-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MWZDcXGI+80XgwCwxEKwGdIDQhbwQrEDKJxwiMW3fMRoLf8dwd40deEYgDkz4TKe 2sqmUcPTTY1v5d/vhZ5x2A== 0000912057-97-008759.txt : 19970314 0000912057-97-008759.hdr.sgml : 19970314 ACCESSION NUMBER: 0000912057-97-008759 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19970313 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEVADA POWER CO CENTRAL INDEX KEY: 0000071180 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 880045330 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-21091 FILM NUMBER: 97556270 BUSINESS ADDRESS: STREET 1: 6226 W SAHARA AVE CITY: LAS VEGAS STATE: NV ZIP: 89102 BUSINESS PHONE: 7023675000 MAIL ADDRESS: STREET 1: P O BOX 230 CITY: LAS VEGAS STATE: NV ZIP: 89151 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHERN NEVADA POWER CO DATE OF NAME CHANGE: 19701113 S-3/A 1 S-3/A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 1997 REGISTRATION NO. 333-21091 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- NEVADA POWER COMPANY (Exact Name of Registrant as Specified in its Charter) NEVADA 88-0045330 (State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification Number) Organization)
NVP CAPITAL I AND NVP CAPITAL II (Exact Name of Registrant as Specified in its Charter) DELAWARE TO BE APPLIED FOR (State or Other Jurisdiction of Incorporation (I.R.S. Employer Identification Number) or Organization)
6226 WEST SAHARA AVENUE, LAS VEGAS, NEVADA 89102, TELEPHONE (702) 367-5000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants' Principal Executive Offices) CHARLES A. LENZIE, CHAIRMAN OF THE BOARD, NEVADA POWER COMPANY P. O. BOX 230, LAS VEGAS, NEVADA 89151, TELEPHONE (702) 367-5000 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) ------------------------ COPIES TO: Glen E. Stephens, Esq. Robert A. Yolles, Esq. Best Best & Krieger LLP Jones, Day, Reavis & Pogue P. O. Box 1028 77 West Wacker Drive Riverside, California 92502 Chicago, Illinois 60601
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: WHEN MARKET CONDITIONS WARRANT AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE. ------------------------ If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, check the following box. / / If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ____________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ____________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. /X/ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SUBJECT TO COMPLETION, DATED MARCH 13, 1997 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 13, 1997 5,000,000 PREFERRED SECURITIES NVP CAPITAL I % CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES, SERIES A (QUIPS-SM-)* (LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY) GUARANTEED, AS SET FORTH HEREIN, BY NEVADA POWER COMPANY The % Cumulative Quarterly Income Preferred Securities, Series A (the "Series A QUIPS"), offered hereby represent undivided beneficial interests in the assets of NVP Capital I, a trust formed under the laws of the State of Delaware (the "Series A Issuer"). Nevada Power Company, a Nevada corporation ("Nevada Power"), will be the owner of all of the beneficial interests represented by common securities of the Series A Issuer ("Series A Common Securities"). IBJ Schroder Bank & Trust Company ("IBJ Schroder") is the Property Trustee of the Series A Issuer. The Series A Issuer exists for the sole purpose of issuing the Series A QUIPS and the Series A Common Securities and investing the proceeds thereof in % Junior Subordinated Deferrable Interest Debentures, Series A (the "Series A QUIDS"-SM-)*, to be issued by Nevada Power. The Series A QUIDS will mature on , 2037, which date may be extended to a date not later than , 2046 if certain conditions are met, and are redeemable prior to maturity at Nevada Power's option as hereinafter described. The Series A QUIPS will have a preference under certain circumstances with respect to cash distributions and amounts payable on liquidation, redemption or otherwise over the Series A Common Securities. See "Description of QUIPS-- Subordination of Common Securities" in the accompanying Prospectus. (CONTINUED ON NEXT PAGE) -------------- SEE "RISK FACTORS" BEGINNING ON PAGE S-4 HEREOF FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE SERIES A QUIPS. -------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROCEEDS TO THE INITIAL PUBLIC UNDERWRITING SERIES A OFFERING PRICE COMMISSION(1) ISSUER(2)(3) -------------- ------------------- ---------------- Per Series A QUIPS............................................... $ (2) $ Total............................................................ $ (2) $
- -------------- (1) The Series A Issuer and Nevada Power have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. See "Underwriting". (2) In view of the fact that the proceeds of the sale of the Series A QUIPS will be used to purchase the Series A QUIDS, the Underwriting Agreement provides that Nevada Power will pay to the Underwriters, as compensation ("Underwriters' Compensation") for their arranging the investment therein of such proceeds, $ per Series A QUIPS (or $ in the aggregate). See "Underwriting". (3) Expenses of the offering, which are payable by Nevada Power, are estimated to be $ . ---------------- The Series A QUIPS offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that the Series A QUIPS will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company in New York, New York, on or about , 1997, against payment therefor in immediately available funds. - ---------------- * QUIPS and QUIDS are servicemarks of Goldman, Sachs & Co. GOLDMAN, SACHS & CO. DEAN WITTER REYNOLDS INC. LEGG MASON WOOD WALKER MERRILL LYNCH & CO. PAINEWEBBER INCORPORATED INCORPORATED ------------------ The date of this Prospectus Supplement is , 1997. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A QUIPS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. -------------- (CONTINUED FROM PREVIOUS PAGE) Holders of the Series A QUIPS will be entitled to receive preferential cumulative cash distributions accruing from the date of original issuance and payable quarterly in arrears on the last day of March, June, September and December of each year, commencing , 1997, at the annual rate of % of the liquidation preference of $25 per Series A QUIPS ("Distributions"). So long as no Debenture Event of Default has occurred and is continuing, Nevada Power has the right to defer payment of interest on the Series A QUIDS at any time or from time to time for a period not exceeding 20 consecutive quarters (each, an "Extension Period"), provided that no Extension Period may extend beyond the Maturity Date (as defined herein) of the Series A QUIDS. Upon the termination of any such Extension Period and the payment of all amounts then due on any Interest Payment Date (as defined herein), Nevada Power may elect to begin a new Extension Period subject to the requirements set forth herein. At the end of each Extension Period, Nevada Power shall pay all interest then accrued and unpaid together with interest on all such accrued and unpaid amounts calculated at the applicable rate. During an Extension Period, Nevada Power may prepay any deferred interest prior to the end of an Extension Period in whole or in part on any Interest Payment Date. If interest payments on the Series A QUIDS are so deferred, Distributions on the Series A QUIPS will also be deferred and Nevada Power will not be permitted and no subsidiary of Nevada Power will be permitted, subject to certain exceptions set forth herein, to (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of Nevada Power's capital stock or (ii) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks PARI PASSU with or junior in right of payment to the Series A QUIDS, or make any guarantee payments with respect to any indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to the Series A QUIDS. During an Extension Period, interest on the Series A QUIDS will continue to accrue (and the amount of Distributions to which holders of the Series A QUIPS are entitled will accumulate at the rate of % per annum, compounded quarterly) and holders of Series A QUIPS will be required to accrue interest income in the form original issue discount ("OID") for United States federal income tax purposes as described herein. See "Certain Terms of Series A QUIDS--Option to Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--Potential Extension of Interest Payment Period and Original Issue Discount" and "--Payments of Interest". The Series A Guarantee of Nevada Power guarantees the payment of Distributions and payments on liquidation or redemption of the Series A QUIPS, but only in each case to the extent of funds held by the Series A Issuer, as described herein (the "Series A Guarantee"). See "Description of Guarantees" in the accompanying Prospectus. If Nevada Power does not make interest payments on the Series A QUIDS held by the Series A Issuer, the Series A Issuer will have insufficient funds to pay Distributions on the Series A QUIPS. The Series A Guarantee does not cover payment of Distributions when the Series A Issuer does not have sufficient funds to pay such Distributions. In such event, a holder of Series A QUIPS may institute a legal proceeding directly against Nevada Power to enforce payment of such Distributions to such holder. The Series A Guarantee, when taken together with the obligations of Nevada Power under the Series A QUIDS, the Indenture under which the Series A QUIDS are being issued, the Trust Agreement creating the Series A Issuer and the Expense Agreement described herein, provide a full, irrevocable and unconditional guarantee on a subordinated basis of amounts due on the Series A QUIPS. See "Risk Factors--Rights Under the Series A Guarantee; Limited Funds Available to Series A Issuer"; see also "Relationship Among the QUIPS, the Corresponding QUIDS and the Guarantees" in the accompanying Prospectus. The obligations of Nevada Power under the Series A Guarantee and the Series A QUIDS are S-2 subordinate and junior in right of payment to all Senior Debt (as defined in "Description of QUIDS-- Subordination" in the accompanying Prospectus) of Nevada Power. As of December 31, 1996, Nevada Power had approximately $900 million aggregate principal amount of Senior Debt outstanding. At that date, the amount of obligations of Nevada Power on a parity with the Series A QUIDS and the Series A Guarantee aggregated approximately $480 million, consisting primarily of accounts payable, accrued liabilities, including taxes, interest and deposits, and deferred credits and other liabilities all arising in the ordinary course of business. Such amount excludes commitments or contingencies in respect of existing or future obligations for (by way of example) construction expenditures, fuel and purchased power obligations and operating lease obligations. Neither the terms of the Series A QUIDS nor the Series A Guarantee place any limitation on the amount of Senior Debt, parity obligations or other indebtedness that may be incurred by Nevada Power. See "Description of QUIDS-- Subordination" in the accompanying Prospectus. The Series A QUIPS are subject to mandatory redemption, in whole or in part, upon repayment of the Series A QUIDS at maturity or their earlier redemption in an amount equal to the amount of related Series A QUIDS maturing or being redeemed at a redemption price ("Redemption Price") equal to the aggregate liquidation preference of such Series A QUIPS plus accumulated and unpaid Distributions thereon to the date of redemption. See "Description of QUIPS--Redemption Procedures". The Series A QUIDS are redeemable prior to maturity at the option of Nevada Power (i) on or after , 2002, in whole at any time or in part from time to time or (ii) at any time, in whole (but not in part) upon the occurrence and continuation of a Special Event (as defined herein), in each case subject to the further conditions described under "Description of QUIDS--Redemption" and "Description of Corresponding QUIDS--Optional Redemption" in the accompanying Prospectus. The redemption price in either such event will equal 100% of the principal amount of Series A QUIDS to be redeemed plus accrued and unpaid interest thereon to the date of redemption. At any time, Nevada Power will have the right to terminate the Series A Issuer and cause the Series A QUIDS to be distributed to the holders of the Series A QUIPS in liquidation of the Series A Issuer. If Nevada Power elects to liquidate the Series A Issuer and thereby causes the Series A QUIDS to be distributed to holders of the Series A QUIPS in liquidation of the Series A Issuer, Nevada Power may shorten or extend the maturity of such Series A QUIDS, except that it can only extend the maturity if certain conditions are met. See "Certain Terms of Series A QUIPS--Special Event Redemption or Distribution of Series A QUIDS". In the event of the liquidation of the Series A Issuer, after satisfaction of the creditors of the Series A Issuer as provided by applicable law, the holders of the Series A QUIPS will be entitled to receive a liquidation preference of $25 per Series A QUIPS plus accumulated and unpaid Distributions thereon to the date of payment, which may be in the form of a distribution of such amount in Series A QUIDS, subject to certain exceptions. See "Description of QUIPS--Liquidation Distribution Upon Termination" in the accompanying Prospectus. Application has been made to list the Series A QUIPS on the New York Stock Exchange (the "NYSE") under the symbol 'NVPPr'. Trading of the Series A QUIPS on the NYSE is expected to commence within 30 days after the initial delivery of the Series A QUIPS. If the Series A QUIDS are distributed to the holders of Series A QUIPS upon the liquidation of the Series A Issuer, Nevada Power will use its best efforts to list the Series A QUIDS on the NYSE or such other stock exchanges, if any, on which the Series A QUIPS are then listed. The Series A QUIPS will be represented by global certificates registered in the name of The Depository Trust Company ("DTC") or its nominee. Beneficial interests in the Series A QUIPS will be shown on, and transfers thereof will be effected only through, records maintained by participants in DTC. Except as described in the accompanying Prospectus, Series A QUIPS in certificated form will not be issued in exchange for the global certificates. See "Description of QUIPS--Book-Entry Issuance" in the accompanying Prospectus. S-3 THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION WITH THE INFORMATION CONTAINED IN THE ACCOMPANYING PROSPECTUS. AS USED HEREIN, (I) THE "INDENTURE" MEANS THE JUNIOR SUBORDINATED INDENTURE, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, INCLUDING THE FIRST SUPPLEMENTAL INDENTURE RELATING TO THE SERIES A QUIDS, BETWEEN NEVADA POWER AND IBJ SCHRODER AS TRUSTEE (THE "DEBENTURE TRUSTEE"), AND (II) THE "TRUST AGREEMENT" MEANS THE AMENDED AND RESTATED TRUST AGREEMENT AMONG NEVADA POWER, AS DEPOSITOR, IBJ SCHRODER, AS PROPERTY TRUSTEE (THE "PROPERTY TRUSTEE") AND DELAWARE TRUST CAPITAL MANAGEMENT, INC., AS DELAWARE TRUSTEE (THE "DELAWARE TRUSTEE"), THE ADMINISTRATIVE TRUSTEES NAMED THEREIN (COLLECTIVELY, WITH THE PROPERTY TRUSTEE AND DELAWARE TRUSTEE, THE "ISSUER TRUSTEES") AND THE HOLDERS AS DEFINED THEREIN. EACH OF THE OTHER CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT AND NOT OTHERWISE DEFINED IN THIS PROSPECTUS SUPPLEMENT HAS THE MEANING SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR IN THE ACCOMPANYING PROSPECTUS. RISK FACTORS Prospective purchasers of the Series A QUIPS should carefully review the information contained elsewhere in this Prospectus Supplement and in the accompanying Prospectus and should particularly consider the following matters. DEPENDENCE OF SERIES A ISSUER ON NEVADA POWER FOR FUNDS; SUBORDINATION OF THE SERIES A GUARANTEE AND THE SERIES A QUIDS The ability of the Series A Issuer to pay amounts due on the Series A QUIPS is solely dependent upon Nevada Power making payments on the Series A QUIDS as and when required. The obligations of Nevada Power under the Series A Guarantee and the Series A QUIDS issued by Nevada Power for the benefit of the holders of Series A QUIPS are unsecured and rank subordinate and junior in right of payment to all Senior Debt of Nevada Power. As of December 31, 1996, Nevada Power had approximately $900 million aggregate principal amount of Senior Debt outstanding. At that date, the amount of obligations of Nevada Power on a parity with the Series A QUIDS and the Series A Guarantee aggregated approximately $480 million, consisting primarily of accounts payable, accrued liabilities, including taxes, interest and deposits, and deferred credits and other liabilities, all arising in the ordinary course of business. Such amount excludes commitments or contingencies in respect of existing or future obligations for (by way of example) construction expenditures, fuel and purchased power obligations and operating lease obligations. Neither the Indenture, the Series A Guarantee nor the Trust Agreement places any limitation on the amount of secured or unsecured debt, including Senior Debt, that may be incurred by Nevada Power, whether under the Indenture or any existing or other indenture that Nevada Power may enter into in the future or otherwise, including, without limitation, Nevada Power's Indenture of Mortgage and Deed of Trust dated October 1, 1953 entered into with Banker's Trust Company, together with supplemental indentures thereto heretofore or hereafter entered into (the "Mortgage Indenture"). Furthermore, there are no provisions in the Indenture, the Series A Guarantee or the Trust Agreement, or any other existing agreement, that afford holders of Series A QUIPS or Series A QUIDS protection in the event of a highly leveraged or similar transaction involving Nevada Power, whether or not involving a change in control of Nevada Power. At December 31, 1996, the aggregate principal amount of indebtedness outstanding under the Mortgage Indenture was $443 million, all of which is secured by a first mortgage lien and security interest in substantially all of the tangible property of Nevada Power. The Series A QUIDS and the Series A Guarantee also will be effectively subordinated to all obligations of Nevada Power's subsidiaries. See "Description of Guarantees--Status of the Guarantees" and "Description of QUIDS--Subordination" in the accompanying Prospectus. OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; POTENTIAL MARKET VOLATILITY DURING EXTENSION PERIOD So long as no Event of Default under the Indenture has occurred and is continuing, Nevada Power has the right under the Indenture to defer the payment of interest on the Series A QUIDS at any time or from S-4 time to time for a period not exceeding 20 consecutive quarters with respect to each Extension Period, provided that no Extension Period may extend beyond the Maturity Date of the Series A QUIDS. At the end of each Extension Period, Nevada Power shall pay all interest then accrued and unpaid together with interest on all such accrued and unpaid amounts calculated at the applicable rate. During an Extension Period, Nevada Power may prepay any deferred interest prior to the end of an Extension Period in whole or in part on any Interest Payment Date. Upon the termination of any Extension Period and the payment of all payments then due on any Interest Payment Date, Nevada Power may elect