. For the purposes of this Section 19(i) the term
"Exchange Offer" shall mean the exchange offer of the Company's existing
Corporate PIES for a like amount of the Company's new Corporate PIES that
were issued May 24, 2005 pursuant to and in accordance with the terms of
the Company's exchange offer prospectus dated April 15, 2005, as amended,
modified and supplemented from time to time.
20. Definitions. Set forth below are certain defined terms used in this
Officers' Certificate. Reference is made to the Indenture for the
definitions of any capitalized used herein for which no definition is
provided herein.
"Acquired Debt" means, with respect to any specified Person:
(i) 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
(ii) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
31
"Asset Sale" means:
(i) 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 of
Section 10(iii) (under the heading "Repurchase at the Option of Holders --
Change of Control") and/or the provisions of Section 18(L) (under the heading
"Covenants -- Merger, Consolidation or Sale of Assets") and not by the
provisions of Section 18(D)(under the heading "Covenants -- Asset Sales"); and
(ii) 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:
(i) any single transaction or series of related transactions that
involves assets having a fair market value of less than $5.0 million;
(ii) a transfer of assets between or among the Company and its Restricted
Subsidiaries;
(iii) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(iv) a Restricted Payment or Permitted Investment that is permitted by
the provisions of Section 18(A)(under the heading "Covenants -- Restricted
Payments");
(v) 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;
(vi) 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 Company 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
provisions of Section 18(D); provided further that the fair market value of the
assets sold or disposed of is determined as provided in the final paragraph of
Section 18(A)(under the heading "Covenants -- Restricted Payments"); and
(vii) transfers of assets by the Company and its Restricted Subsidiaries
required under statute or regulation in connection with renewable energy
contracts.
32
"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.
"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:
(i) 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;
(ii) with respect to a partnership, the Board of Directors of the general
partner of the partnership; and
(iii) with respect to any other Person, the board or committee of such
Person serving a similar function.
"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:
(i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;
(iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(iv) 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:
(i) United States dollars;
33
(ii) 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;
(iii) 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;
(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above;
(v) 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
(vi) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (i) through (v) of this
definition.
"Change of Control" means the occurrence of any of the following:
(i) 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);
(ii) the adoption of a plan relating to the liquidation or dissolution of
the Company;
(iii) 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, measured by voting power rather
than number of shares;
(iv) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors;
(v) the first day on which the Company ceases to be a Beneficial Owner of
a majority of the Voting Stock of either NPC or SPPC; or
(vi) so long as any of the 7.25% Convertible Notes due 2010 are
outstanding, a Change of Control as defined in the Company's Indenture dated
February 14, 2003, between the Company and The Bank of New York, as trustee,
governing the 7.25% Convertible Notes due 2010, as amended, modified or
supplemented from time to time.
"Commission" means the Securities and Exchange Commission or any successor
agency.
34
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
(i) 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
(ii) 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
(iii) 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
(iv) 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
(v) all extraordinary, unusual or non-recurring items of loss or
expense; minus
(vi) all extraordinary, unusual or non-recurring items of gain or
revenue; minus
(vii) 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:
(i) 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;
35
(ii) 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; and
(iii) the cumulative effect of a change in accounting principles shall be
excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who:
(i) was a member of such Board of Directors on the Issue Date; or
(ii) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such
Board 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 an
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:
(i) no greater than the amount required to be paid under such Credit
Facility that is secured by such payment obligation;
(ii) payable no earlier than such amount is required to be paid under such
Credit Facility; and
(iii) 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 shall not be included for purposes of determining the aggregate
amount outstanding under Credit Facilities that is permitted under Section
18(C)(under the heading "Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock").
"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 Senior Notes mature. Notwithstanding
the preceding sentence, any Capital Stock that would
36
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 18(C)(under the
heading "Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock").
"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).
"Existing Indebtedness" means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under a Credit Facility) in existence on
the Issue Date, until such amounts are repaid.
"First Mortgage Indentures" means (i) the Indenture of Mortgage, dated as
of October 1, 1953, between Nevada Power and Deutsche Bank Trust Company
Americas, as trustee, as modified, amended or supplemented at any time or from
time to time by supplemental indentures and (ii) the Indenture of Mortgage,
dated as of December 1, 1940, between SPPC 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:
(i) 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
(ii) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(iii) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries, whether or
not such Guarantee or Lien is called upon; plus
(iv) the product of (a) all dividends, whether paid or accrued and whether
or not in cash, on any series of preferred stock of such Person or any of its
Restricted Subsidiaries, other than dividends on Equity Interests payable solely
in Equity Interests of the Company (other than Disqualified Stock) or to the
Company or a Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
37
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
(v) all distributions by a Trust Preferred Vehicle to persons other than
the Company or any of its Restricted Subsidiaries of amounts received as
interest by such trust on the subordinated Indebtedness of such Person or any of
its Restricted Subsidiaries held by such trust; plus
(vi) any payments on stock purchase contracts obligating the holders
thereof to purchase common stock of the Company.
"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:
(i) 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);
(ii) 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
(iii) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges
38
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 Issue Date.
"G&R Indentures" means (i) the General and Refunding Mortgage Indenture,
dated as of May 1, 2001, as amended and supplemented to the date hereof ,
between NPC and The Bank of New York, as trustee, and (ii) the General and
Refunding Mortgage Indenture, dated as of May 1, 2001, as amended and
supplemented to the date hereof, between SPPC and The Bank of New York, as
trustee.
"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:
(i) 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;
(ii) 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;
(iii) 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
(iv) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates or currency exchange rates.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(i) in respect of borrowed money;
(ii) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
39
(ii) in respect of banker's acceptances;
(iv) representing Capital Lease Obligations;
(v) 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
(vi) 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 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:
(i) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(ii) 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.
"Issue Date" means June 14, 2005.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's or BBB- (or the equivalent) by S&P.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 18(A)(under the
heading "Covenants -- 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 the final paragraph of Section 18(A)(under the heading "Covenants --
Restricted Payments").