to begin a new Extension Period subject to the above requirements. If interest payments on the Series A QUIDS are so deferred, Distributions on the Series A QUIPS will also be deferred and Nevada Power will not be permitted, and no subsidiary of Nevada Power will be permitted, to (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of Nevada Power's capital stock or (ii) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks PARI PASSU with or junior in right of payment to the Series A QUIDS, or make any guarantee payments with respect to any indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to the Series A QUIDS (other than (a) dividends or distributions in Common Stock of Nevada Power, (b) redemptions or purchases of any rights pursuant to Nevada Power's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under Nevada Power's Stock Purchase and Dividend Reinvestment Plan and any of Nevada Power's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by Nevada Power or any of its subsidiaries). During an Extension Period, interest on the Series A QUIDS will continue to accrue (and the amount of Distributions to which holders of the Series A QUIPS are entitled will accumulate at the rate of % per annum, compounded quarterly) and holders of Series A QUIDS will be required to accrued interest income in the form of OID for the United States federal income tax purposes in advance of receipt of cash related to such income. See "Certain Terms of Series A QUIDS--Option to Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--Potential Extension of Interest Payment Period and Original Issue Discount". Should an Extension Period occur, a holder of Series A QUIPS will accrue income (in the form of OID) in respect of its pro rata share of the Series A QUIDS held by the Series A Issuer for United States federal income tax purposes. As a result, a holder of Series A QUIPS will include such income in gross income for United States federal income tax purposes in advance of the receipt of cash, and will not receive the cash related to such income from the Series A Issuer if the holder disposes of the Series A QUIPS prior to the record date for the payment of Distributions. See "Certain Federal Income Tax Consequences--Payments of Interest", "--Potential Extension of Interest Payment Period and Original Issue Discount" and "--Sale or Redemption of Series A QUIPS". Nevada Power has no current intention of exercising its right to defer payments of interest by extending the interest payment period on the Series A QUIDS. However, should Nevada Power elect to exercise such right in the future, the market price of the Series A QUIPS is likely to be adversely affected. A holder that disposes of its Series A QUIPS during an Extension Period, therefore, might not receive the same return on its investment as a holder that continues to hold its Series A QUIPS. In addition, as a result of the existence of Nevada Power's right to defer interest payments, the market price of the Series A QUIPS (which represent preferred undivided beneficial interests in the Series A QUIDS) may be more volatile than the market prices of other securities on which OID accrues that are not subject to such deferrals. S-5 RIGHTS UNDER THE SERIES A GUARANTEE; LIMITED FUNDS AVAILABLE TO SERIES A ISSUER The Series A Guarantee guarantees to the holders of the Series A QUIPS the following payments to the extent not paid by the Series A Issuer, (i) any accumulated and unpaid Distributions required to be paid on the Series A QUIPS, if and to the extent that the Property Trustee has available at such time in the payment account funds sufficient to make such payment, (ii) the Redemption Price with respect to any Series A QUIPS called for redemption, but only to the extent that the Property Trustee has available when due, in the payment account, funds sufficient to make such payment, and (iii) upon a voluntary or involuntary dissolution, winding-up or liquidation of the Series A Issuer (unless the Series A QUIDS are distributed to holders of the Series A QUIPS), the lesser of (a) the aggregate of the liquidation preference and all accrued and unpaid Distributions to the date of payment but only to the extent that the Property Trustee has available when due, in the payment account, funds sufficient to make such payment (b) the amount of assets of the Series A Issuer remaining available for distribution to holders of the Series A QUIPS in liquidation of the Series A Issuer. If Nevada Power were to default on its obligation to pay amounts payable under the Series A QUIDS, the Series A Issuer would lack funds for the payment of Distributions or amounts payable on redemption of the Series A QUIPS or otherwise, and, in such event, holders of the Series A QUIPS would not be able to rely upon the Series A Guarantee for payment of such amounts. In addition, the Series A Guarantee will constitute an unsecured obligation of Nevada Power and will rank subordinate and junior in right of payment to all Senior Debt of Nevada Power. SPECIAL EVENT REDEMPTION Upon the occurrence and continuation of a Special Event (as defined under "Description of QUIDS--Redemption"), Nevada Power has the right to redeem the Series A QUIDS in whole (but not in part) within 90 days following the occurrence of such Special Event and thereby cause a mandatory redemption of the Series A QUIPS at the Redemption Price. On February 6, 1997, President Clinton released his fiscal year 1998 budget proposal, which contains a number of proposed tax law changes (the "Proposed Legislation"). The Proposed Legislation would, among other things, generally deny interest deductions for interest on an instrument issued by a corporation that has a maximum weighted average maturity of more than 40 years. The Proposed Legislation would also generally deny interest deductions for interest on an instrument issued by a corporation that has a maximum term of more than 15 years and that is not shown as indebtedness on the separate balance sheet of the issuer or, in the case of an instrument with a maximum term of more than 15 years issued to a related party (other than a corporation), if the holder or some other related party issues a related instrument that is not shown as indebtedness on the issuer's consolidated balance sheet. For purposes of determining the weighted average maturity or the term of an instrument, any right to extend would be treated as exercised. The above-described provisions of the Proposed Legislation, if enacted into law, are proposed to be effective generally for instruments issued on or after the date of first committee action in Congress. Nevada Power has been advised that the date of first committee action is intended to be the effective date designated by the tax-writing committees of Congress if the proposals are included in a bill that is adopted by Congress. Although there can be no assurance, Nevada Power believes that any such effective date would not be prior to the date on which the Series A QUIPS are issued. Based on the proposed effective date, if the Proposed Legislation were to be enacted in the form proposed, the above-described provisions should not apply to the Series A QUIDS. If either provision were to apply to the Series A QUIDS, Nevada Power would be unable to deduct interest on the Series A QUIDS. Nevada Power believes that, under current law, it will be able to deduct interest on the Series A QUIDS. Although the above-described provisions of the Proposed Legislation in the form proposed should not apply to the Series A QUIDS, given the proposed effective date, there can be no assurance that future legislation will not be introduced and enacted which would adversely affect the ability of Nevada Power to deduct interest on the Series A QUIDS or otherwise affect the tax treatment of the transaction described herein. A change in the deductibility of interest and certain other changes could give rise to a Tax S-6 Event, which may permit Nevada Power to cause a redemption of the Series A QUIPS, as described more fully in the accompanying Prospectus under "Description of QUIPS--Redemption--Special Event Redemption or Distribution of Corresponding QUIDS". See "Certain Federal Income Tax Consequences." DISTRIBUTION OF SERIES A QUIDS UPON TERMINATION; POTENTIAL ADVERSE EFFECT UPON MARKET PRICE Nevada Power has the right to terminate the Series A Issuer at any time and, after satisfaction of liabilities to creditors of the Series A Issuer, cause the Series A QUIDS to be distributed to the holders of Series A QUIPS in liquidation of the Series A Issuer. There can be no assurance as to the market prices for Series A QUIDS that may be distributed in exchange for Series A QUIPS if a liquidation of the Series A Issuer occurs. See "Certain Terms of Series A QUIPS--Special Event Redemption or Distribution of Series A QUIDS". If the Series A QUIDS are so distributed, Nevada Power will use its best efforts to have the Series A QUIDS listed on the NYSE or on such other exchange as the Series A QUIDS are then listed or traded. Series A QUIDS that a holder of Series A QUIPS may receive on termination and liquidation of the Series A Issuer may trade at a discount to the price that the investor paid to purchase the Series A QUIPS offered hereby. Because holders of Series A QUIPS may receive Series A QUIDS on termination of the Series A Issuer, prospective purchasers of Series A QUIPS are also making an investment decision with regard to the Series A QUIDS and should carefully review all the information regarding the Series A QUIDS contained herein. See "Certain Federal Income Tax Consequences" herein and "Description of QUIPS--Redemption--Special Event Redemption or Distribution of Corresponding QUIDS" and "Description of Corresponding QUIDS--General" in the accompanying Prospectus. Under current United States federal income tax law and interpretations, a distribution of the Series A QUIDS upon liquidation of the Series A Issuer should not be a taxable event to holders of the Series A QUIPS. Should there be a change in law, a change in legal interpretation, a Tax Event or other circumstances, however, the distribution could be a taxable event to the holders of the Series A QUIPS. See "Certain Federal Income Tax Consequences--Distribution of Series A QUIDS to Holders of Series A QUIPS". LIMITED VOTING RIGHTS Holders of Series A QUIPS will generally have limited voting rights relating only to the modification of the Series A QUIPS and the dissolution, winding-up or liquidation of the Series A Issuer. Holders of Series A QUIPS will not be entitled to vote to appoint, remove or replace the Property Trustee or the Delaware Trustee, which voting rights are vested exclusively in the holder of the Series A Common Securities except upon the occurrence of certain events described herein. The Issuer Trustees and Nevada Power may amend the Trust Agreement without the consent of holders of Series A QUIPS to ensure that the Series A Issuer will be classified for United States federal income tax purposes as a grantor trust even if such action adversely affects the interests of such holders. See "Description of QUIPS--Voting Rights; Amendment of Each Trust Agreement" and "--Removal of Issuer Trustees" in the accompanying Prospectus. NO ESTABLISHED TRADING MARKET FOR THE SERIES A QUIPS; TRADING PRICE; POTENTIAL ADVERSE INCOME TAX EFFECT Application has been made to list the Series A QUIPS on the NYSE. If approved for listing, should an Extension Period occur, the Series A QUIPS may trade at prices that do not fully reflect the value of accrued but unpaid interest with respect to the underlying Series A QUIDS. A holder of Series A QUIPS that disposes of its Series A QUIPS between record dates for payments of Distributions will nevertheless be required to include in income as ordinary OID income an amount equal to the accrued but unpaid S-7 interest on the Series A QUIDS through the date of disposition and to add such amount to its adjusted tax basis in such holder's pro rata share of the underlying Series A QUIDS deemed disposed of. Such holder will recognize a capital loss to the extent the selling price (which may not fully reflect the value of accrued but unpaid interest) is less than its adjusted tax basis (which will include the full amount of any accrued but unpaid interest). Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes. See "Certain Federal Income Tax Consequences-- Sale or Redemption of Series A QUIPS". NVP CAPITAL I NVP Capital I is a statutory business trust formed under Delaware law pursuant to (i) the Trust Agreement executed by Nevada Power, as Depositor, IBJ Schroder, as Property Trustee, and Delaware Trust Capital Management, Inc., as Delaware Trustee, and the Administrative Trustees named therein, and (ii) the filing of a certificate of trust with the Secretary of State of the State of Delaware on January 31, 1997. The Trust Agreement will be qualified under the Trust Indenture Act of 1939, as amended ("Trust Indenture Act"). The Series A Issuer's business and affairs are conducted by the Issuer Trustees: IBJ Schroder, as Property Trustee, and Delaware Trust Capital Management, Inc., as Delaware Trustee, and two individual Administrative Trustees who are employees or officers of or affiliated with Nevada Power. The Series A Issuer exists for the exclusive purposes of (i) issuing and selling the Series A QUIPS and Series A Common Securities, (ii) using the proceeds from the sale of Series A QUIPS and Series A Common Securities to acquire Series A QUIDS issued by Nevada Power, (iii) receiving payments to be made with respect to the Series A QUIDS and disbursing such payments in accordance with the terms of the Trust Agreement and (iv) engaging in only those other activities necessary, convenient or incidental thereto. Accordingly, the Series A QUIDS will be the sole assets of the Series A Issuer, and payments under the Series A QUIDS will be the sole revenue of the Series A Issuer. All of the Series A Common Securities will be owned by Nevada Power. The Series A Common Securities will rank PARI PASSU, and payments will be made thereon pro rata, with the Series A QUIPS, except that upon the occurrence and continuance of an event of default under the Trust Agreement resulting from a Debenture Event of Default, the rights of Nevada Power as holder of the Series A Common Securities to payment in respect of Distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the Series A QUIPS. See "Description of QUIPS--Subordination of Common Securities" in the accompanying Prospectus. Nevada Power will acquire Series A Common Securities in an aggregate liquidation amount equal to 3% of the total capital of the Series A Issuer. The Series A Issuer has a term of 55 years, but may terminate earlier as provided in the Trust Agreement. The principal executive office of the Series A Issuer is 6226 West Sahara Avenue, Las Vegas, Nevada 89102, Attention: Secretary, and its telephone number is (702) 367-5000. See "The Issuers" in the accompanying Prospectus. NEVADA POWER COMPANY Nevada Power, incorporated under the laws of Nevada in 1929, is an operating public utility engaged in the electric utility business in the City of Las Vegas and vicinity in Southern Nevada. As of September 30, 1996, Nevada Power served approximately 478,620 customers in its service area which has a population of approximately 1,250,000. For the year 1995, Nevada Power's electric energy requirements were obtained from the following sources: coal generation--43%, oil and natural gas--13%, and purchased power, including hydroelectric--44%. Growth in Nevada Power's service territory is continuing at a rapid pace. Nevada Power's customer base grew at annual rates of 7.2%, 6.0% and 6.0% during 1996, 1995 and 1994, respectively. Kilowatthour sales increased 13.1%, 1.4% and 7.1% during 1996, 1995 and 1994, respectively. The principal executive offices of Nevada Power are located in Las Vegas, Nevada, and its mailing address is P.O. Box 230, Las Vegas, Nevada 89151, telephone number (702) 367-5000. S-8 RECENT DEVELOPMENTS In January 1997, the Public Service Commission of Nevada ("PSCN") approved Nevada Power's request to reduce customers' rates by nearly $45 million on an annual basis. Nevada Power's reductions of its own fuel costs, combined with its ability to take advantage of low fuel prices for purchased power in wholesale markets resulted in the largest single rate reduction in Nevada Power's history. In January 1997, the PSCN also rendered its decision in a separate matter involving a long-standing dispute between Nevada Power, the PSCN Staff and the Office of Consumer Advocate, involving various coal contracting matters, and ordered a one-time reduction in customer rates of approximately $8.5 million. The decision on the coal contracting matters will result in a $5.5 million after tax reduction in fourth quarter 1996 earnings available to common shareholders or approximately $0.11 per average common share. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratios of earnings to fixed charges for Nevada Power for the periods indicated:
SEPTEMBER 30, DECEMBER 31, -------------------- ----------------------------------------------------- 1996 1995 1995 1994 1993 1992 1991 --------- --------- --------- --------- --------- --------- --------- Twelve Months Ratio of Earnings to Fixed Charges.......................................... 3.02 2.92 2.84 3.11 2.90 2.42 1.89
In computing the ratio, earnings represent income before interest expenses, plus income taxes; fixed charges represent the total of interest on long-term debt, amortization of debt discount, premiums and expenses, other interest, plus one-third annual rentals. USE OF PROCEEDS All of the proceeds from the sale of the Series A QUIPS will be invested by the Series A Issuer in Series A QUIDS. Nevada Power intends that the proceeds from the sale will be used for general corporate utility purposes, which may include the purchase or redemption of one or more series of its preferred stock, capital expenditures, the reduction of short-term borrowings and working capital. ACCOUNTING TREATMENT For financial reporting purposes, the Series A Issuer will be treated as a subsidiary of Nevada Power and, accordingly, the accounts of the Series A Issuer will be included in the financial statements of Nevada Power. The Series A QUIPS will be presented as a separate line item in the balance sheet of Nevada Power and appropriate disclosures about the Series A QUIPS, the Series A Guarantee and the Series A QUIDS will be included in the notes to the financial statements. For financial reporting purposes, Nevada Power will record Distributions payable on the Series A QUIPS as an expense. S-9 CAPITALIZATION The following table sets forth the capitalization of Nevada Power, the Series A Issuer and Nevada Power's subsidiaries as of September 30, 1996 and as adjusted to give effect to the sale of $125 million Series A QUIPS, the assumed application of a portion of the proceeds therefrom to redeem all of Nevada Power's outstanding preferred stock and the sale in October 1996 of $20 million Pollution Control Revenue Bonds due 2036. The following data should be read in conjunction with the financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operation of Nevada Power incorporated herein by reference to Nevada Power's Annual Report on Form 10-K for the year ended December 31, 1995 and Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1996.