40
"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.
"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:
(i) 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
(ii) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, and amounts required to be applied
to the repayment of Indebtedness, other than Senior Debt secured by a 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:
(i) 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;
(ii) 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 Senior 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
41
(iii) 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.
"NPC" means Nevada Power Company, a Nevada corporation.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Business" means any business that derives a majority of its
revenues from any business engaged in by the Company and its Restricted
Subsidiaries on the Issue Date 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 Issue Date, as determined in good
faith by the Board of Directors of the Company.
"Permitted Investments" means:
(i) any Investment in the Company or in a Restricted Subsidiary of the
Company (other than a Receivables Entity);
(ii) any Investment in Cash Equivalents;
(iii) 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);
(iv) 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 10(iv)(under the heading "Offer to Purchase by Application of
Excess Proceeds");
(v) any acquisition of assets to the extent it is in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the Company;
(vi) 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;
(vii) Hedging Obligations;
42
(viii) 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;
(ix) any Investments made in accordance with clause (vi) of the definition
of "Asset Sales;"
(x) any Investments by the Company or any Restricted Subsidiary in
Tuscarora Gas Transmission 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 (x) since the Issue Date, not to exceed $50.0
million; and
(xi) 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 (xi) since the Issue Date, not to exceed $50.0 million.
"Permitted Liens" means:
(i) Liens securing any Indebtedness under a Credit Facility that was
permitted by the terms of this Indenture to be incurred, and all Obligations and
Hedging Obligations relating to such Indebtedness;
(ii) Liens in favor of the Company or any Subsidiary Guarantors;
(iii) 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 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;
(iv) 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
Liens were in existence prior to the contemplation of such acquisition;
(v) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature incurred
in the ordinary course of business;
(vi) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (IV) of the second paragraph of Section 18(C)(under the
heading "Covenants -- Incurrence
43
of Indebtedness and Issuance of Preferred Stock")covering only the assets
acquired with such Indebtedness;
(vii) Liens existing on the Issue Date and Liens under the First Mortgage
Indentures and the G&R Indentures;
(viii) 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;
(ix) 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 $35.0 million at any one time outstanding;
(x) Liens to secure Indebtedness permitted by clauses (VII), (XIII), (XVI)
or (XVII) of the second paragraph of Section 18(C)(under the heading "Covenants
- -- Incurrence of Indebtedness and Issuance of Preferred Stock");
(xi) Liens securing any Indebtedness issued or to be issued under the G&R
Indentures that was permitted to be incurred under the terms of Section
18(C)(under the heading "Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock");
(xii) Liens securing Permitted Refinancing Indebtedness incurred to
refinance Indebtedness that was previously so secured, provided that any such
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 Lien arose, could secure) the Indebtedness being refinanced or is in
respect of property that is the security for a Permitted Lien hereunder;
(xiii) 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
(xiv) Liens, including pledges, rights of offset and bankers' liens, on
deposit accounts, instruments, investment accounts and investment property
(including cash, cash equivalents and marketable securities) from time to time
maintained with or held by any financial and/or depository institutions, in each
case solely to secure any and all obligations now or hereafter existing of the
Company or any of its Subsidiaries in connection with any deposit account,
investment account or cash management service (including ACH, Fedwire, CHIPS,
concentration and zero balance accounts, and controlled disbursement, lockbox or
restricted accounts) now or hereafter provided by any financial and/or
depository institutions to or for the benefit of the Company, any of its
Subsidiaries or any special purpose entity directly or indirectly providing
loans to or making receivables purchases from the Company or any of its
Subsidiaries.
"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
44
extend, refinance, renew, replace, defease or refund other Indebtedness of the
Company or any of its Restricted Subsidiaries (other than intercompany
Indebtedness); provided that:
(i) 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);
(ii) if such Permitted Refinancing Indebtedness is issued on or after the
first anniversary of the Issue Date, such Permitted Refinancing Indebtedness has
a final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(iii) if such Permitted Refinancing Indebtedness is issued on or after the
first anniversary of the Issue Date, and the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is contractually
subordinated in right of payment to the Senior 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 Senior Notes on terms at least
as favorable to the Holders of Senior Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and
(iv) such Indebtedness is incurred either by the Company or by the
Subsidiary that is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
Permitted Refinancing Indebtedness shall also include any Indebtedness of SPPC,
not to exceed $50.0 million, incurred by SPPC at the same time and with the same
terms as any Indebtedness of SPPC issued to refinance its Indebtedness maturing
by 2005.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"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.
"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
45
Receivables Entity (in the case of a transfer by the Company or any of its
Restricted Subsidiaries) and (2) any other Person (in the case of a transfer by
a Receivables Entity), or may grant a security interest in, any accounts
receivable (whether now existing or arising in the future) of the Company or any
of its Restricted Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such accounts receivable, all
contracts and all guarantees or other obligations in respect of such accounts
receivable, the proceeds of such receivables and other assets which are
customarily transferred, or in respect of which security interests are
customarily granted in connection with asset securitization involving accounts
receivable.
"Rating Agencies" means S&P and Moody's, or if S&P or Moody's or both
shall not make a rating on the 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 its 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 any
of its Restricted Subsidiaries (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 of the Company (as provided below) as a Receivables
Entity:
(i) 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;
(ii) 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
(iii) 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.
46
Any such designation by the Board of Directors of the Company 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.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"S & P" means Standard & Poor's Rating Group, Inc., or any successor to
the rating agency business thereof
"SPPC" means Sierra Pacific Power Company, a Nevada corporation.
"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.
"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.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(i) 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
(ii) 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 Senior Notes to be
executed by any Subsidiary of the Company pursuant to Section 18(J).
"Subsidiary Guarantors" means any Subsidiary of the Company that executes
a Subsidiary Guarantee in accordance with the provisions of this Indenture, and
their respective successors and assigns.
47
"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 or any of its Restricted Subsidiaries.