AS OF SEPTEMBER 30, 1996 -------------------------- ACTUAL AS ADJUSTED ------------ ------------ (IN THOUSANDS) DEBT: Short-Term Debt and Current Maturities................................................ $ 12,738 $ 12,738 Secured Debt: Capital Leases...................................................................... 97,748 97,748 Other Secured....................................................................... 536,958 536,958 ------------ ------------ Total Secured Debt................................................................ 634,706 634,706 ------------ ------------ Unsecured Debt: Pollution Control Revenue Bonds..................................................... 33,300 53,300 Industrial Development Bonds........................................................ 133,761 133,761 ------------ ------------ Total Unsecured Debt.............................................................. 167,061 187,061 ------------ ------------ Total Debt...................................................................... 814,505 834,505 ------------ ------------ GUARANTEED PREFERRED BENEFICIAL INTERESTS IN COMPANY'S DEBENTURES:.................... -- 120,800* SHAREHOLDERS' EQUITY: Cumulative Preferred Stock with Mandatory Sinking Funds and Redeemable Cumulative Preferred Stock..................................................................... 41,664 -- Common Shareholders' Equity........................................................... 814,338 814,338 ------------ ------------ Total Shareholders' Equity........................................................ 856,002 814,338 ------------ ------------ Total Capitalization............................................................ $ 1,670,507 $ 1,769,643 ------------ ------------ ------------ ------------
* Net of issuance costs S-10 SELECTED FINANCIAL AND OPERATING INFORMATION The following selected financial data for the five years ended December 31, 1995 are derived from the audited financial statements of Nevada Power for the respective years in the five-year period then ended. The following selected data as of and for the periods ended September 30, 1996 and 1995 have been derived from financial statements of Nevada Power that have not been audited, but that, in the opinion of the management of Nevada Power, reflect all adjustments necessary for the fair presentation of such data for the interim periods. The results of operations for the nine months ended September 30, 1996 are not necessarily indicative of the results of operations for the full year. This financial information should be read in conjunction with the financial statements and related notes thereto incorporated herein by reference to Nevada Power's Annual Report on Form 10-K for the year ended December 31, 1995 and Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1996. SELECTED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, -------------------- ----------------------------------------------------- INCOME STATEMENT DATA: 1996 1995 1995 1994 1993 1992 1991 --------- --------- --------- --------- --------- --------- --------- Electric revenues............. $ 640,132 $ 598,667 $ 749,981 $ 764,158 $ 651,772 $ 600,915 $ 546,411 Operating expenses............ 464,305 449,121 579,105 593,907 489,624 456,725 440,059 --------- --------- --------- --------- --------- --------- --------- Earnings before income taxes....................... 175,827 149,546 170,876 170,251 162,148 144,190 106,352 Interest expense.............. 36,740 34,087 46,936 43,015 39,305 41,466 40,138 Taxes......................... 58,638 49,882 53,318 56,454 53,679 44,068 28,925 Other income (expenses)....... 1,686 5,446 6,349 11,088 4,384 (1,876) (2,113) --------- --------- --------- --------- --------- --------- --------- Net Income.................... 82,135 71,023 76,971 81,870 73,548 56,780 35,176 Dividend requirements on preferred stock............. 2,968 2,975 3,966 3,976 3,986 4,262 2,880 --------- --------- --------- --------- --------- --------- --------- Earnings available for common stock....................... $ 79,167 $ 68,048 $ 73,005 $ 77,894 $ 69,562 $ 52,518 $ 32,296 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Weighted average common shares outstanding................. 47,757 46,081 46,288 42,784 39,482 35,652 30,855 Earnings per average common share....................... $ 1.66 $ 1.48 $ 1.58 $ 1.82 $ 1.76 $ 1.47 $ 1.05 Dividends declared per common share....................... $ 1.20 $ 1.20 $ 1.60 $ 1.60 $ 1.60 $ 1.60 $ 1.60 BALANCE SHEET DATA: Net property, plant & equipment................... $1,790,620 $1,661,424 $1,701,120 $1,584,003 $1,450,146 $1,328,670 $1,187,154 Total assets.................. 2,141,804 2,035,548 2,047,611 1,907,389 1,809,337 1,557,040 1,410,022 Long-term debt................ 801,767 786,459 799,999 712,571 716,589 715,451 578,540 Shareholders' equity.......... 856,002 812,392 806,224 773,813 688,188 574,937 502,971 CASH FLOW DATA: Cash from operating activities.................. $ 128,442 $ 157,275 $ 185,919 $ 144,270 $ 130,945 $ 107,378 $ 100,305 Cash from investing activities.................. (134,771) (105,031) (160,828) (184,349) (165,858) (175,200) (152,142) Cash from financing activities.................. (18,314) 12,775 293 40,057 34,898 67,828 51,806 --------- --------- --------- --------- --------- --------- --------- Net increase (decrease) during the period.................. $ (24,643) $ 65,019 $ 25,384 $ (22) $ (15) $ 6 $ (31) --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
SELECTED OPERATING INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, -------------------- ----------------------------------------------------- 1996 1995 1995 1994 1993 1992 1991 --------- --------- --------- --------- --------- --------- --------- Electric sales (megawatt hours, in thousands)................. 10,567,324 9,362,465 12,109,355 11,942,724 11,155,270 10,541,204 9,834,952
S-11 CERTAIN TERMS OF SERIES A QUIPS The following summary of certain terms and provisions of the Series A QUIPS and the Trust Agreement supplements the description of the terms and provisions of the QUIPS set forth in the accompanying Prospectus under the heading "Description of QUIPS", to which description reference is hereby made. This summary of certain terms and provisions of the Series A QUIPS and the Trust Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Trust Agreement and the Trust Indenture Act. The form of the Trust Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus Supplement and accompanying Prospectus is a part. GENERAL The Series A QUIPS and Series A Common Securities represent undivided beneficial interests in the assets of the Series A Issuer. The Series A QUIPS and Series A Common Securities will have a liquidation preference of $25 per unit. Approximately 97% of the total liquidation preference amount will be represented by Series A QUIPS and the remainder by Series A Common Securities. All of the Series A Common Securities will be owned by Nevada Power. The Series A Common Securities rank PARI PASSU, and payment will be made thereon pro rata with the Series A QUIPS based on the liquidation preference of the Series A QUIPS and the Series A Common Securities, except that, if an Event of Default under the Trust Agreement resulting from a Debenture Event of Default shall have occurred and be continuing, the Series A QUIPS will have a preference over the Series A Common Securities. The Series A QUIDS will be held by the Property Trustee in trust for the benefit of the holders of the Series A QUIPS and Series A Common Securities. Nevada Power has agreed in an Agreement as to Expenses and Liabilities (the "Expense Agreement") to provide funds to the Series A Issuer as needed to pay obligations of the Series A Issuer to parties other than the holders of the Series A QUIPS and Series A Common Securities. The Series A QUIDS and the Series A Guarantee, together with the obligations of Nevada Power with respect to the Series A QUIPS under the Indenture, the Trust Agreement and the Expense Agreement, constitute a full and unconditional guarantee, on a subordinated basis, by Nevada Power of payments on the Series A QUIPS in accordance with their terms. See "Description of Guarantees". DISTRIBUTIONS Distributions on each Series A QUIPS will be payable at the annual rate of % of the stated liquidation preference of $25, payable quarterly in arrears on the last day of March, June, September and December of each year. Distributions will accumulate from , 1997, the date of original issuance. The first Distribution payment date for the Series A QUIPS will be , 1997. The amount of Distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which Distributions are payable on the Series A QUIPS is not a Business Day, then payment of the Distributions payable on such date will be made on the next succeeding day that is a Business Day (and without any additional Distributions or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable. See "Description of QUIPS--Distributions" in the accompanying Prospectus. So long as no Debenture Event of Default has occurred and is continuing, Nevada Power has the right under the Indenture to defer the payment of interest on the Series A QUIDS at any time or from time to time for a period not exceeding 20 consecutive quarters with respect to each Extension Period, provided that no Extension Period may extend beyond the Maturity Date of the Series A QUIDS. At the end of each Extension Period, Nevada Power shall pay all interest then accrued and unpaid together with interest on all such accrued and unpaid amounts calculated at the applicable rate. During an Extension Period, Nevada Power may prepay any deferred interest prior to the end of an Extension Period in whole or in part S-12 on any Interest Payment Date. Upon the termination of any Extension Period and the payment of all payments then due on any Interest Payment Date, Nevada Power may elect to begin a new Extension Period subject to the above requirements. If interest payments on the Series A QUIDS are so deferred, Distributions on the Series A QUIPS will also be deferred and Nevada Power will not be permitted, and no subsidiary of Nevada Power will be permitted, to (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of Nevada Power's capital stock or (ii) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks PARI PASSU with or junior in right of payment to the Series A QUIDS, or make any guarantee payments with respect to any indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to the Series A QUIDS (other than (a) dividends or distributions in Common Stock of Nevada Power, (b) redemptions or purchases of any rights pursuant to Nevada Power's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under Nevada Power's Stock Purchase and Dividend Reinvestment Plan and any of Nevada Power's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by Nevada Power or any of its subsidiaries). During an Extension Period, interest on the Series A QUIDS will continue to accrue (and the amount of Distributions to which holders of the Series A QUIPS are entitled will accumulate at the rate of % per annum, compounded quarterly) and holders of Series A QUIDS will be required to accrue interest income in the form of OID for United States federal income tax purposes in advance of receipt of cash related to such income as described herein. See "Certain Terms of Series A QUIDS--Option to Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--Potential Extension of Interest Payment Period and Original Issue Discount". Nevada Power has no current intention of exercising its right to defer payments of interest by extending the interest payment period on the Series A QUIDS. REDEMPTION Upon the repayment or redemption, in whole or in part, of the Series A QUIDS, whether at Stated Maturity or upon earlier redemption as provided in the Indenture, the proceeds from such repayment or redemption shall be applied by the Property Trustee to redeem a Like Amount (as defined in the accompanying Prospectus) of the Series A QUIPS and Series A Common Securities, upon not less than 30 or more than 60 days notice prior to the date fixed for repayment or redemption, at a redemption price (the "Redemption Price"), with respect to the Series A QUIPS, equal to the aggregate liquidation preference of such Series A QUIPS plus accumulated and unpaid Distributions thereon to the date of redemption (the "Redemption Date"). See "Description of QUIPS--Redemption" in the accompanying Prospectus and "Certain Terms of Series A QUIDS--Redemption". Nevada Power will have the right to redeem the Series A QUIDS (i) on or after , 2002, in whole at any time or in part from time to time, at a redemption price equal to the accrued and unpaid interest on the Series A QUIDS so redeemed to the date fixed for redemption, plus 100% of the principal amount thereof or (ii) at any time, in whole (but not in part), upon the occurrence and continuation of a Tax Event or an Investment Company Event (each as defined in the accompanying Prospectus, and as so collectively defined, a "Special Event"), at a redemption price equal to the accrued and unpaid interest on the Series A QUIDS so redeemed to the date fixed for redemption, plus 100% of the principal amount thereof, in each case subject to conditions described under "Description of QUIDS--Redemption" and "Description of Corresponding QUIDS--Optional Redemption" in the accompanying Prospectus. S-13 SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF SERIES A QUIDS If a Special Event shall have occurred and be continuing, Nevada Power will have the right to redeem the Series A QUIDS in whole (but not in part) and thereby cause a mandatory redemption of the Series A QUIPS in whole (but not in part) at the Redemption Price within 90 days following the occurrence of such Special Event. At any time, Nevada Power will have the right to terminate the Series A Issuer and, after satisfaction of the liabilities of creditors of the Series A Issuer as provided by applicable law, cause the Series A QUIDS to be distributed to the holders of the Series A QUIPS in liquidation of the Series A Issuer. Under current United States federal income tax law and interpretations and assuming, as expected, the Series A Issuer is treated as a grantor trust, a distribution of the Series A QUIDS should not be a taxable event to holders of the Series A QUIPS. See "Certain Federal Income Tax Consequences-- Distribution of Series A QUIDS to Holders of Series A QUIPS". If Nevada Power does not elect either option described above, the Series A QUIPS will remain outstanding until the repayment of the Series A QUIDS. If Nevada Power elects to liquidate the Series A Issuer and thereby causes the Series A QUIDS to be distributed to holders of the Series A QUIPS in liquidation of the Series A Issuer, Nevada Power may shorten or extend the maturity of such Series A QUIDS, except that it can extend the maturity only if certain conditions are met. See "Description of QUIPS--Redemption--Extension of Maturity of Corresponding QUIDS" in the accompanying Prospectus and "Certain Terms of Series A QUIDS--General". LIQUIDATION VALUE The amount payable on the Series A QUIPS in the event of any liquidation of the Series A Issuer is $25 per Series A QUIPS plus accumulated and unpaid Distributions, which may be in the form of a distribution of such amount in Series A QUIDS, subject to certain exceptions. See "Description of QUIPS--Liquidation Distribution Upon Termination" in the accompanying Prospectus. SAME-DAY SETTLEMENT AND PAYMENT Settlement for the Series A QUIPS will be made by the Underwriters in immediately available funds. All payments of principal and interest will be made by the Series A Issuer in immediately available funds. Secondary trading in preferred securities of corporate issuers is generally settled in clearinghouse or next-day funds. In contrast, the Series A QUIPS will trade in DTC's Same-Day Funds Settlement System until maturity or until the Series A QUIPS are issued in certificated form, and secondary market trading activity in the Series A QUIPS will therefore be required by DTC to settle in immediately available funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on trading activity in the Series A QUIPS. CERTAIN TERMS OF SERIES A QUIDS The following summary of certain terms and provisions of the Series A QUIDS supplements the description of the terms and provisions of the Corresponding QUIDS set forth in the accompanying Prospectus under the headings "Description of QUIDS" and "Description of Corresponding QUIDS", to which description reference is hereby made. The summary of certain terms and provisions of the Series A QUIDS set forth below does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Indenture. The Indenture has been filed as an exhibit to the Registration Statement of which this Prospectus Supplement and accompanying Prospectus is a part. GENERAL Concurrently with the issuance of the Series A QUIPS, the Series A Issuer will invest the proceeds thereof and the consideration paid by Nevada Power for the Series A Common Securities in the Series A QUIDS issued by Nevada Power. The Series A QUIDS will bear interest at the annual rate of % of the S-14 principal amount thereof, payable quarterly in arrears on the last day of March, June, September and December of each year (each, an "Interest Payment Date"), commencing , 1997, to the person in whose name each Series A QUIDS is registered, subject to certain exceptions, at the close of business on the Business Day next preceding such Interest Payment Date. It is anticipated that, until the liquidation, if any, of the Series A Issuer, each Series A QUIDS will be held in the name of the Property Trustee in trust for the benefit of the holders of the Series A QUIPS. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Series A QUIDS 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 other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable. Accrued interest that is not paid on the applicable Interest Payment Date will bear additional interest on the amount thereof (to the extent permitted by law) at the rate per annum of % thereof, compounded quarterly. The term "interest" as used herein shall include quarterly interest payments, interest on quarterly interest payments not paid on the applicable Interest Payment Date and Additional Sums (as defined below), as applicable. The Series A QUIDS will be issued as a series of QUIDS under the Indenture. The Series A QUIDS will mature on , 2037, which date may be extended at any time at the election of Nevada Power for one or more periods, but in no event to a date later than , 2046 (such date, as it may be extended, the "Maturity Date"), provided that at the time such election is made and at the time of extension (i) Nevada Power is not in bankruptcy, otherwise insolvent or in liquidation, (ii) Nevada Power is not in default in the payment of any interest or principal on the Series A QUIDS and no deferred interest payments thereon have accrued and remain unpaid, (iii) the Series A Issuer is not in arrears on payments of Distributions on the Series A QUIPS and no deferred Distributions are accumulated, (iv) the Series A QUIDS are rated not less than BBB- by Standard & Poor's Ratings Services or Baa3 by Moody's Investors Service, Inc. or the equivalent by any other nationally recognized statistical rating organization and (v) the extended Maturity Date is no later than the 49th anniversary of the initial issuance of the Series A QUIPS; PROVIDED, HOWEVER, that, if Nevada Power exercises its right to liquidate the Series A Issuer and exchange the Series A QUIDS for the Series A QUIPS, effective upon such exercise the Stated Maturity of the Series A QUIDS may be changed to any date elected by Nevada Power that is (i) no earlier than the date five years after the initial issuance of the Series A QUIPS and (ii) no later than the date 40 years (plus an extended term of up to an additional 9 years if the above-referenced conditions are satisfied) after the date of the initial issuance of the Series A QUIPS. The Series A QUIDS will be unsecured and will rank junior and be subordinate in right of payment to all Senior Debt of Nevada Power. The Indenture does not limit the incurrence or issuance of other secured or unsecured debt of Nevada Power, whether under the Indenture or any existing or other indenture that Nevada Power may enter into in the future or otherwise, including, without limitation, Nevada Power's Indenture of Mortgage and Deed of Trust dated October 1, 1953 entered into with Banker's Trust Company, together with supplemental indentures thereto heretofore or hereafter entered into (the "Mortgage Indenture"). At December 31, 1996, the aggregate principal amount of indebtedness outstanding under the Mortgage Indenture was $443 million, all of which is secured by a first mortgage lien and security interest in substantially all of the tangible property of Nevada Power. See "Description of QUIDS--Subordination" in the accompanying Prospectus. OPTION TO EXTEND INTEREST PAYMENT PERIOD So long as no Debenture Event of Default has occurred and is continuing, Nevada Power has the right under the Indenture to defer the payment of interest at any time or from time to time for a period not exceeding 20 consecutive quarters with respect to each Extension Period, provided that no Extension Period may extend beyond the Maturity Date of the Series A QUIDS. At the end of such Extension Period, S-15 Nevada Power must pay all interest then accrued and unpaid (together with interest thereon at the annual rate of %, compounded quarterly, to the extent permitted by applicable law). During an Extension Period, Nevada Power may prepay any deferred interest prior to the end of an Extension Period in whole or in part on any Interest Payment Date. During an Extension Period, interest will continue to accrue and holders of Series A QUIDS (or holders of Series A QUIPS while such series is outstanding) will be required to accrue interest income in the form of OID for United States federal income tax purposes as described herein. See "Certain Federal Income Tax Consequences--Payments of Interest" and "Potential Extension of Interest Payment Period and Original Issue Discount". During any such Extension Period, Nevada Power may not, and may not permit any subsidiary of Nevada Power to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of Nevada Power's capital stock or (ii) make any payment of principal of, or interest or premium, if any, on or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness (including other QUIDS) that ranks PARI PASSU with or junior in right of payment, to the Series A QUIDS or make any guarantee payments with respect to any indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to the Series A QUIDS (other than (a) dividends or distributions in Common Stock of Nevada Power, (b) redemptions or purchases of any rights pursuant to Nevada Power's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under Nevada Power's Stock Purchase and Dividend Reinvestment Plan and any of Nevada Power's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by Nevada Power or any of its subsidiaries). Prior to the termination of any such Extension Period, Nevada Power may further extend the interest payment period, provided that no Extension Period may exceed 20 consecutive quarters or extend beyond the Maturity Date of the Series A QUIDS. Upon the termination of any such Extension Period and the payment of all amounts then due on any Interest Payment Date, Nevada Power may elect to begin a new Extension Period subject to the above requirements. No interest shall be due and payable during an Extension Period, except at the end thereof. Nevada Power must give the Property Trustee, the Administrative Trustees and the Debenture Trustee notice of its election of such Extension Period at least one Business Day prior to the earlier of (i) the date the Distributions on the Series A QUIPS would have been payable except for the election to begin or continue such Extension Period or (ii) the date the Administrative Trustees are required to give notice to the NYSE, the Nasdaq Stock Market or other applicable interdealer quotation system or self-regulatory organization or to holders of such Series A QUIPS of the record date or the date such Distributions are payable, but in any event not less than one Business Day prior to such record date. The Debenture Trustee shall give notice of Nevada Power's election to begin or continue a new Extension Period to the holders of the Series A QUIPS. See "Description of QUIDS--Option to Extend Interest Payment Date" in the accompanying Prospectus. ADDITIONAL SUMS If the Series A Issuer is required to pay any additional taxes, duties or other governmental charges ("Additional Sums") as a result of a Tax Event, Nevada Power will pay as additional amounts on the Series A QUIDS such amounts as shall be required so that the Distributions payable by the Series A Issuer shall not be reduced as a result of any such additional taxes, duties or other governmental charges, subject to the conditions described under "Description of QUIPS--Redemption--Special Event Redemption or Distribution of Corresponding QUIDS" in the accompanying Prospectus. S-16 REDEMPTION The Series A QUIDS are redeemable prior to maturity at the option of Nevada Power (i) on or after , 2002, in whole at any time or in part from time to time, at a redemption price equal to the accrued and unpaid interest on the Series A QUIDS so redeemed to the date fixed for redemption, plus 100% of the principal amount thereof or (ii) at any time in whole (but not in part), upon the occurrence and continuation of a Special Event, at a redemption price equal to the accrued and unpaid interest on the Series A QUIDS so redeemed to the date fixed for redemption, plus 100% of the principal amount thereof, in each case subject to the further conditions described under "Description of QUIDS-- Redemption" and "Description of Corresponding QUIDS--Optional Redemption" in the accompanying Prospectus. DISTRIBUTIONS OF SERIES A QUIDS Under certain circumstances involving the termination of the Series A Issuer, Series A QUIDS may be distributed to the holders of the Series A QUIPS in liquidation of the Series A Issuer after satisfaction of liabilities to creditors of the Series A Issuer as provided by applicable law. If distributed to holders of Series A QUIPS in liquidation, the Series A QUIDS will initially be issued in the form of one or more global securities and DTC, or any successor depositary for the Series A QUIPS, will act as depositary for the Series A QUIDS. It is anticipated that the depositary arrangements for the Series A QUIDS would be substantially identical to those in effect for the Series A QUIPS. If the Series A QUIDS are distributed to the holders of Series A QUIPS upon the liquidation of the Series A Issuer, Nevada Power will use its best efforts to list the Series A QUIDS on the NYSE or such other stock exchanges, if any, on which the Series A QUIPS are then listed. There can be no assurance as to the market price of any Series A QUIDS that may be distributed to the holders of Series A QUIPS. For a description of DTC and the terms of the depositary matters, see "Description of QUIPS--Book-Entry Issuance" in the accompanying Prospectus. REGISTRATION OF SERIES A QUIDS A global security shall be exchangeable for Series A QUIDS registered in the names of persons other than DTC or its nominee only if (i) DTC notifies Nevada Power that it is unwilling or unable to continue as a depository for such global security and no successor depository shall have been appointed, or if at any time DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when DTC is required to be so registered to act as such depository, (ii) Nevada Power in its sole discretion determines that such global security shall be so exchangeable, or (iii) there shall have occurred and be continuing an Event of Default with respect to such global security. Any global security that is exchangeable pursuant to the preceding sentence shall be exchangeable for definitive certificates registered in such names as DTC shall direct. It is expected that such instructions will be based upon directions received by DTC from its Participants (as defined in the accompanying Prospectus) with respect to ownership of beneficial interests in such global security. In the event that Series A QUIDS are issued in definitive form, such Series A QUIDS will be in denominations of $25 and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments on Series A QUIDS represented by a global security will be made to DTC, as the depositary for the Series A QUIDS. In the event Series A QUIDS are issued in definitive form, principal and interest will be payable, the transfer of the Series A QUIDS will be registrable, and Series A QUIDS will be exchangeable for Series A QUIDS of other denominations of a like aggregate principal amount, at the corporate office of the Debenture Trustee in New York, New York, or at the offices of any paying agent or transfer agent appointed by Nevada Power, provided that payment of interest may be made at the option of Nevada Power by check mailed to the address of the persons entitled thereto or by wire transfer. In addition, if the Series A QUIDS are issued in certificated form, the record dates for payment of interest will be the date which is 15 days prior to the relevant Distribution Date. For a description of DTC and the terms of the depositary arrangements relating to payments, transfers, voting rights, redemptions and other notices and other matters, see "Description of QUIPS--Book-Entry Issuance" in the accompanying Prospectus. S-17 CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a summary of the principal United States federal income tax consequences of the purchase, ownership and disposition of Series A QUIPS. This summary only addresses the United States federal tax consequences to a person that acquires Series A QUIPS on their original issue at their original offering price and that is (i) an individual citizen or resident of the United States, (ii) a corporation or partnership organized in or under the laws of the United States or any state thereof or the District of Columbia or (iii) an estate or trust the income of which is subject to United States federal income tax regardless of source (a "United States Person"). This summary does not address all tax consequences that may be applicable to a United States Person that is a beneficial owner of Series A QUIPS, and it does not address the tax consequences to (i) persons that are not United States Persons, (ii) persons that may be subject to special treatment under United States federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations and dealers in securities or currencies, (iii) persons that will hold Series A QUIPS as part of a position in a "straddle" or as part of a "hedging", "conversion" or other integrated investment transaction for federal income tax purposes, (iv) persons whose functional currency is not the United States dollar or (v) persons that do not hold Series A QUIPS as capital assets. Furthermore, it does not address the effect of any state, local or foreign laws. The statements of law or legal conclusion set forth in this summary constitute the opinion of Jones, Day, Reavis & Pogue, special tax counsel to Nevada Power and the Series A Issuer. Jones, Day, Reavis & Pogue is also acting as counsel to the Underwriters named herein. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations, Internal Revenue Service rulings and pronouncements and judicial decisions now in effect, all of which are subject to change at any time. Such changes may be applied retroactively in a manner that could cause the tax consequences to vary substantially from the consequences described below, possibly adversely affecting a beneficial owner of Series A QUIPS. In particular, President Clinton's fiscal year 1998 budget proposal contains a number of proposed tax law changes that could adversely affect the ability of an issuer to deduct interest on certain types of long-term debt instruments, such as the Series A QUIDS. The proposed changes, however, should not apply to the Series A QUIDS as a result of the proposed effective date of any such tax law changes. See "--Possible Tax Law Changes". The authorities on which this summary is based are subject to various interpretations and it is therefore possible that the federal income tax treatment of the purchase, ownership and disposition of Series A QUIPS may differ from the treatment described below. PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES A QUIPS, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS. CLASSIFICATION OF THE SERIES A ISSUER Under current law and assuming compliance with the terms of the Trust Agreement and certain other documents, the Series A Issuer will be classified as a grantor trust and not as an association taxable as a corporation for United States federal income tax purposes. As a result, each beneficial owner of Series A QUIPS (a "Securityholder") will be treated as owning an undivided beneficial interest in the Series A QUIDS. Accordingly, each Securityholder will be required to include in its gross income its PRO RATA share of the interest income, including any original issue discount ("OID"), paid or accrued with respect to the Series A QUIDS whether or not cash is actually distributed to the Securityholders. See "--Payments of Interest" and "--Potential Extension of Interest Payment Period and Original Issue Discount". S-18 PAYMENTS OF INTEREST Except as set forth below, stated interest on Series A QUIDS will generally be taxable to a United States Person as ordinary income at the time it is paid or accrued in accordance with the United States Person's method of accounting for tax purposes. POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT Under recently issued Treasury regulations (the "Regulations"), a "remote" contingency that stated interest will not be timely paid will be ignored in determining whether a debt instrument is issued with OID. Nevada Power believes that the likelihood of it exercising its option to defer interest payments is remote. Based on the foregoing, Nevada Power believes that the Series A QUIDS will not be considered to be issued with OID at the time of their original issuance and, accordingly, each Securityholder will be required to include interest payments in taxable income at the time accrued or received in accordance with its own method of accounting. However, if Nevada Power were to exercise its right to defer payments of interest thereon, the Series A QUIDS would be considered to be retired and reissued for their adjusted issue price at such time, and the Series A QUIDS thereafter would be considered to have been issued with OID. Securityholders would include that discount in income on an economic accrual basis before the receipt of cash attributable to the interest, regardless of their method of tax accounting, and actual distributions of stated interest would not be reported as taxable income. Accordingly, a Securityholder of Series A QUIPS would be required to include in gross income OID even if Nevada Power did not make any actual cash payments during an Extension Period. As of the date of this Prospectus Supplement, the Regulations have not been addressed in any rulings or other interpretations by the Internal Revenue Service (the "IRS"), and it is possible that the IRS could take a position contrary to the interpretation herein. Because income on the Series A QUIPS will constitute interest or OID, corporate Securityholders will not be entitled to a dividends-received deduction with respect to any income recognized with respect to the Series A QUIPS. Subsequent uses of the term "interest" in this summary include income in the form of OID. DISTRIBUTION OF SERIES A QUIDS TO HOLDERS OF SERIES A QUIPS As described under the caption "Certain Terms of Series A QUIPS-- Redemption--Special Event Redemption or Distribution of Series A QUIDS", Series A QUIDS may be distributed to Securityholders in exchange for Series A QUIPS and in liquidation of the Series A Issuer. Under current law, for United States federal income tax purposes, such a distribution will be non-taxable and will result in the Securityholder receiving directly his PRO RATA share of the Series A QUIDS previously held indirectly through the Series A Issuer, with a holding period and aggregate tax basis equal to the holding period and aggregate tax basis such Securityholder had in its Series A QUIPS before such distribution. A Securityholder will be considered to receive interest in respect of Series A QUIDS received from the Series A Issuer in the manner described above under "--Payments of Interest" and "--Potential Extension of Interest Payment Period and Original Issue Discount". SALES OR REDEMPTION OF SERIES A QUIPS A Securityholder that sells (including a redemption for cash) Series A QUIPS will recognize gain or loss equal to the difference between its adjusted tax basis in the Series A QUIPS and the amount realized on the sale of such Series A QUIPS. Assuming that Nevada Power does not exercise its option to defer payment of interest on the Series A QUIDS, a Securityholder's adjusted tax basis in the Series A QUIPS generally will be its initial purchase price. If the Series A QUIDS are deemed to be issued with OID as a S-19 result of Nevada Power's deferral of any interest payment, a Securityholder's tax basis in the Series A QUIPS generally will be its initial purchase price, increased by OID previously includible in such Securityholder's gross income to the date of disposition and decreased by distributions or other payments received on the Series A QUIPS since and including the date of the first Extension Period. Such gain or loss generally will be a capital gain or loss (except to the extent any amount realized is treated as a payment of accrued interest with respect to such holder's pro rata share of Series A QUIDS required to be included in income) and generally will be a long-term capital gain or loss if the Series A QUIPS have been held for more than one year. Should Nevada Power exercise its option to defer any payment of interest on the Series A QUIPS, the Series A QUIPS may trade at a price that does not accurately reflect the value of accrued but unpaid interest with respect to the underlying Series A QUIDS. Should an Extension Period occur, a Securityholder that disposes of its Series A QUIPS between record dates for payments of Distributions will nevertheless be required to include in income as ordinary income accrued but unpaid interest on such holder's pro rata share of the underlying Series A QUIDS to the date of disposition as OID and to add such amount to its adjusted tax basis in its pro rata share of the underlying Series A QUIDS deemed disposed of. Such Securityholder will recognize a capital loss on the disposition of its Series A QUIPS to the extent the selling price is less than the Securityholder's adjusted tax basis in the Series A QUIPS. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for federal income tax purposes. BACKUP WITHHOLDING TAX AND INFORMATION REPORTING The amount of OID accrued on the Series A QUIPS held of record by United States Persons (other than corporations and other exempt Securityholders) will be reported to the Internal Revenue Service. "Backup" withholding at a rate of 31% will apply to payments of interest to non-exempt United States Persons unless the Securityholder furnishes its taxpayer identification number in the manner prescribed in applicable Treasury Regulations, certifies that such number is correct, certifies as to no loss of exemption from backup withholding and meets certain other conditions. Payment of the proceeds from the disposition of Series A QUIPS to or through the United States office of a broker is subject to information reporting and backup withholding unless the holder or beneficial owner establishes an exemption from information reporting and backup withholding. Any amounts withheld from a Securityholder under the backup withholding rules will be allowed as a refund or a credit against such Securityholder's United States federal income tax liability, provided the required information is furnished to the Internal Revenue Service. POSSIBLE TAX LAW CHANGES On February 6, 1997, President Clinton released his fiscal year 1998 budget proposal, which contains a number of proposed tax law changes (the "Proposed Legislation"). The Proposed Legislation would, among other things, generally deny interest deductions for interest on an instrument issued by a corporation, that has a maximum weighted average maturity of more than 40 years. The Proposed Legislation would also generally deny interest deductions for interest on an instrument issued by a corporation that has a maximum term of more than 15 years and that is not shown as indebtedness on the separate balance sheet of the issuer or, in the case of an instrument with a maximum term of more than 15 years issued to a related party (other than a corporation), if the holder or some other related party issues a related instrument that is not shown as indebtedness on the issuer's consolidated balance sheet. For purposes of determining the weighted average maturity or the term of an instrument, any right to extend would be treated as exercised. The above-described provisions of the Proposed Legislation, if enacted into law, are proposed to be effective generally for instruments issued on or after the date of first committee action in Congress. Nevada Power has been advised that the date of first committee action is intended to be the S-20 effective date designated by the tax-writing committees of Congress if the proposals are included in a revenue bill that is adopted by Congress. Although there can be no assurance, Nevada Power believes that any such effective date would not be prior to the date on which the Series A QUIPS are issued. Based on the proposed effective date, if the Proposed Legislation were to be enacted in the form proposed, the above-described provisions should not apply to the Series A QUIDS. If either provision were to apply to the Series A QUIDS, Nevada Power would be unable to deduct interest on the Series A QUIDS. Nevada Power believes that, under current law, it will be able to deduct interest on the Series A QUIDS. Although the above-described provisions of the Proposed Legislation should not apply to the Series A QUIDS, given the proposed effective date, there can be no assurance that future legislation will not be introduced and enacted which would adversely affect the ability of Nevada Power to deduct interest on the Series A QUIDS or otherwise affect the tax treatment of the transaction described herein. A change in the deductibility of interest and certain other changes could give rise to a Tax Event, which may permit Nevada Power to cause a redemption of the Series A QUIPS, as described more fully in the accompanying Prospectus under "Description of QUIPS--Redemption--Special Event Redemption or Distribution of Corresponding QUIDS". UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement, Nevada Power and the Series A Issuer have agreed that the Series A Issuer will sell to each of the Underwriters named below, and each of such Underwriters, for whom Goldman, Sachs & Co., Dean Witter Reynolds Inc., Legg Mason Wood Walker, Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and PaineWebber Incorporated are acting as representatives, has severally agreed to purchase from the Series A Issuer the respective number of Series A QUIPS set forth opposite its name below:
NUMBER OF SERIES A UNDERWRITER QUIPS - ----------------------------------------------------------------------------------------------------- ---------- Goldman, Sachs & Co.................................................................................. Dean Witter Reynolds Inc............................................................................. Legg Mason Wood Walker, Incorporated................................................................. Merrill Lynch, Pierce, Fenner & Smith Incorporated............................................................................... PaineWebber Incorporated............................................................................. ---------- Total............................................................................................ 5,000,000 ---------- ----------
Subject to the terms and conditions set forth in the Underwriting Agreement, the Underwriters are committed to take and pay for all such Series A QUIPS offered hereby, if any are taken. The Underwriters propose to offer the Series A QUIPS in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement and in part to certain securities dealers at such price less a concession of $ per Series A QUIPS. The Underwriters may allow, and such dealers may reallow, a concession not to exceed $ per Series A QUIPS to certain brokers and dealers. After the Series A QUIPS are released for sale to the public, the offering price and other selling terms may from time to time be varied by the representatives. In view of the fact that the proceeds from the sale of the Series A QUIPS will be used to purchase the Series A QUIDS issued by Nevada Power, the Underwriting Agreement provides that Nevada Power will pay as Underwriters' compensation for the Underwriters' arranging the investment therein of such proceeds an amount of $ per Series A QUIPS for the accounts of the several Underwriters. Nevada Power and the Series A Issuer have agreed that, during the period beginning from the date of the Underwriting Agreement and continuing to and including the earlier of (i) the termination of trading S-21 restrictions on the Series A QUIPS, as determined by the Underwriters, and (ii) 30 days after the closing date, they will not offer, sell, contract to sell or otherwise dispose of any QUIPS, any other beneficial interests in the assets of the Series A Issuer, or any preferred securities or any other securities of the Series A Issuer or Nevada Power which are substantially similar to the Series A QUIPS, including any guarantee of such securities, or any securities convertible into or exchangeable for or representing the right to receive Series A QUIPS, other beneficial interests of the Series A Issuer, preferred securities or any such substantially similar securities of either the Series A Issuer or Nevada Power, without the prior written consent of the representatives, except for the Series A QUIPS and the Series A Guarantee offered in connection with the offering. Prior to this offering, there has been no public market for the Series A QUIPS. Application has been made to list the Series A QUIPS on the NYSE under the symbol "NVP Pr". In order to meet one of the requirements for listing the Series A QUIPS on the NYSE, the Underwriters will undertake to sell lots of 100 or more Series A QUIPS to a minimum of 400 beneficial holders. Trading of the Series A QUIPS on the NYSE is expected to commence within 30 days after the initial delivery of the Series A QUIPS. The representatives of the Underwriters have advised Nevada Power that they intend to make a market in the Series A QUIPS prior to commencement of trading on the NYSE, but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Series A QUIPS. Nevada Power and the Series A Issuer have agreed to indemnify the several Underwriters against and contribute toward certain liabilities, including liabilities under the Securities Act of 1933, as amended. Certain of the Underwriters or their affiliates have provided from time to time, and expect to provide in the future, investment or commercial banking services to Nevada Power and its affiliates, for which such Underwriters or their affiliates have received or will receive customary fees and commissions. LEGAL MATTERS Certain matters of Delaware law relating to the legality of the Series A QUIPS, the validity of the Trust Agreement and the formation of the Series A Issuer will be passed upon by Richards, Layton & Finger, special Delaware Counsel to Nevada Power and the Series A Issuer. The legality of the Series A Guarantee and the Series A QUIDS will be passed upon for Nevada Power by Mr. Richard L. Hinckley, Vice President, Secretary and Chief Counsel for Nevada Power and by Best Best & Krieger LLP. Certain legal matters will be passed upon for the Underwriters by Jones, Day, Reavis & Pogue, Chicago, Illinois. Certain matters relating to United States federal income tax considerations will be passed upon for Nevada Power and the Series A Issuer by their special tax counsel, Jones, Day, Reavis & Pogue, Chicago, Illinois. For the purposes of their opinions, Best Best & Krieger LLP and Jones Day Reavis & Pogue may rely on the opinion of Mr. Hinckley as to matters governed by the laws of the State of Nevada. S-22 SUBJECT TO COMPLETION, DATED MARCH 13, 1997 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. $125,000,000 NEVADA POWER COMPANY NVP CAPITAL I JUNIOR SUBORDINATED DEFERRABLE NVP CAPITAL II INTEREST DEBENTURES PREFERRED SECURITIES GUARANTEED, AS SET FORTH HEREIN, BY
NEVADA POWER COMPANY Nevada Power Company, a Nevada corporation ("Nevada Power"), may from time to time offer in one or more series or issuances its junior subordinated deferrable interest debentures (the "QUIDS"). The QUIDS will be unsecured and subordinate and junior in right of payment to Senior Debt (as defined in "Description of QUIDS Subordination") of Nevada Power. If provided in an accompanying Prospectus Supplement, Nevada Power will have the right to defer payments of interest on any series of QUIDS at any time or from time to time for such number of consecutive interest payment periods (which shall not extend beyond the maturity of the QUIDS) with respect to each deferral period as may be specified in such Prospectus Supplement (each, an "Extension Period"). See "Description of QUIDS--Option to Extend Interest Payment Date". NVP Capital I and NVP Capital II, each a trust formed under the laws of the State of Delaware (each, an "Issuer", and collectively, the "Issuers"), may severally offer, from time to time, preferred securities (the "QUIPS") representing preferred undivided beneficial interests in the assets of such Issuer. Nevada Power will be the owner of the common securities (the "Common Securities") of each Issuer. The payment of periodic cash distributions ("Distributions") with respect to the QUIPS of each Issuer and payments on liquidation or redemption with respect to such QUIPS, in each case to the extent of funds held by such Issuer, are each irrevocably guaranteed by Nevada Power as described herein (each, a "Guarantee"). See "Description of Guarantees". The obligations of Nevada Power under each Guarantee will be subordinate and junior in right of payment to all Senior Debt (as defined in "Description of QUIDS--Subordination") of Nevada Power. Concurrently with the issuance by an Issuer of its QUIPS, such Issuer will invest the proceeds thereof and any contributions made by Nevada Power in respect of Nevada Power's purchase of the Common Securities in a corresponding series of Nevada Power's QUIDS (the "Corresponding QUIDS") with terms corresponding to the terms of that Issuer's QUIPS. The Corresponding QUIDS will be the sole assets of each Issuer, and payments under the Corresponding QUIDS and the Expense Agreement (as defined herein) will be the only revenue of each Issuer. Nevada Power may redeem the Corresponding QUIDS (and cause the redemption of the related QUIPS) or may terminate each Issuer and cause the Corresponding QUIDS to be distributed to the holders of QUIPS in liquidation of their interests in such Issuer. See "Description of QUIPS--Liquidation Distribution Upon Termination". Holders of the QUIPS will be entitled to receive preferential cumulative cash Distributions accumulating from the date of original issuance and payable periodically as specified in an accompanying Prospectus Supplement. If provided in an accompanying Prospectus Supplement, Nevada Power will have the right to defer payments of interest on any series of Corresponding QUIDS at any time or from time to time for one or more Extension Periods (which shall not extend beyond the Maturity Date of the Corresponding QUIDS). If interest payments are so deferred, Distributions on the corresponding series of QUIPS will also be deferred, and Nevada Power will not be permitted, and its subsidiaries will not be (CONTINUED ON NEXT PAGE) ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The date of this Prospectus is , 1997. (CONTINUED FROM PREVIOUS PAGE) permitted, subject to certain exceptions set forth herein, to declare or pay any cash distributions with respect to Nevada Power's capital stock or indebtedness that ranks PARI PASSU with or junior to the Corresponding QUIDS. During an Extension Period, interest on the Corresponding QUIDS will continue to accrue (and the amount of Distributions to which holders of the QUIPS are entitled will accumulate at the rate per annum set forth in the related Prospectus Supplement). See "Description of QUIPS-- Distributions". Taken together, Nevada Power's obligations under each series of QUIDS, the Indenture, the related Trust Agreement, the related Expense Agreement and the related Guarantee (each, as defined herein), in the aggregate, provide a full, irrevocable and unconditional guarantee, on a subordinated basis, of payments of distributions and other amounts due on the related series of QUIPS. See "Relationship Among the QUIPS, the Corresponding QUIDS and the Guarantees". As of December 31, 1996, Nevada Power had approximately $900 million aggregate principal amount of Senior Debt outstanding. At that date, the amount of obligations of Nevada Power on a parity with any QUIDS and the accompanying Guaranteed aggregated approximately $480 million, consisting primarily of accounts payable, accrued liabilities, including taxes, interest and deposits, and deferred credits and other liabilities all arising in the ordinary course of business. Such amount excludes commitments or contingencies in respect of existing or future obligations for (by way of example) construction expenditures, fuel and purchased power obligations and operating lease obligations. Neither the terms of the Series A QUIDS nor the Series A Guarantee place any limitation on the amount of Senior Debt that may be incurred by Nevada Power. See "Description of QUIDS--Subordination" in the accompanying Prospectus. The QUIDS and QUIPS may be offered in amounts, at prices and on terms to be determined at the time of offering, provided that the aggregate initial public offering price of all QUIDS (other than Corresponding QUIDS) and QUIPS issued pursuant to the Registration Statement of which this Prospectus forms a part shall not exceed $125,000,000. Certain specific terms of the QUIDS or QUIPS in respect of which this Prospectus is being delivered will be described in an accompanying Prospectus Supplement, including without limitation and where applicable and to the extent not set forth herein, (a) in the case of QUIDS, the specific designation, aggregate principal amount, denominations, maturity (including any extension thereof), interest payment dates, interest rate (which may be fixed or variable) or method of calculating interest, if any, applicable Extension Period or interest deferral terms, if any, place or places where principal, premium, if any, and interest, if any, will be payable, terms of redemption, if any, sinking fund provisions, if any, terms for conversion or exchange, if any, into other securities, initial offering or purchase price, methods of distribution and any other special terms, and (b) in the case of QUIPS, the identity of the Issuer, specific title, aggregate amount, stated liquidation preference, number of securities, Distribution rate or method of calculating such rate, applicable Extension Period or Distribution deferral terms, if any, Distribution dates, place or places where Distributions will be payable, any terms of redemption, exchange, initial offering or purchase price, methods of distribution and any other special terms. The Prospectus Supplement also will contain information, as applicable, about certain United States federal income tax consequences relating to the QUIDS and QUIPS. The QUIDS and QUIPS may be sold to or through underwriters, through dealers, remarketing firms or agents or directly to purchasers. See "Plan of Distribution". The names of any underwriters, dealers, remarketing firms or agents involved in the sale of QUIDS or QUIPS in respect of which this Prospectus is being delivered and any applicable fee, commission or discount arrangements with them will be set forth in a Prospectus Supplement. The Prospectus Supplement will state whether the QUIDS or QUIPS will be listed on any national securities exchange. If the QUIDS or QUIPS are not listed on any national securities exchange, there can be no assurance that there will be a liquid secondary market for the QUIDS or QUIPS. This Prospectus may not be used to consummate sales of QUIDS or QUIPS unless accompanied by a Prospectus Supplement. 2 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY NEVADA POWER, ANY OF THE ISSUERS OR ANY UNDERWRITER, DEALER OR AGENT. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF OR THEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF NEVADA POWER SINCE THE DATE HEREOF OR THEREOF. NEITHER THIS PROSPECTUS NOR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. AVAILABLE INFORMATION Nevada Power is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information filed by Nevada Power with the Commission pursuant to the informational requirements of the Exchange Act may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the following Regional Offices of the Commission: Suite 1400, 500 West Madison Street, Chicago, Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such material can be obtained at prescribed rates from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. The Commission maintains a Web Site that contains reports, proxy and information statements and other information regarding registrants, including Nevada Power, that file electronically with the Commission and that is located at http://www.sec.gov. Nevada Power's common stock is listed on the New York Stock Exchange (Symbol: "NVP") and the Pacific Stock Exchange. Reports, proxy statements and other information concerning Nevada Power may be inspected at the offices of such exchanges. Nevada Power and the Issuers have filed with the Commission a Registration Statement on Form S-3 (together with all amendments and exhibits thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the securities offered hereby. This Prospectus and the accompanying Prospectus Supplement omit, in accordance with the rules and regulations of the Commission, certain of the information contained in the Registration Statement. Reference is hereby made to the Registration Statement and the exhibits and the financial statements, notes and schedules filed as a part thereof or incorporated by reference therein for further information with respect to Nevada Power, the Issuers and the securities offered hereby. Statements contained herein concerning the provisions of any document are not necessarily complete and, in each instance, where a copy of such document has been filed as an exhibit to the Registration Statement or otherwise has been filed with the Commission, reference is made to the copy so filed. Each such statement is qualified in its entirety by such reference. No separate financial statements of either Issuer have been included herein. Nevada Power and the Issuers do not consider that such financial statements would be material to holders of the QUIPS because each Issuer is a newly formed special purpose entity, has no operating history or independent operations and is not engaged in and does not propose to engage in any activity other than holding as trust assets the Corresponding QUIDS of Nevada Power and issuing the QUIPS and Common Securities. See "The Issuers", "Description of QUIPS", "Description of Guarantees" and "Description of Corresponding QUIDS". 