"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:
(i) has no Indebtedness other than Non-Recourse Debt;
(ii) 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;
(iii) 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;
(iv) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries; and
(v) has at least one director on its Board of Directors 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 18(C)(under the heading
"Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock"). 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 this 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 the covenant described under Section 18(C)(under
the heading "Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock"), the Company shall be in default of such covenant.
"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
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
48
(i) 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
(ii) the then outstanding principal amount of such Indebtedness.
Other Definitions.
Defined in
Term Section
----------
"Affiliate Transaction"........................................... 18(E)
"Asset Sale Offer"................................................ 10(iv)
"Change of Control Offer"......................................... 10(iii)
"Change of Control Payment"....................................... 10(iii)
"Change of Control Payment Date".................................. 10(iii)
"Excess Proceeds"................................................. 18(D)
"incur"........................................................... 18(C)
"Interest Payment Date"........................................... 7
"Offer Amount".................................................... 10(iv)
"Offer Period".................................................... 10(iv)
"Payment Default"................................................. 10(ii)
"Permitted Debt".................................................. 18(C)
"Purchase Date"................................................... 10(iv)
"Reinstatement Date".............................................. 18(M)
"Restricted Payments"............................................. 18(A)
"Suspended Covenants"............................................. 18(M)
"Triggering Event" ............................................... 10(ii)
The undersigned officers of the Company do hereby further certify,
pursuant to Sections 13.04 and 13.05 of the Indenture, as follows:
(i) We have read the covenants and conditions of the Indenture relating
to the issuance authentication and delivery of the Senior Notes and
in respect of compliance with which this certificate is furnished,
and the definitions in the Indenture relating thereto;
(ii) The statements contained in this certificate are based upon our
familiarity with the Indenture, the documents accompanying this
certificate and, as to factual matters, upon our discussions with
officers and employees of the Company familiar with the facts
relating to the matters set forth herein;
49
(iii) In our opinion, we have made such examination or investigation as is
necessary to enable us to express an informed opinion as to whether
or not such covenants and conditions have been complied with; and
(iv) In our opinion, such conditions and covenants, and all conditions
precedent, if any (including any covenants compliance with which
constitutes a condition precedent) relating to the authentication
and delivery by the Trustee of the Senior Notes requested to be
authenticated and delivered on the date hereof, have been complied
with.
50
IN WITNESS WHEREOF, the undersigned has executed this Officers'
Certificate as of the date first written above.
By: /s/ Michael W. Yackira
-------------------------------
Michael W. Yackira
Corporate Executive Vice
President and Chief Financial
Officer
By: /s/ William D. Rogers
-------------------------------
William D. Rogers
Corporate Treasurer
51
EXHIBIT A
NOTATION BY TRUSTEE TO THE FACE OF SENIOR NOTE
A Successful Remarketing (defined herein) has occurred and the terms of
this senior note shall be governed by the Second Officers' Certificate (defined
herein).
52
EXHIBIT B
FORM OF 7.93% SENIOR NOTE
[This Senior Note is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of the Depository Trust
Company, a New York corporation (the "Depository"), or a nominee thereof. This
Senior Note may not be exchanged in whole or in part for a security registered,
and no transfer of this senior note in whole or in part may be registered, in
the name of any person other than such depositary or a nominee thereof, except
in the limited circumstances described in the Indenture.]**
[Unless this certificate is presented by an authorized representative of
the Depositary, to Sierra Pacific Resources 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 requested by an authorized
representative of DTC and any payment is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]**
SIERRA PACIFIC RESOURCES
7.93% SENIOR NOTE
NO.: __________ CUSIP NO.: __________
$______________
SIERRA PACIFIC RESOURCES, a corporation duly organized and existing under
the laws of the State of Nevada (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to [Cede & Co.]**, or registered assigns
(the "Holder"), the principal sum of _________ Dollars ($_______) [, or such
other principal amount as shall be set forth in the Schedule of Increases or
Decreases attached hereto,]*** on November 15, 2007, or such later date as
determined in the Remarketing (but in no event later than the 11th anniversary
of the Purchase Contract Settlement Date), in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public or private debts and to pay interest thereon from May 15, 2005 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, quarterly in arrears on February 15, May 15, August 15 and
November 15 of each year, commencing on August 15, 2005, at the rate of 7.93%
per annum to, but excluding, either (1) the Remarketing Settlement Date, if
there has been a Successful Remarketing, or (2) the Purchase Contract Settlement
Date, if a Failed Remarketing has occurred or, if there is not a Remarketing at
all pursuant to clause (c) of the definition of "Reset Rate" in the Officers'
Certificate, and at
- -----------
** Insert in Global Securities.
*** Insert in Global Securities and Pledged Senior Notes.
the Reset Rate on such interest payment dates as determined in the Remarketing
thereafter, until the principal hereof is paid or made available for payment.
Payments of interest on the Senior Notes will include interest
accrued to, but excluding, the respective Interests Payment Dates. Interest
payments for the Senior Notes shall be computed and paid (1) for any full
quarterly period, on the basis of a 360-day year of twelve 30-day months, (2)
for any period shorter than a full quarterly period, on the basis of a 30-day
month and (3) for any period less than a month, on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
interest is payable on the Senior Notes is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or payment in respect of any such
delay), in each case with the same force and effect as if made on the date the
payment was originally due and payable; provided, however, if such Business Day
is in the next calendar year, then such payment will be made on the preceding
Business Day.
Any principal of or installment of interest on the Senior Notes that
is overdue shall bear interest at the interest rate then borne by the Senior
Notes (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand by the
Holders.
Interest shall be paid quarterly in arrears on each Interest Payment
Date until the Stated Maturity to the Person in whose name the Senior Notes are
registered on the Regular Record Date for such Interest Payment Date; provided
that, interest payable at the Stated Maturity of principal as provided herein
will be paid to the Person to whom principal is payable. Any such interest that
is not so punctually paid or duly provided for will forthwith cease to be
payable to the Holders on such Regular Record Date and may either be paid to the
Person or Persons in whose name the Senior Notes are registered at the close of
business on a special record date (as such term is used in Section 2.12 of the
Indenture) for the payment of such defaulted interest to be fixed by the
Company, notice whereof shall be given to Holders of the Senior Notes not less
than ten days prior to such special record date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange, if any, on which the Senior Notes may be listed, and upon such notice
as may be required by any such exchange, all as set forth in Section 2.12 of the
Indenture.
The principal amount of this Senior Note may be increased or decreased
and, in a Remarketing, the terms of this Senior Note may be modified, each as
specified in the Officers' Certificate pursuant to which this Senior Note is
issued. Upon a Successful Remarketing (as defined in the Officers' Certificate),
the Company shall instruct the Trustee to make a notation to the face of this
Senior Note indicating that the terms of this Senior Note have been modified
pursuant to and in accordance with the terms of the Second Officers' Certificate
(as defined in the Officers' Certificate).
Reference is hereby made to the further provisions of this Senior Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
2
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Senior Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: SIERRA PACIFIC RESOURCES
By: ____________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By: ____________________________
Authorized Signatory
4
[REVERSE OF SENIOR NOTE]
1. Indenture; Notes.
This Senior Note is one of a duly authorized series of Securities of
the Company (the "Senior Notes"), issued and to be issued in one or more series
under an Indenture, dated as of May 1, 2000 (the "Indenture"), between the
Company and The Bank of New York, as Trustee (the "Trustee", which term includes
any successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The terms, conditions and provisions of the
Securities are those stated in the Indenture, those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended, and those set forth
in this Senior Note. To the extent that the terms, conditions and other
provisions of this Senior Note modify, supplement or are consistent with those
of the Indenture, the terms, conditions and other provisions of the Indenture
shall govern.
The maximum aggregate principal amount of Senior Notes that may be
authenticated and delivered under the Indenture (except for Senior Notes
authenticated and delivered upon registration or transfer of or in exchange for,
or in lieu of other Senior Notes pursuant to Section 2.06, 2.07, 2.09 or 3.07 of
the Indenture) shall be $99,142,000. The Senior Notes are issuable only in
denominations of $1,000 and any integral multiple thereof.
All capitalized terms that are used but not defined in this Senior Note
shall have the meanings assigned to them in the Officers' Certificate.
2. Ranking.
The Senior Notes shall constitute the senior, unsecured and unsubordinated
debt obligations of the Company and shall rank equally in right of payment with
all other existing and future senior, unsecured and unsubordinated debt
obligations of the Company.
3. Form; Transfer, Registration and Exchange.
Initially, the Senior Notes that are components of certain securities of
the Company referred to as Corporate PIES (the "Corporate PIES") will be issued
in definitive form (the "Certificated Notes") registered in the name of The Bank
of New York, as Purchase Contract Agent (the "Purchase Contract Agent"), under
the Purchase Contract Agreement dated as of May 24, 2005 between the Company and
the Purchase Contract Agent (the "Purchase Contract Agreement"). Senior Notes
that are not components of Corporate PIES shall initially be issued in the form
of one or more global Senior Notes (each a "Global Senior Note") in the name of
Cede & Co. (as nominee for The Depository Trust Company (the "Depository"), the
initial securities depository for the Global Senior Notes. The Certificated
Notes and the Global Senior Notes may bear such legends as either the Purchase
Contract Agent or DTC, respectively, may reasonably request.
5
So long as any Senior Notes constitute components of Corporate PIES, they
shall be issued in the form of Certificated Notes. Senior Notes that no longer
constitute components of Corporate PIES shall be issued in the form of Global
Senior Notes. Each Global Senior Note or Certificated Note, as applicable, shall
represent such of the outstanding Senior Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Senior Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Senior Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Senior Note to reflect the amount
of any increase or decrease in the aggregate principal amount of outstanding
Senior Notes represented thereby shall be made by the Trustee, as custodian of
the Global Senior Notes, in accordance with instructions as further set forth
below. Any endorsement of a Certificated Note to reflect the amount of any
decrease in the aggregate principal amount of outstanding Certificated Notes
represented thereby shall be made by the Collateral Agent pursuant to and in
accordance with further instructions as set forth below.
No beneficial owner of the Senior Notes shall receive a Certificated Note
representing such beneficial owner's interest in such Global Senior Notes,
except as provided in Section 2.06 of the Indenture. Unless and until
Certificated Notes have been issued to the beneficial owners of the Senior Notes
pursuant to Section 2.06 of the Indenture, the rights of the beneficial owners
of the Senior Notes shall be exercised only through the Depositary and shall be
limited to those established by law and agreements between such beneficial
owners and the Depositary and/or the Depositary Participants. The Depositary
shall make book-entry transfers among its participants and receive and transmit
any payments on the Global Senior Notes to such participants; provided that,
solely for the purposes of determining whether the Holders of the requisite
amount of the Senior Notes have voted on any matter provided for in the
Indenture, so long as Certificated Notes have not been issued, the Company may
rely conclusively on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Company by the Depositary
setting forth the votes of the beneficial owners of the Senior Notes or
assigning the right to vote on any matter to any other Persons either in whole
or in part. The Senior Notes are subject to transfer, registration and exchange
as set forth in Section 2.06 of the Indenture, as supplemented by the Officers'
Certificate.
The Company shall execute, and the Trustee shall authenticate and deliver,
in each case, pursuant to Section 2.02 of the Indenture, one or more Global
Senior Notes that (i) shall represent and be denominated in an amount equal to
the aggregate principal amount of all of the Senior Notes to be issued in the
form of Global Senior Notes and not yet canceled, (ii) shall be registered in
the name of the Depositary for the Senior Notes or the nominee of such
Depositary and (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions.
Reference is hereby made to Section 2.06 of the Indenture for the
provisions relating to the transfer, registration and exchange of the Senior
Notes. Notwithstanding any other provisions of the Indenture (other than the
provisions set forth in Section 2.06 of the Indenture), Global Senior Notes may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of
6
such successor Depositary. Interests of beneficial owners may be transferred or
exchanged for Senior Notes not represented by a Global Senior Note, and Senior
Notes not represented by a Global Senior Note may be transferred or exchanged
for a Global Senior Notes or Senior Notes, in accordance with rules of the
Depositary and the provisions of Section 2.06 of the Indenture.