3 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE Nevada Power's Annual Report on Form 10-K for the fiscal year ended December 31, 1995 and Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1996, previously filed by Nevada Power with the Commission, are incorporated by reference in this Prospectus and shall be deemed to be a part hereof. Each document filed by Nevada Power with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of any offering of securities made by this Prospectus shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing such document. Any statement contained herein, or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of the Registration Statement and this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Registration Statement or this Prospectus. Nevada Power will provide without charge to any person to whom a copy of this Prospectus is delivered, upon written or oral request of such person, a copy of any and all of the documents that have been or may be incorporated by reference herein (other than exhibits to such documents which are not specifically incorporated by reference into such documents). Such requests should be directed by mail to: Richard C. Schmalz, Director, Treasury, Nevada Power Company, P.O. Box 230, Las Vegas, Nevada 89151 or by telephone (702) 367-5608. USE OF PROCEEDS Except as otherwise specified in the related Prospectus Supplement, the net proceeds from the sale of the QUIDS will be added to the general funds of Nevada Power and will be used for general corporate utility purposes, which may include the purchase or redemption of one or more series of its preferred stock, capital expenditures, the reduction of short-term borrowings and working capital. THE ISSUERS Each Issuer is a statutory business trust formed under Delaware law pursuant to (i) a trust agreement executed by Nevada Power, as sponsor of the Issuer, and the Delaware Trustee (as defined herein) of such Issuer and (ii) the filing of a certificate of trust with the Secretary of State of the State of Delaware. Each trust agreement will be amended and restated in its entirety (each, as so amended and restated, a "Trust Agreement") substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus forms a part. Each Trust Agreement will be qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Each Issuer exists for the exclusive purposes of (i) issuing and selling its QUIPS and Common Securities, (ii) using the proceeds from the sale of such QUIPS and Common Securities to acquire a corresponding series of Corresponding QUIDS issued by Nevada Power, (iii) receiving payments to be made with respect to the QUIDS and disbursing such payments in accordance with the terms of the Trust Agreements and (iv) engaging in only those other activities necessary, convenient or incidental thereto. Accordingly, the Corresponding QUIDS will be the sole assets of each Issuer, and payments under the Corresponding QUIDS and the Expense Agreement will be the sole revenue of each Issuer. 4 All of the Common Securities will be owned by Nevada Power. The Common Securities of an Issuer will rank PARI PASSU, and payments will be made thereon pro rata, with the QUIPS of such Issuer, except that upon the occurrence and continuance of an event of default under a Trust Agreement resulting from a Debenture Event of Default (as defined herein), the rights of Nevada Power as holder of the Common Securities to payment in respect of Distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the QUIPS of such Issuer. See "Description of QUIPS--Subordination of Common Securities." Nevada Power will acquire Common Securities in an aggregate liquidation amount equal to not less than 3% of the total capital of each Issuer. Unless otherwise specified in the applicable Prospectus Supplement, each Issuer has a term of approximately 55 years, but may terminate earlier as provided in the applicable Trust Agreement. Each Issuer's business and affairs are conducted by its trustees, which will be appointed by Nevada Power as holder of the Common Securities. Unless otherwise specified in the applicable Prospectus Supplement, the trustees shall be IBJ Schroder Bank & Trust Company ("IBJ Schroder"), as the Property Trustee (the "Property Trustee") and Delaware Trust Capital Management, Inc., as the Delaware Trustee (the "Delaware Trustee"), and two individual trustees (the "Administrative Trustees") who are employees or officers of or affiliated with Nevada Power (collectively, the "Issuer Trustees"). IBJ Schroder, as Property Trustee, will act as sole indenture trustee under each Trust Agreement for purposes of compliance with the Trust Indenture Act. IBJ Schroder will also act as trustee under the Guarantees and the Indenture (each as defined herein). See "Description of Guarantees" and "Description of QUIDS." The holder of the Common Securities, or the holders of a majority in liquidation preference of the QUIPS if any Debenture Event of Default has occurred and is continuing, will be entitled to appoint, remove or replace the Delaware Trustee or the Property Trustee. The holder of the Common Securities will be entitled to appoint, remove or replace the Administrative Trustees. The duties and obligations of each Issuer Trustee are governed by the applicable Trust Agreement. Nevada Power will pay all fees and expenses related to each Issuer and the offering of the QUIPS and will pay, directly or indirectly, all ongoing costs, expenses and liabilities of each Issuer. The principal executive office of each Issuer is 6226 West Sahara Avenue, Las Vegas, Nevada 89102, Attention: Secretary, and its telephone number is (702) 367-5000. DESCRIPTION OF QUIDS The QUIDS are to be issued in one or more series under a Junior Subordinated Indenture, as supplemented from time to time (as so supplemented, the "Indenture"), between Nevada Power and IBJ Schroder, as trustee (the "Debenture Trustee"). This summary of certain terms and provisions of the QUIDS and the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Indenture, the form of which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part, and to the Trust Indenture Act. Whenever particular defined terms of the Indenture (as supplemented or amended from time to time) are referred to herein or in a Prospectus Supplement, such defined terms are incorporated herein or therein by reference. GENERAL Each series of QUIDS will rank PARI PASSU with all other series of QUIDS, and will be unsecured and subordinate and junior in right of payment to the extent and in the manner set forth in the Indenture to all Senior Debt (as defined below) of Nevada Power. See "--Subordination." Unless otherwise specified in the applicable Prospectus Supplement, the Indenture does not limit the incurrence or issuance of other secured or unsecured debt, including Senior Debt, of Nevada Power, whether under the Indenture or any existing or other indenture that Nevada Power may enter into in the future or otherwise, including, without limitation, Nevada Power's Indenture of Mortgage and Deed of Trust dated October 1, 1953 entered into with Bankers Trust Company, together with supplemental indentures thereto heretofore or hereafter entered into. Furthermore, unless otherwise stated in the applicable Prospectus Supplement, there are no 5 provisions in the Indenture, any Guarantee or any Trust Agreement, or any other agreement, that afford holders of QUIDS or QUIPS protection in the event of a highly leveraged or similar transaction involving Nevada Power, whether or not involving a change in control of Nevada Power. See "--Subordination" and the Prospectus Supplement relating to any offering of securities. The QUIDS will be issuable in one or more series pursuant to an indenture supplemental to the Indenture or a resolution of Nevada Power's board of directors or a committee thereof. The applicable Prospectus Supplement or Prospectus Supplements will describe the following terms of the QUIDS: (1) the title of the QUIDS; (2) any limit upon the aggregate principal amount of the QUIDS; (3) the date or dates on which the principal of the QUIDS is payable or the method of determination thereof; (4) the rate or rates, if any, at which the QUIDS shall bear interest, the Interest Payment Dates on which any such interest shall be payable, the right, if any, of Nevada Power to defer or extend an Interest Payment Date, and the Regular Record Date for any interest payable on any Interest Payment Date or the method by which any of the foregoing shall be determined; (5) the place or places where, subject to the terms of the Indenture as described below under "Payment and Paying Agents", the principal of and premium, if any, and interest on the QUIDS will be payable and where, subject to the terms of the Indenture as described below under "Denominations; Registration of Transfer", the QUIDS may be presented for registration of transfer or exchange and the place or places where notices and demands to or upon Nevada Power in respect of the QUIDS and the Indentures may be made ("Place of Payment"); (6) any period or periods within or date or dates on which, the price or prices at which and the terms and conditions upon which QUIDS may be redeemed, in whole or in part, at the option of Nevada Power or a holder thereof; (7) the obligation or the right, if any, of Nevada Power or a holder thereof to redeem, purchase or repay the QUIDS and the period or periods within which, the price or prices at which, the currency or currencies (including currency unit or units) in which and the other terms and conditions upon which the QUIDS shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation; (8) the denominations in which any QUIDS shall be issuable if other than denominations of $25 and any integral multiple thereof; (9) if other than in U.S. Dollars, the currency or currencies (including currency unit or units) in which the principal of and premium, if any, and interest, if any, on the QUIDS shall be payable, or in which the QUIDS shall be denominated; (10) any additions, modifications or deletions in the Debenture Events of Default or covenants of Nevada Power specified in the Indenture with respect to the QUIDS; (11) if other than the principal amount thereof, the portion of the principal amount of QUIDS that shall be payable upon declaration of acceleration of the maturity thereof; (12) any additions or changes to the Indenture with respect to a series of QUIDS as shall be necessary to permit or facilitate the issuance of such series in bearer form, registrable or not registrable as to principal, and with or without interest coupons; (13) any index or indices used to determine the amount of payments of principal of and premium, if any, on the QUIDS and the manner in which such amounts will be determined; (14) the terms and conditions relating to the issuance of a temporary Global Security representing all of the QUIDS of such series and the exchange of such temporary Global Security for definitive QUIDS of such series; (15) subject to the terms described under "Global QUIDS," whether the QUIDS of the series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depositary for such Global Securities, which Depositary shall be a clearing agency registered under the Exchange Act; (16) the appointment of any Paying Agent or Agents; (17) the terms and conditions of any obligation or right of Nevada Power or a holder to convert or exchange the QUIDS into QUIPS or other securities; and (18) any other terms of the QUIDS not inconsistent with the provisions of the Indenture. QUIDS may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. Certain United States federal income tax consequences and special considerations applicable to any such QUIDS will be described in the applicable Prospectus Supplement. If the purchase price of any of the QUIDS is payable in one or more foreign currencies or currency units or if any QUIDS are denominated in one or more foreign currencies or currency units or if the 6 principal of, premium, if any, or interest, if any, on any QUIDS is payable in one or more foreign currencies or currency units, the restrictions, elections, certain United States federal income tax consequences, specific terms and other information with respect to such issue of QUIDS and such foreign currency or currency units will be set forth in the applicable Prospectus Supplement. If any index is used to determine the amount of payments of principal of, premium, if any, or interest on any series of QUIDS, special United States federal income tax, accounting and other considerations applicable thereto will be described in the applicable Prospectus Supplement. DENOMINATIONS; REGISTRATION OF TRANSFER Unless otherwise specified in the applicable Prospectus Supplement, the QUIDS will be issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof. QUIDS of any series will be exchangeable for other QUIDS of the same issue and series, of any authorized denominations, of a like aggregate principal amount, of the same original issue date and stated maturity and bearing the same interest rate. QUIDS may be presented for exchange as provided above, and may be presented for registration of transfer (with the form of transfer endorsed thereon, or a satisfactory written instrument of transfer, duly executed), at the office of the appropriate Securities Registrar or at the office of any transfer agent designated by Nevada Power for such purpose with respect to any series of QUIDS and referred to in the applicable Prospectus Supplement, without service charge and upon payment of any taxes and other governmental charges as described in the Indenture. Nevada Power will appoint the Debenture Trustee as Securities Registrar under the Indenture. If the applicable Prospectus Supplement refers to any transfer agents (in addition to the Securities Registrar) initially designated by Nevada Power with respect to any series of QUIDS, Nevada Power may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent acts, provided that Nevada Power maintains a transfer agent in each Place of Payment for such series. Nevada Power may at any time designate additional transfer agents with respect to any series of QUIDS. In the event of any redemption, neither Nevada Power nor the Debenture Trustee shall be required to (i) issue, register the transfer of or exchange QUIDS of any series during a period beginning at the opening of business 15 days before the day of selection for redemption of QUIDS of that series and ending at the close of business on the day of mailing of the relevant notice of redemption or (ii) transfer or exchange any QUIDS so selected for redemption, except, in the case of any QUIDS being redeemed in part, any portion thereof not to be redeemed. GLOBAL QUIDS The QUIDS of a series may be issued in whole or in part in the form of one or more Global QUIDS that will be deposited with, or on behalf of, a depositary (the "Depositary") identified in the Prospectus Supplement relating to such series. Global QUIDS may be issued only in fully registered form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for the individual QUIDS represented thereby, a Global QUIDS may not be transferred except as a whole by the Depositary for such Global QUIDS to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by the Depositary or any nominee to a successor Depositary or any nominee of such successor. The specific terms of the depositary arrangement with respect to a series of QUIDS will be described in the Prospectus Supplement relating to such series. Nevada Power anticipates that the following provisions will generally apply to depositary arrangements. Upon the issuance of a Global QUIDS and the deposit of such Global QUIDS with or on behalf of the Depositary, the Depositary for such Global QUIDS or its nominee will credit on its book-entry 7 registration and transfer system the respective principal amounts of the individual QUIDS represented by such Global QUIDS to the accounts of persons that have accounts with such Depositary ("Participants"). Such accounts shall be designated by the dealers, underwriters or agents with respect to such QUIDS or by Nevada Power if such QUIDS are offered and sold directly by Nevada Power. Ownership of beneficial interests in a Global QUIDS will be limited to Participants or persons that may hold interests through Participants. Ownership of beneficial interests in such Global QUIDS will be shown on, and the transfer of that ownership will be effected only through, records maintained by the applicable Depositary or its nominee (with respect to interests of Participants) and the records of Participants (with respect to interests of persons who hold through Participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a Global QUIDS. So long as the Depositary for a Global QUIDS, or its nominee, is the registered owner of such Global QUIDS, such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the QUIDS represented by such Global QUIDS for all purposes under the Indenture governing such QUIDS. Except as provided below, owners of beneficial interests in a Global QUIDS will not be entitled to have any of the individual QUIDS of the series represented by such Global QUIDS registered in their names, will not receive or be entitled to receive physical delivery of any such QUIDS of such series in definitive form and will not be considered the owners or holders thereof under the Indenture. Payments of principal of and premium, if any, and interest on individual QUIDS represented by a Global QUIDS registered in the name of a Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of the Global QUIDS representing such QUIDS. None of Nevada Power, the Debenture Trustee, any Paying Agent or the Securities Registrar for such QUIDS will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of the Global QUIDS representing such QUIDS or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Nevada Power expects that the Depositary for a series of QUIDS or its nominee, upon receipt of any payment of principal, premium, if any, or interest in respect of a permanent Global QUIDS representing any of such QUIDS, immediately will credit Participants' accounts with payments in amounts proportionate to their respective beneficial interest in the principal amount of such Global QUIDS