If any beneficial interest in a Global Senior Note is exchanged for or
transferred to a person who will take delivery thereof in the form of a
beneficial interest in another Global Senior Note or for Certificated Notes, the
principal amount of Senior Notes represented by such Global Senior Note shall be
reduced accordingly and an endorsement shall be made on such Global Senior Note
by the Collateral Agent or by 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 will take delivery thereof in the form of a
beneficial interest in another Global Senior Note, such other Global Senior Note
shall be increased accordingly and an endorsement shall be made on such Global
Senior Note by the Trustee or by the Depositary at the direction of the Trustee
to reflect such increase.
In the event that any Pledged Senior Notes are to be released from the
Pledge of the Pledge Agreement and delivered to the Purchase Contract Agent
pursuant to Section 5.2(b) of the Pledge Agreement (a "Released Note"), as a
result of the creation of one or more Treasury PIES as provided in Section 5.2
of the Pledge Agreement, such release and delivery shall be evidenced by an
endorsement by the Collateral Agent on the Certificated Note held by the
Collateral Agent reflecting a reduction in the principal amount of such
Certificated Note equal in amount (the "Reduced Principal Amount") to the
principal amount of the Released Note. The Collateral Agent shall confirm any
such Reduced Principal Amount by telecopying or otherwise delivering a photocopy
of such endorsement made on the Certificated Note evidencing such Reduced
Principal Amount to the Trustee at the telecopier number or address of the
Purchase Contract Agent provided for notices to the Purchase Contract Agent in
the Pledge Agreement (or at such other telecopier or address as the Trustee
shall provide to the Collateral Agent). Upon receipt of such confirmation, the
Trustee shall instruct the Collateral Agent to increase the principal amount of
a Global Note held by the Collateral Agent in an amount equal to the Reduced
Principal Amount by an endorsement made by the Collateral Agent on such Global
Note to reflect such increase.
In the event that a Senior Note is transferred to the Collateral Agent
pursuant to Section 5.3(a) of the Pledge Agreement (a "Subjected Note") in
connection with the recreation of Corporate PIES as provided in Section 5.3 of
the Pledge Agreement, such transfer shall be evidenced by an endorsement by the
Collateral Agent on the Certificated Note held by the Collateral Agent
reflecting an increase in the principal amount of such Certificated Note equal
in amount (the "Increased Principal Amount") to the principal amount of such
Subjected Note. The Collateral Agent shall confirm any such Increased Principal
Amount by telecopying or otherwise delivering a photocopy of such endorsement
made on the Certificated Note evidencing such Increased Principal Amount to the
Trustee at the telecopier number or address of the Purchase Contract Agent
provided for notices to the Purchase Contract Agent in the Pledge Agreement (or
at such other telecopier or address as the Trustee shall provide to the
Collateral Agent). Upon receipt of such confirmation, the Trustee shall instruct
the Collateral Agent to decrease the principal amount of the Senior Global Note
held by the Collateral Agent in an
7
amount equal to the Increased Principal Amount by an endorsement made by the
Collateral Agent on such Senior Global Note to reflect such decrease.
4. Pledge.
Upon initial issuance, the Senior Notes shall be pledged to the Collateral
Agent for the benefit of the Company, pursuant to the terms of the Pledge
Agreement, as collateral to secure the obligations of the Holders of Corporate
PIES to purchase the Common Stock in accordance with the terms of the Purchase
Contract Agreement. The Senior Notes may be transferred, in whole or in part,
only in accordance with the terms and conditions set forth in the Indenture, the
Pledge Agreement and the Purchase Contract Agreement. To the fullest extent
permitted by law, any transfer or purported transfer of any Senior Note not made
in accordance with the Indenture shall be null and void. Subject to this
Section, the Senior Notes shall be freely transferable.
5. Place and Method of Payment.
Payments of the principal of and interest on the Senior Notes shall be
made at the office of the Paying Agent, with any such payment that is due at the
Stated Maturity of any Senior Notes being made upon surrender of such Senior
Notes to the Paying Agent. Payments of interest (including interest on any
Interest Payment Date) will be made at the option of the Company, (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer at such place and to
such account at a banking institution in the United States as may be designated
in writing to the Trustee at least sixteen days prior to the date for payment by
the Person entitled thereto.
6. No Redemption or Sinking Fund.
Except as set forth in the Officers' Certificate, the Senior Notes shall
not be redeemable at the option of the Company, the Holders or otherwise; and
there shall be no sinking fund with respect to the Senior Notes.
7. Remarketing.
(i) Remarketing Rights. (A) The Remarketing Senior Notes shall be
remarketed in the Remarketing pursuant to the Remarketing Procedures. All
holders of PIES Senior Notes, including those who have attempted to effect a
Cash Settlement pursuant to Section 5.8 of the Purchase Contract Agreement,
Early Settlement pursuant to Section 5.9 of the Purchase Contract Agreement or
Merger Early Settlement pursuant to Section 5.10 of the Purchase Contract
Agreement but have failed to follow the procedures for such settlements shall be
deemed to have consented to the Remarketing of their Senior Notes pursuant to
the Remarketing Procedures in any Remarketing, or in the case of an unsuccessful
Cash Settlement, in the Final Remarketing Period. The right of each Holder of
Senior Notes to have its Senior Notes remarketed will be limited, however, to
the extent that (i) the Remarketing Agents conduct a Remarketing pursuant to the
terms of the Remarketing Agreement, (ii) the Remarketing Agents are able to find
a purchaser or purchasers for the tendered Senior Notes, (iii) such purchaser or
purchasers deliver the purchase price therefor to the Remarketing Agents and
(iv) the Remarketing may not commenced or be consummated pursuant to applicable
law. In addition, all holders of Senior
8
Notes shall be deemed to have consented to the Remarketing Procedures and the
terms of the Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement with respect to the pledge and transfer and other
provisions of these agreements with respect to their Senior Notes, pursuant to
the terms of such agreements. Notwithstanding anything to the contrary contained
in the Officers' Certificate, the Remarketing Agents have also entered into an
agreement with the Company pursuant to which, subject to certain conditions,
they have agreed to purchase the Senior Notes that have not been remarketed to
other investors in a Remarketing.
(B) Holders of Senior Notes comprising part of Corporate PIES may elect
not to participate in the Remarketing by creating Treasury PIES if it notifies
the Purchase Contract Agent of such election and delivers the specific U.S.
Treasury Security or U.S. Treasury Securities not later than 5:00 p.m. (New York
City time) on the Business Day immediately preceding the first of the three
sequential remarketing dates of any Three-Day Remarketing Period. A Holder that
has not so created Treasury PIES by delivering the Treasury Security or Treasury
Securities pursuant to this paragraph and Section 3.13 of the Purchase Contract
Agreement shall be deemed to have elected to participate in any Remarketing.
(C) Holders of Separated Senior Notes may elect to have such Separated
Senior Notes remarketed, if such holder delivers (a) to the Trustee and the
Collateral Agent a notice of that election, by use of a notice in substantially
the form of Exhibit B to the Officers' Certificate, specifying the aggregate
principal amount of Senior Notes to be remarketed, and (b) such Separated Senior
Notes, by book-entry transfer or other appropriate procedures, to the Collateral
Agent for Remarketing, in each case, by 5:00 p.m. (New York City time) on or
prior to the second Business Day, but no earlier than the fifth Business Day,
preceding the first of the three sequential remarketing dates of any Three-Day
Remarketing Period. Once the holder of such Separated Senior Notes delivers such
notice and Separated Senior Notes as specified in the preceding sentence, such
election may not be withdrawn and may not be conditioned upon (i) the level at
which the Reset Rate is established in the Remarketing or (ii) the extent to
which the other terms of the Senior Notes may be modified in the Remarketing,
including the interest payment dates, the maturity date (which may be extended
to a maximum term of 11 years from the Remarketing Settlement Date), the
redemption provisions, the minimum denomination and the addition of covenants
applicable to the Senior Notes; provided, however, that if such a holder
delivers only such a notice but not the Separated Senior Notes subject to the
notice, or vice versa, then none of such holder's Separated Senior Notes shall
be included in the Remarketing. On the Business Day immediately preceding the
first of the three sequential remarketing dates on any Three-Day Remarketing
Period, the Collateral Agent shall notify the Remarketing Agents of the
aggregate number of Separated Senior Notes to be remarketed. If there is a
Successful Remarketing, the Collateral Agent shall transfer such Separated
Senior Notes in accordance with the instructions provided by the Remarketing
Agents pursuant to the Remarketing Agreement. In the event that all remarketing
attempts during any Three-Day Remarketing Period are unsuccessful, the
Collateral Agent shall Transfer such Separated Senior Notes to the holders by
the end of the Business Day following any such unsuccessful remarketing attempt.
(D) The Company (a) during the Early Remarketing Period may, at its
option, and in its sole discretion, select one or more Three-Day Remarketing
Periods consisting of three successive remarketing dates on each of which it
shall cause the Remarketing Agents to
9
remarket, in whole (but not in part), unless the Senior Notes have previously
been successfully remarketed in accordance with provisions of the Remarketing
Agreement, (i) the Pledged Senior Notes of Holders who have not notified the
Purchase Contract Agent of their intention to settle their purchase contracts in
cash and (ii) any Separated Senior Notes of Holders who have elected in the
manner set forth in the Purchase Contract Agreement, the Pledge Agreement and
the Remarketing Agreement to have their Senior Notes so remarketed, for
settlement on the Remarketing Settlement Date and (b) shall, unless the Pledged
Senior Notes have previously been successfully remarketed, cause the Remarketing
Agents to remarket, in whole (but not in part), on each remarketing date during
the Final Remarketing Period (i) the Pledged Senior Notes the Holders of which
have failed to notify the Purchase Contract Agent, on or prior to the sixth
Business Day immediately preceding the Purchase Contact Settlement Date, of
their intention to settle such purchase contracts in cash, and (ii) any
Separated Senior Notes of Holders who have elected in the manner set forth
herein to have their Senior Notes so remarketed, for settlement on the Purchase
Contract Settlement Date. The Company may select a Three-Day Remarketing Period
during the Early Remarketing Period by designating each of the three sequential
remarketing dates to comprise such Three-Day Remarketing Period, provided that
no Remarketing Date shall occur earlier than the day following the consummation
of the Exchange Offer and later than the ninth Business Day prior to the
Purchase Contract Settlement Date.
(ii) Remarketing Notice Requirements and Procedures. (A) On the
fourth Business Day immediately preceding the first of the three sequential
remarketing dates of any Three-Day Remarketing Period (each such date, a
"Remarketing Announcement Date"), the Company shall give notice of the
Remarketing in an Authorized Newspaper, including the specific U.S. Treasury
Security or Treasury Securities (including the CUSIP number and/or the principal
terms of such Treasury Security or Treasury Securities) that must be delivered
by Holders of Corporate PIES that elect not to participate in the Remarketing
pursuant to Section 5.3(c) of the Purchase Contract Agreement, that the Senior
Notes may be remarketed on any and all of the fourth, fifth and sixth Business
Days following such Remarketing Announcement Date. Promptly after 11:00 a.m.
(New York City time) on the Business Day immediately preceding the first of the
three sequential remarketing dates of any Three-Day Remarketing Period, as
applicable, the Purchase Contract Agent shall notify the Remarketing Agents, the
Company, the Collateral Agent and the Trustee of the aggregate principal amount
of Pledged Senior Notes to be remarketed, and the Collateral Agent shall notify
the Remarketing Agents, the Trustee and the Company of the aggregate principal
amount of Separated Senior Notes and shall concurrently therewith, pursuant to
the Pledge Agreement, deliver for Remarketing to the Remarketing Agents all
Remarketing Senior Notes. In the event that all of the remarketing attempts
during any Three-Day Remarketing Period are unsuccessful, the Company will cause
a notice of the unsuccessful remarketing attempt to be published in an
Authorized Newspaper no later than the Second Business Day following the last
sequential remarketing date of such Three-Day Remarketing Period.