representing such QUIDS as shown on the records of such Depositary or its nominee. Nevada Power also expects that payments by Participants to owners of beneficial interests in such Global QUIDS held through such Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name." Such payments will be the responsibility of such Participants. Unless otherwise specified in the applicable Prospectus Supplement, if a Depositary for a series of QUIDS is at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by Nevada Power within 90 days, Nevada Power will issue individual QUIDS of such series in exchange for the Global QUIDS representing such series of QUIDS. In addition, Nevada Power may at any time and in its sole discretion, subject to any limitations described in the Prospectus Supplement relating to such QUIDS, determine not to have any QUIDS of such series represented by one or more Global QUIDS and, in such event, will issue individual QUIDS of such series in exchange for the Global QUIDS representing such series of QUIDS. Further, if Nevada Power so specifies with respect to the QUIDS of a series, an owner of a beneficial interest in a Global QUIDS representing QUIDS of such series may, on terms acceptable to Nevada Power, the Debenture Trustee and the Depositary for such Global QUIDS, receive individual QUIDS of such series in exchange for such beneficial interests, subject to any limitations described in the Prospectus Supplement relating to such QUIDS. In any such instance, an owner of a beneficial interest in a Global QUIDS will be entitled to physical delivery of individual QUIDS of the series represented by such Global QUIDS equal in principal amount to such beneficial interest and to have such QUIDS registered in its name. Individual QUIDS of such series so issued will be 8 issued in denominations, unless otherwise specified by Nevada Power, of $25 and integral multiples thereof. PAYMENT AND PAYING AGENTS Unless otherwise indicated in the applicable Prospectus Supplement, payment of principal of and premium, if any, and any interest on QUIDS will be made at the office of the Debenture Trustee in New York, New York or at the office of such Paying Agent or Paying Agents as Nevada Power may designate from time to time in the applicable Prospectus Supplement, except that at the option of Nevada Power payment of any interest may be made (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Securities Register or (ii) by transfer to an account maintained by the Person entitled thereto as specified in the Securities Register, provided that proper transfer instructions have been received by the Regular Record Date. Unless otherwise indicated in the applicable Prospectus Supplement, payment of any interest on QUIDS will be made to the Person in whose name such QUIDS is registered at the close of business on the Regular Record Date for such interest, except in the case of Defaulted Interest. Nevada Power may at any time designate additional Paying Agents or rescind the designation of any Paying Agent; however Nevada Power will at all times be required to maintain a Paying Agent in each Place of Payment for each series of QUIDS. Any moneys deposited with the Debenture Trustee or any Paying Agent, or then held by Nevada Power in trust, for the payment of the principal of and premium, if any, or interest on any QUIDS and remaining unclaimed for two years after such principal and premium, if any, or interest has become due and payable shall, at the request of Nevada Power, be repaid to Nevada Power and the holder of such QUIDS shall thereafter look, as a general unsecured creditor, only to Nevada Power for payment thereof. REDEMPTION Unless otherwise indicated in the applicable Prospectus Supplement, QUIDS will not be subject to any sinking fund. Unless otherwise indicated in the applicable Prospectus Supplement, Nevada Power may, at its option, redeem the QUIDS of any series in whole at any time or in part from time to time. QUIDS in denominations larger than $25 may be redeemed in part but only in integral multiples of $25. Except as otherwise specified in the applicable Prospectus Supplement, the redemption price for any QUIDS so redeemed shall equal any accrued and unpaid interest thereon to the redemption date, plus the principal amount thereof. Except as otherwise specified in the applicable Prospectus Supplement, if a Special Event (as defined under "Description of QUIPS--Redemption") in respect of a series of QUIDS has occurred and is continuing, Nevada Power may, at its option, redeem such series of QUIDS in whole (but not in part) at any time within 90 days of the occurrence of such Special Event, at a redemption price equal to 100% of the principal amount of such QUIDS then outstanding plus accrued and unpaid interest to the date fixed for redemption. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of QUIDS to be redeemed at its registered address. Unless Nevada Power defaults in payment of the redemption price, on and after the redemption date interest ceases to accrue on such QUIDS or portions thereof called for redemption. OPTION TO EXTEND INTEREST PAYMENT DATE If provided in the applicable Prospectus Supplement, Nevada Power shall have the right at any time and from time to time during the term of any series of QUIDS to defer payment of interest for such number of consecutive interest payment periods as may be specified in the applicable Prospectus 9 Supplement (each, an "Extension Period"), subject to the terms, conditions and covenants, if any, specified in such Prospectus Supplement, provided that such Extension Period may not extend beyond the Maturity Date of such series of QUIDS. Certain United States federal income tax consequences and special considerations applicable to any such QUIDS will be described in the applicable Prospectus Supplement. During such Extension Period, Nevada Power may not, and may not permit any subsidiary of Nevada Power to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of Nevada Power's capital stock or (ii) make any payment of principal of, or interest or premium, if any, on or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks PARI PASSU with or junior in right of payment to the QUIDS or make any guarantee payments with respect to any guarantee by Nevada Power of any indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to the QUIDS (other than (a) dividends or distributions in Common Stock of Nevada Power, (b) redemption or purchases of any rights pursuant to Nevada Power's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under Nevada Power's Stock Purchase and Dividend Reinvestment Plan and any of Nevada Power's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by Nevada Power or any of its subsidiaries). MODIFICATION OF INDENTURE From time to time Nevada Power and the Debenture Trustee may, without the consent of or notice to the holders of any series of QUIDS, amend, waive or supplement the Indenture for specified purposes, including, among other things, curing ambiguities, defects or inconsistencies (provided that any such action does not materially adversely affect the interest of the holders of any series of QUIDS or, in the case of Corresponding QUIDS, the holders of the corresponding series of QUIPS so long as they remain outstanding) and qualifying, or maintaining the qualification of, the Indenture under the Trust Indenture Act. The Indenture contains provisions permitting Nevada Power and the Debenture Trustee, with the consent of the holders of a majority in principal amount of QUIDS or each series affected, to modify the Indenture in a manner affecting the rights of the holders of such series; provided that no such modification may, among other things, without the consent of the holder of each outstanding QUIDS so affected, (i) change the stated maturity of any series of QUIDS, or reduce the principal amount thereof, reduce the rate of interest or premium, or extend the time of payment of interest thereon (except such change or extension as is contemplated hereby), (ii) reduce the percentage of principal amount of QUIDS of any series, the holders of which are required to consent to any such modification of the Indenture, (iii) modify any of the provisions described in this sentence or the provisions of the Indenture regarding waivers of past defaults and waivers of covenants or conditions therein or (iv) modify any of the provisions described under "--Subordination" in a manner adverse to the holders of outstanding QUIDS, provided that, in the case of Corresponding QUIDS, so long as any of the related series of QUIPS remain outstanding, no such modification may be made that adversely affects the holders of such QUIPS in any material respect, and no termination of the Indenture may occur, and no waiver of any Debenture Event of Default or compliance with any covenant under the Indenture may be effective, without the prior consent of the holders of a majority of the aggregate liquidation preference of such QUIPS unless and until the principal of the Corresponding QUIDS and all accrued and unpaid interest thereon have been paid in full and certain other conditions are satisfied. 10 In addition, Nevada Power and the Debenture Trustee may execute, without the consent of or notice to any holder of QUIDS, any supplemental indenture for the purpose of creating any new series of QUIDS. DEBENTURE EVENTS OF DEFAULT The Indenture provides that any one or more of the following described events with respect to a series of QUIDS that has occurred and is continuing constitutes a "Debenture Event of Default" with respect to such series of QUIDS: (i) failure for 30 days to pay any interest on such series of QUIDS, when due (subject to the deferral of any due date in the case of an Extension Period); or (ii) failure to pay any principal of, or premium, if any, on such series of QUIDS when due whether at maturity, upon redemption, by declaration of acceleration or otherwise; or (iii) failure to observe or perform, or a breach of, in any material respect certain other covenants or warranties contained in the Indenture for 90 days after written notice to Nevada Power from the Debenture Trustee or to Nevada Power and the Debenture Trustee from the holders of at least 25% in aggregate outstanding principal amount of such series of QUIDS; or (iv) certain events of bankruptcy, insolvency or reorganization of Nevada Power. The holders of a majority in aggregate outstanding principal amount of such series of QUIDS have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate outstanding principal amount of such series of QUIDS may declare the principal due and payable immediately upon a Debenture Event of Default, and, in the case of Corresponding QUIDS, should the Debenture Trustee or such holders of such Corresponding QUIDS fail to make such declaration, the holders of at least 25% in aggregate liquidation preference of the related series of QUIPS shall have such right. The holders of a majority in aggregate outstanding principal amount of such series of QUIDS may annul such declaration and waive the default if the default (other than the non-payment of the principal of such series of QUIDS which has become due solely by such acceleration) has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Debenture Trustee and, in the case of Corresponding QUIDS, should the holders of such Corresponding QUIDS fail to annul such declaration and waive such default, the holders of a majority in aggregate liquidation preference of the related series of QUIPS shall have such right. The holders of a majority in aggregate outstanding principal amount of the QUIDS affected thereby may, on behalf of the holders of all the QUIDS, waive any past default, except a default in the payment of principal or interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Debenture Trustee) or a default in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding QUIDS and, in the case of Corresponding QUIDS, should the holders of such Corresponding QUIDS fail to annul such declaration and waive such default, the holders of a majority in aggregate liquidation preference of the related series of QUIPS shall have such right. Nevada Power is required to file annually with the Debenture Trustee a certificate as to whether or not Nevada Power is in compliance with all the conditions and covenants applicable to it under the Indenture. In case a Debenture Event of Default has occurred and is continuing as to a series of Corresponding QUIDS, the Property Trustee will have the right to declare the principal of and the interest on such Corresponding QUIDS and any other amounts payable under the Indenture, to be forthwith due and payable and to enforce its other rights as a creditor with respect to such Corresponding QUIDS. 11 ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF QUIPS If a Debenture Event of Default has occurred and is continuing and such event is attributable to the failure of Nevada Power to pay interest or principal on the related QUIDS on the date such interest or principal is otherwise payable, a holder of QUIPS may institute a Direct Action (as defined below under "Description of QUIPS--Enforcement of Certain Rights by Holders of QUIPS") for payment after the respective due date specified in the related QUIDS. Nevada Power may not amend the Indenture to remove the foregoing right to bring a Direct Action without the prior written consent of the holders of all of the QUIPS. Notwithstanding any payment made to such holder of QUIPS by Nevada Power in connection with a Direct Action, Nevada Power shall remain obligated to pay the principal of or interest on the related QUIDS held by the Issuer or the Property Trustee and Nevada Power shall be subrogated to the rights of the holder of such QUIPS with respect to payments on the QUIPS to the extent of any payments made by Nevada Power to such holder in any Direct Action. The holders of QUIPS will not be able to exercise directly any other remedy available to the holders of the related QUIDS. The holders of the QUIPS would not be able to exercise directly any remedies other than those set forth in the preceding paragraph available to the holders of the QUIDS unless the Property Trustee or the Debenture Trustee, acting for the benefit of the Property Trustee, fails to do so for 60 days. In such event, the holders of at least 25% in aggregate liquidation preference of the outstanding QUIPS would have such right to institute proceedings. CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS The Indenture provides that Nevada Power shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and no Person shall consolidate with or merge into Nevada Power or convey, transfer or lease its properties and assets substantially as an entirety to Nevada Power, unless (i) in case Nevada Power consolidates with or merges into another Person or conveys, transfers or leases its properties and assets substantially as an entirety to any Person, the successor Person is organized under the laws of the United States or any state or the District of Columbia, and such successor Person expressly assumes Nevada Power's obligations on the QUIDS issued under the Indenture; (ii) immediately after giving effect thereto, no Debenture Event of Default, and no event which, after notice or lapse of time or both, would become a Debenture Event of Default, shall have happened and be continuing; (iii) in the case of Corresponding QUIDS, such transaction is permitted under the related Trust Agreement or Guarantee and does not give rise to any breach or violation of the related Trust Agreement and Guarantees; and (iv) certain other conditions as prescribed in the Indenture are met. The general provisions of the Indenture do not afford holders of the QUIDS protection in the event of a highly leveraged or other transaction involving Nevada Power that may adversely affect holders of the QUIDS. SATISFACTION AND DISCHARGE The Indenture provides that when, among other things, all QUIDS not previously delivered to the Debenture Trustee for cancellation (i) have become due and payable or (ii) will become due and payable at their Stated Maturity within one year, and Nevada Power deposits or causes to be deposited with the Debenture Trustee funds or Government Obligations, in trust, for the purpose and in an amount in the currency or currencies in which the QUIDS are payable sufficient to pay and discharge the entire indebtedness on the QUIDS not previously delivered to the Debenture Trustee for cancellation, for the principal and premium, if any, and interest to the date of the deposit or applicable redemption date or to the Stated Maturity, as the case may be, then the Indenture will cease to be of further effect (except as to Nevada Power's obligations to pay all other sums due pursuant to the Indenture and to provide the 12 officers' certificates and opinions of counsel described therein), and Nevada Power will be deemed to have satisfied and discharged the Indenture. CONVERSION OR EXCHANGE Unless otherwise indicated in the applicable Prospectus Supplement, the QUIDS of any series may be convertible or exchangeable into QUIPS or other securities. The specific terms on which QUIDS of any series may be so converted or exchanged will be set forth in the applicable Prospectus Supplement. Such terms may include provisions for conversion or exchange, either mandatory, at the option of the holder, or at the option of Nevada Power, in which case the number of shares of QUIPS or other securities to be received by the Holders of QUIDS would be calculated as of a time and in the manner stated in the applicable Prospectus Supplement. SUBORDINATION Any QUIDS issued under the Indenture, by the express terms thereof, will be subordinate and junior in right of payment to all Senior Debt to the extent provided in the Indenture. Upon any payment or distribution of assets to creditors upon any liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors, marshaling of assets or any bankruptcy, insolvency, debt restructuring or similar proceedings in connection with any insolvency or bankruptcy proceeding of Nevada Power, the holders of Senior Debt will first be entitled to receive payment in full of principal of and premium, if any, and interest, if any, on such Senior Debt before the holders of QUIDS or, in the case of Corresponding QUIDS, the Property Trustee on behalf of the holders, will be entitled to receive or retain any payment in respect of the principal of and premium, if any, or interest, if any, on the QUIDS. In the event of the acceleration of the maturity of any QUIDS, the holders of all Senior Debt outstanding at the time of such acceleration will first be entitled to receive payment in full of all amounts due thereon (including any amounts due upon acceleration) before the holders of QUIDS will be entitled to receive or retain any payment in respect of the principal of or premium, if any, or interest, if any, on the QUIDS. No payments on account of principal (or premium, if any) or interest, if any, in respect of the QUIDS may be made if there has occurred and is continuing a default in any payment with respect to Senior Debt, or an event of default with respect to any Senior Debt resulting in the acceleration of the maturity thereof, or if any judicial proceeding shall be pending with respect to any such default. "Debt" means with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent, (i) every obligation of such Person for money borrowed; (ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; (iii) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (iv) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business); (v) every