(B) The Company will request not later than seven nor more than fifteen
calendar days prior to each Remarketing Announcement Date, that the Depositary
(or any successor or its nominee) notify the Depository participants holding
Senior Notes of the Remarketing.
10
(C) The Remarketing Agents shall use their commercially reasonable efforts
to remarket the Remarketing Senior Notes pursuant to the procedures set forth in
Section 2 of Remarketing Agreement.
(D) In addition to the procedures set forth in the Remarketing Agreement,
if a Failed Remarketing occurs the Collateral Agent, under the Pledge Agreement
and for the benefit of the Company, may, on the written direction of the
Company, exercise its rights as a secured party with respect to such Pledged
Senior Notes, including those actions specified below; provided that, if upon a
Failed Remarketing, the Collateral Agent exercises such rights for the benefit
of the Company with respect to such Pledged Senior Notes, any accumulated and
unpaid interest on such Senior Notes will become payable by the Company to the
Purchase Contract Agent for payment to the Holders of the Corporate PIES to
which such Senior Notes relates. Such payment will be made by the Company on or
prior to 11:00 a.m. (New York City time), on the Purchase Contract Settlement
Date in lawful money of the United States by wire transfer in immediately
available funds payable to or upon the order of the Purchase Contract Agent.
With respect to any Pledged Senior Notes which are subject of a Failed
Remarketing, the Collateral Agent, for the benefit of the Company, reserves all
of its rights as a secured party with respect thereto and, subject to applicable
law, may, on the written direction of the Company, (i) retain such Senior Notes
in full satisfaction of the Holders' obligations under the related Purchase
Contracts or (ii) sell such Senior Notes in one or more public or private sales.
(E) If all of the holders of Corporate PIES elect not to participate in
the Remarketing and no holders of Senior Notes that are not a component of
Corporate PIES elect to participate in the Remarketing and deliver their Senior
Notes and a notice of such election to the Collateral Agent, pursuant to and in
accordance with the Pledge Agreement then, (i) the Remarketing Agents shall, in
its sole discretion, determine the rate that, in its judgment, would have been
established had a Remarketing been held on the Remarketing Date, and such rate
shall be the Reset Rate; and (ii) by approximately 4:30 p.m. (New York City
time), on the third Business Day preceding the Purchase Contract Settlement
Date, the Remarketing Agents shall advise by telephone (promptly confirmed in
writing), the Trustee and the Company of such Reset Rate, whereupon the Company
shall notify the Depositary in writing of such Reset Rate.
The Remarketing Agents' calculation of the Reset Rate shall be conclusive
and binding and the Trustee shall have no responsibility for the calculation
thereof.
(iii) Depositary's Procedures, Etc.
So long as the Corporate PIES, Treasury PIES or the Senior Notes are
evidenced by one or more Global Senior Notes deposited with the Depositary or
its nominee in writing of such Reset Rate, the Company shall request, not later
than 15 calendar days nor more than 30 Business Days prior to the Remarketing
Date, that the Depositary notify, directly or indirectly, each beneficial owner
of a Corporate PIES and of a Separated Senior Note of the impending Remarketing.
In accordance with the Depositary's normal procedures, on the Remarketing
Settlement Date or the Purchase Contract Settlement Date, as applicable, the
transactions described above
11
with respect to each Senior Note tendered for purchase and sold in the
Remarketing shall be executed through the Depositary, and the accounts of the
respective Depositary Participants shall be debited and credited and such Senior
Notes delivered by book entry as necessary to effect purchases and sales of such
Senior Notes. The Depositary shall make payment in accordance with its normal
procedure; provided that, the procedures set forth herein, including provisions
for payment by purchasers of the Senior Notes in the Remarketing, shall be
subject to modification to the extent required by the Depositary or if the
book-entry system is no longer available for the Senior Notes at the time of the
Remarketing, to facilitate the tendering and remarketing of the Senior Notes in
certificated form, and shall provide for the authentication and delivery of
Senior Notes in a principal amount equal to the unremarketed portion of such
Senior Notes. In addition, the Remarketing Agents may modify, the settlement
procedures set forth herein in order to facilitate the settlement process.
If any Holder of Senior Notes selling Senior Notes in the Remarketing
fails to deliver such Senior Notes, the direct or indirect Depositary
Participant of such selling Holder and of any other Person who was to have
purchased Senior Notes in the Remarketing may deliver to any such other Person
an aggregate principal amount of Senior Notes that is less than the aggregate
principal amount of Senior Notes that otherwise was to be purchased by such
Person. In such event, the aggregate principal amount of Senior Notes to be so
delivered shall be determined by such direct or indirect Depositary Participant,
and delivery of such lesser aggregate principal amount of Senior Notes shall
constitute good delivery.
(iv) Other Matters Regarding Remarketing.
(A) The Remarketing Agents may purchase Remarketing Senior Notes for their
own account. However, under no circumstances, shall the Remarketing Agents be
obligated to purchase any Senior Notes in connection with a Remarketing and
neither the Company nor the Remarketing Agents shall be obligated to provide or
liable for any payment upon tender of Senior Notes in a Remarketing.
(B) Under the Remarketing Agreement, the Company, in its capacity as
issuer of the Senior Notes, shall be liable for, and shall pay, any and all
costs and expenses incurred in connection with the Remarketing, other than the
Remarketing Fee.
(C) Notwithstanding the Pledge and, if applicable, the delivery of
Separated Senior Notes to the Collateral Agent for Remarketing, in each case, as
set forth herein, the Company's obligation to pay interest, including any
accrued and unpaid interest, on all outstanding Senior Notes (whether then
comprising a part of Corporate PIES or as Separated Senior Notes) pursuant to
the Indenture shall remain unconditional and absolute.
(D) In connection with the Remarketing, the Company may add provisions to,
change and modify provisions of and/or eliminate provisions of the Senior Notes
without the consent of the Holders, provided, however, that such additions,
changes, modifications or eliminations are permitted under the Remarketing
Agreement and provided further, that any such additions, changes or
modifications (other than the Reset Rate) shall be effective only in the event
of a Successful Remarketing. Upon the occurrence of a Successful Remarketing,
(i) this Officers' Certificate shall be replaced with an Amended and Restated
Officers' Certificate that reflects any
12
such additions, changes, modifications or eliminations to the Senior Notes (the
"Second Officers' Certificate") and (ii) the Company shall direct the Trustee
to, and the Trustee shall, make a notation on the face of the Global Senior Note
that indicates that a Successful Remarketing has occurred and that the terms of
the Senior Notes that have been remarketed shall be governed by the Second
Officers' Certificate and the Company shall direct the Trustee to, and the
Trustee shall, make a similar notation on the face of all Certificated Senior
Notes.
(E) The Holders will be deemed to have consented to the modified
provisions of the Senior Notes pursuant to and in accordance with the terms of
the Remarketing Agreement.
8. Default and Remedies.
If an Event of Default with respect to Senior Notes shall occur and be
continuing, the principal of the Senior Notes may be declared due and payable in
the manner and with the effect and consequent remedies to the Holders, in each
case, as provided in the Indenture.
No Holder of any Senior Note shall have any right by virtue or by availing
of any provision of the Indenture to institute any action or proceeding at law
or in equity or in bankruptcy or otherwise upon or under or with respect to the
Indenture, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of a Continuing Event
of Default and unless the Holders of not less than 25% in aggregate principal
amount of the Senior Notes then Outstanding shall have made written request upon
the Trustee to institute such action or proceedings in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action or
proceeding and the Holders of a majority in principal amount of then Outstanding
Senior Notes shall have not given the Trustee a direction inconsistent with such
request, it being understood and intended, and being expressly covenanted by the
Holders of every Senior Note with every other Holder and the Trustee, that no
one or more Holders of Senior shall have any right in any manner whatever by
virtue or by availing of any provision of the Indenture to affect, disturb or
prejudice the rights of any other such Holder of Senior Notes, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under the Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of Senior Notes. For
the protection and enforcement of the provisions of the Indenture, each and
every Holder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
9. Tax Treatment.
The Company agrees, and by purchasing a beneficial ownership interest in
the Senior Notes each Holder of Senior Notes will be deemed to have agreed, for
United States federal income tax purposes (a) to treat the Senior Notes and the
purchase contracts as separate assets, (b) to treat the exchange of the purchase
contracts pursuant to the Exchange Offer as not being a realization event, (c)
to treat the old notes as exchanged in the Exchange Offer for the Senior Notes
and cash in a "recapitalization," (d) assuming that the Senior Notes will be
listed for
13
trading on the New York Stock Exchange within 30 days after the consummation of
the Exchange Offer, to treat the Senior Notes as publicly traded within the
meaning of the applicable United States Treasury Regulations, (e) to treat the
acquisition of a Corporate PIES as the acquisition of a unit consisting of a
stock purchase contract and a senior note issued by the Company and to treat the
Senior Notes as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the
"Contingent Payment Regulations") and (f) to be bound by the Company's
determination of the "comparable yield" and "projected payment schedule," within
the meaning of the Contingent Payment Regulations, with respect to the Senior
Notes.
10. Amendment; Supplements; and Waivers.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders at any time by the Company and the Trustee
with the consent of the Holders of a majority in principal amount of the Senior
Notes then Outstanding. The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the Senior Notes
Outstanding, on behalf of the Holders of all Senior Notes, to waive certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Senior Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Senior Note and of any Senior 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
Senior Note.
11. Obligation Absolute and Unconditional.
No reference herein to the Indenture and no provision of this Senior Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Senior Note at the times, place and rate, and in the coin or
currency, herein prescribed.
12. Severability.
If any provision in this Senior Note is unenforceable in any jurisdiction,
then to the fullest extent permitted bylaw, (i) the other provisions of this
Senior Note shall remain in full force and effect in such jurisdiction and shall
be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision of this Senior Note in any jurisdiction shall not in any way
affect the validity or enforceability of such provision any other jurisdiction.
13. Governing Law.
THIS SENIOR NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
14. Jurisdiction; Venue.
14
The Company submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal proceedings arising
out of or relating to this Senior Note or the transactions contemplated hereby.
The parties hereto irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
15. Copies of the Indenture.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Sierra Pacific Resources
6100 Neil Road
Reno, Nevada 89520-3150
Attention: Manager of Treasury and Finance
15
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with rights of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - __________________ Custodian for __________
(Custodian) (Minor)
Under Uniform Gifts to Minors Act of
______________________________________
(State)
Additional abbreviations may also be used though not on the above list.
__________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
________________________________________________________________________________
(insert name of assignee)
________________________________________________________________________________
(insert social security, taxpayer I.D. or other identifying number of assignee)
________________________________________________________________________________
(insert address of assignee)
the within Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing_____________________________________________________
agent to transfer said Senior Note on the books of Sierra Pacific Resources,
with full power of substitution in the premises.
Dated: ___________ __, _____ _______________________________
Signature
_______________________________
NOTICE: The signature to this
assignment must correspond
with the name as it appears
upon the face of the within
Corporate PIES Certificates in
every particular, without
alteration or enlargement or
any change whatsoever.
Signature Guarantee:________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES
The following increases or decreases in this Global Senior Note have been made:
Principal amount of
Amount of decrease in Amount of increase in Senior Notes evidenced
principal amount of principal amount of by the Global Senior Signature of authorized
Senior Notes evidenced Senior Notes evidenced by Note following such officer of Trustee or
Date by the Global Senior Note the Global Senior Note decrease or increase Collateral Agent
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