capital lease obligation of such Person; and (vi) every obligation of the type referred to in clauses (i) through (v) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable for, directly or indirectly, as obligor or otherwise. "Senior Debt" means the principal of and premium and interest, if any (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Nevada Power whether or not such claim for post-petition interest is allowed in such proceeding), on Debt, whether incurred on or prior to the date of the Indenture or thereafter incurred, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are not superior in right of payment to the QUIDS or to other Debt which is PARI PASSU with, or subordinated to, the 13 QUIDS; provided, however, that Senior Debt shall not be deemed to include (i) any Debt of Nevada Power which when incurred and without respect to any election under Section 1111 (b) of the Bankruptcy Code, was without recourse to Nevada Power, (ii) any Debt of Nevada Power to any of its subsidiaries, (iii) Debt to any employee of Nevada Power, (iv) any liability for taxes, (v) Debt or monetary obligations to trade creditors created or assumed by Nevada Power or any of its subsidiaries in the ordinary course of business in connection with the obtaining of goods, materials or services and (vi) the QUIDS. The Indenture places no limitation on the amount of additional Senior Debt, parity obligations or other indebtedness that may be incurred by Nevada Power. Furthermore, there are no provisions in the Indenture that afford holders of any QUIDS protection in the event of a highly leveraged or similar transaction involving Nevada Power, whether or not involving a change in control of Nevada Power. The electric utility business is capital intensive. Nevada Power has substantial amounts of outstanding indebtedness constituting Senior Debt and anticipates that it will in the future incur substantial amounts of additional indebtedness constituting Senior Debt. The Indenture provides that the foregoing subordination provisions, insofar as they relate to any particular issue of QUIDS, may be changed prior to such issuance. Any such change would be described in the applicable Prospectus Supplement. GOVERNING LAW The Indenture and the QUIDS will be governed by and construed in accordance with the laws of the State of New York. INFORMATION CONCERNING THE DEBENTURE TRUSTEE The Debenture Trustee shall have and be subject to all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of QUIDS, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. The Debenture Trustee is not required to expend or risk its own funds or otherwise incur personal financial liability in the performance of its duties if the Debenture Trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it. 14 DESCRIPTION OF QUIPS Pursuant to the terms of the Trust Agreement for each Issuer, the Issuer Trustees on behalf of such Issuer will issue the QUIPS and the Common Securities. The QUIPS of a particular issue will represent preferred undivided beneficial interests in the assets of the related Issuer and the holders thereof will be entitled to a preference in certain circumstances with respect to Distributions and amounts payable on redemption or liquidation over the Common Securities of such Issuer, as well as other benefits as described in the corresponding Trust Agreement. This summary of certain provisions of the QUIPS and each Trust Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of each Trust Agreement, including the definitions therein of certain terms, and the Trust Indenture Act. Wherever particular defined terms of a Trust Agreement (as supplemented or amended from time to time) are referred to herein or in a Prospectus Supplement, such defined terms are incorporated herein or therein by reference. The form of each Trust Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. Each of the Issuers is a legally separate entity and the assets of one are not available to satisfy the obligations of any of the others. GENERAL The QUIPS of an Issuer will rank PARI PASSU, and payments will be made thereon pro rata, with the Common Securities of that Issuer except as described under "--Subordination of Common Securities." Legal title to the Corresponding QUIDS will be held by the Property Trustee in trust for the benefit of the holders of the related QUIPS and Common Securities. Each Guarantee Agreement executed by Nevada Power for the benefit of the holders of an Issuer's QUIPS (each, the "Guarantee") will be a guarantee on a subordinated basis with respect to the related QUIPS but will not guarantee payment of Distributions or amounts payable on redemption or liquidation of such QUIPS when the related Issuer does not have funds on hand available to make such payments. See "Description of Guarantees." DISTRIBUTIONS Each Issuer's QUIPS represent preferred undivided beneficial interests in the assets of such Issuer, and the Distributions on each QUIPS will be payable at a rate specified in the Prospectus Supplement for such QUIPS. The amount of Distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months unless otherwise specified in the applicable Prospectus Supplement. Distributions to which holders of QUIPS are entitled will accumulate additional Distributions at the rate per annum if and as specified in the applicable Prospectus Supplement. The term "Distributions" as used herein includes any such additional Distributions unless otherwise stated. Distributions on the QUIPS will be cumulative, will accrue from the date of original issuance and will be payable on such dates as specified in the applicable Prospectus Supplement. In the event that any date on which Distributions are payable on the QUIPS is not a Business Day (as defined below), payment of the Distribution payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such Distribution shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date (each date on which Distributions are payable in accordance with the foregoing, a "Distribution Date"). A "Business Day" means any day other than a Saturday or a Sunday, or a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed or a day on which the corporate trust office of the Property Trustee or the Debenture Trustee (as defined herein) is closed for business. If provided in the applicable Prospectus Supplement, Nevada Power has the right under the Indenture, pursuant to which it will issue the Corresponding QUIDS, to defer the payment of interest at any time or from time to time on any series of the Corresponding QUIDS for a period which will be specified 15 in such Prospectus Supplement relating to such series (each, an "Extension Period"), provided that no Extension Period may extend beyond the Maturity Date of such series of QUIDS. As a consequence of any such extension, Distributions on the corresponding QUIPS would be deferred (but the QUIPS would continue to accumulate additional Distributions thereon at the rate per annum set forth in the Prospectus Supplement for such QUIPS) by the Issuer of such QUIPS during any such Extension Period. During such Extension Period Nevada Power may not, and may not permit any subsidiary of Nevada Power to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of Nevada Power's capital stock or (ii) make any payment of principal of, or interest or premium, if any, on or repay, repurchase or redeem, or make any sinking fund payment with respect, to any indebtedness of Nevada Power that ranks PARI PASSU with or junior in right of payment to the Corresponding QUIDS or make any guarantee payments with respect to any guarantee by Nevada Power of any indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to the Series A QUIDS (other than (a) dividends or distributions in Common Stock of Nevada Power, (b) redemption or purchases of any rights pursuant to Nevada Power's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under Nevada Power's Stock Purchase and Dividend Reinvestment Plan and any of Nevada Power's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by Nevada Power or any of its subsidiaries). The revenue of each Issuer available for distribution to holders of its QUIPS will be limited to payments under the Corresponding QUIDS in which the Issuer will invest the proceeds from the issuance and sale of its QUIPS and its Common Securities. See "Description of Corresponding QUIDS." If Nevada Power does not make interest payments on such Corresponding QUIDS, the Property Trustee will not have funds available to pay Distributions on the related QUIPS. The payment of Distributions (if and to the extent the Issuer has funds legally available for the payment of such Distributions and cash sufficient to make such payments) is guaranteed by Nevada Power on a limited basis as set forth herein under "Description of Guarantees." Distributions on the QUIPS will be payable to the holders thereof as they appear on the register of such Issuer on the relevant record dates, which, as long as the QUIPS remain in book-entry form, will be one Business Day prior to the relevant Distribution Date. Subject to any applicable laws and regulations and the provisions of the applicable Trust Agreement, each such payment will be made as described under "--Book-Entry Issuance." In the event any QUIPS are not in book-entry form, the relevant record date for such QUIPS shall be the date which is 15 days prior to the relevant Distribution Date. REDEMPTION MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in part, of any Corresponding QUIDS, whether at maturity or upon earlier redemption as provided in the Indenture, the proceeds from such repayment or redemption shall be applied by the Property Trustee to redeem a Like Amount (as defined below) of the related QUIPS and the Common Securities, upon not less than 30 or more than 60 days notice, at a redemption price (the "Redemption Price"), with respect to such QUIPS and the Common Securities, equal to the aggregate liquidation preference of such QUIPS plus accumulated and unpaid Distributions thereon to the date of redemption (the "Redemption Date") and the related amount of the premium, if any, paid by Nevada Power upon the concurrent redemption of such Corresponding QUIDS. See "Description of Corresponding QUIDS--Optional Redemption." If less than all of any series of Corresponding QUIDS are to be repaid or redeemed on a Redemption Date, then the proceeds from such repayment or redemption shall be allocated to the redemption pro rata of the related QUIPS and the Common Securities. The amount of premium, if any, paid by Nevada Power upon the redemption of all or 16 any part of any series of any Corresponding QUIDS to be repaid or redeemed on a Redemption Date shall be allocated to the redemption pro rata of the related QUIPS and the Common Securities. Nevada Power will have the right to redeem any series of Corresponding QUIDS (i) in whole at any time or in part from time to time, subject to the conditions described under "Description of Corresponding QUIDS--Optional Redemption," (ii) at any time, in whole (but not in part), upon the occurrence of a Tax Event or an Investment Company Event (each as defined below, a "Special Event") and subject to the further conditions described under "Description of Corresponding QUIDS--Optional Redemption," or (iii) as may be otherwise specified in the applicable Prospectus Supplement. SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF CORRESPONDING QUIDS. If a Special Event in respect of a series of QUIPS and Common Securities has occurred and is continuing, Nevada Power has the right to redeem the Corresponding QUIDS in whole (but not in part) and thereby cause a mandatory redemption of such QUIPS and Common Securities in whole (but not in part) at the Redemption Price within 90 days following the occurrence of such Special Event. At any time, Nevada Power has the right to terminate the related Issuer and, after satisfaction of liabilities to creditors of such Issuer as provided by applicable law, cause such Corresponding QUIDS to be distributed to the holders of such QUIPS and Common Securities in liquidation of the Issuer. If Nevada Power does not elect either option described above, the applicable series of QUIPS will remain outstanding and, in the event a Tax Event has occurred and is continuing, Additional Sums (as defined below) may be payable on the Corresponding QUIDS. EXTENSION OF MATURITY OF CORRESPONDING QUIDS. If provided in the applicable Prospectus Supplement, Nevada Power shall have the right to extend or shorten the maturity of any series of Corresponding QUIDS at the time that Nevada Power exercises its right to elect to liquidate the related Issuer and cause such Corresponding QUIDS to be distributed to the holders of such QUIPS and Common Securities in liquidation of the Issuer, provided that it can extend the maturity only if certain conditions specified in the applicable Prospectus Supplement are met at the time such election is made and at the time of such extension. "Additional Sums" means the additional amounts as may be necessary in order that the amount of Distributions then due and payable by an Issuer on the outstanding QUIPS and Common Securities of the Issuer shall not be reduced as a result of any additional taxes, duties and other governmental charges to which the Issuer has become subject as a result of a Tax Event. "Investment Company Event" means the receipt by the applicable Issuer of an opinion of counsel, rendered by a law firm having a recognized national tax and securities practice, to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), the applicable Issuer is or will be considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), which Change in 1940 Act Law becomes effective on or after the date of original issuance of the series of QUIPS issued by the applicable Issuer. "Like Amount" means (i) with respect to a redemption of any series of QUIPS, QUIPS of such series and the Common Securities having a Liquidation Amount (as defined below) equal to that portion of the principal amount of Corresponding QUIDS to be contemporaneously redeemed in accordance with the Indenture allocated 3% to the Common Securities and 97% to the QUIPS of such series and the proceeds of which will be used to pay the Redemption Price of such QUIPS and to redeem such Common Securities, and (ii) with respect to a distribution of Corresponding QUIDS to holders of any series of QUIPS and the Common Securities in connection with a dissolution or liquidation of the related Issuer, Corresponding QUIDS having a principal amount equal to the Liquidation Amount of the QUIPS and the Common Securities of the holder to whom such Corresponding QUIDS are distributed. "Liquidation Amount" means the stated amount of $25 per QUIPS and Common Security. "Tax Event" means the receipt by the applicable Issuer of an opinion of counsel, rendered by a law firm having a national tax and securities practice, to the effect that, as a result of any amendment to, or 17 change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of issuance of the QUIPS under the related Trust Agreement, there is more than an insubstantial risk that (i) the applicable Issuer is, or will be within 90 days of the date of such opinion, subject to United States federal income tax with respect to income received or accrued on the Corresponding QUIDS, (ii) interest payable by Nevada Power on the Corresponding QUIDS is not, or within 90 days of the date of such opinion, will not be, deductible by Nevada Power, in whole or in part, for United States federal income tax purposes, or (iii) the applicable Issuer is, or will be within 90 days of the date of such opinion, subject to more than a DE MINIMIS amount of other taxes, duties or other governmental charges. In certain circumstances involving the termination of an Issuer, Corresponding QUIDS may be distributed in exchange for QUIPS. After the liquidation date fixed for any distribution of Corresponding QUIDS for any series of QUIPS (i) such series of QUIPS will no longer be deemed to be outstanding, (ii) The Depository Trust Company ("DTC") or its nominee, as the record holder of such series of QUIPS, will receive a registered global certificate or certificates representing the Corresponding QUIDS to be delivered upon such distribution and (iii) any certificates representing such series of QUIPS not held by DTC or its nominee will be deemed to represent the Corresponding QUIDS having a principal amount equal to the stated liquidation preference of such series of QUIPS, and bearing accrued and unpaid interest in an amount equal to the accrued and unpaid Distributions on such series of QUIPS until such certificates are presented to the Administrative Trustees or their agent for transfer or reissuance. There can be no assurance as to the market prices for the QUIPS or the Corresponding QUIDS that may be distributed in exchange for QUIPS if a dissolution and liquidation of an Issuer were to occur. Accordingly, the QUIPS that an investor may purchase, or the Corresponding QUIDS that the investor may receive on dissolution and liquidation of an Issuer, may trade at a discount to the price that the investor paid to purchase the QUIPS. REDEMPTION PROCEDURES QUIPS redeemed on each Redemption Date shall be redeemed at the Redemption Price with the applicable proceeds from the contemporaneous redemption of the Corresponding QUIDS. Redemptions of the QUIPS shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the related Issuer has funds on hand available for the payment of such Redemption Price. See "--Subordination of Common Securities." If an Issuer gives a notice of redemption in respect of its QUIPS, then, by 2:00 p.m., New York City time, on the Redemption Date, to the extent funds are available, the Property Trustee will deposit irrevocably with DTC funds sufficient to pay the applicable Redemption Price and will give DTC irrevocable instructions and authority to pay the Redemption Price to the beneficial owners of the QUIPS in book entry only form. See "--Book-Entry Issuance." If such QUIPS are no longer in book-entry form, the Issuer, to the extent funds are available, will irrevocably deposit with the paying agent for such QUIPS funds sufficient to pay the applicable Redemption Price and will give such paying agent irrevocable instructions and authority to pay the Redemption Price to the holders thereof upon surrender of their certificates evidencing such QUIPS. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any QUIPS called for redemption shall be payable to the holders of such QUIPS on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of the holders of such QUIPS so called for redemption will cease, except the right of the holders of such QUIPS to receive the Redemption Price, but without interest on such Redemption Price, and such QUIPS will cease to be outstanding. In the event that any date fixed for redemption of QUIPS is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such 18 Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day. In the event that payment of the Redemption Price in respect of QUIPS called for redemption is improperly withheld or refused and not paid either by the Issuer or by Nevada Power pursuant to the Guarantee as described under "Description of Guarantees," Distributions on such QUIPS will continue to accrue at the then applicable rate, from the Redemption Date originally established by the Issuer for such QUIPS to the date such Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price. Subject to applicable law (including, without limitation, United States federal securities law), Nevada Power or its subsidiaries may at any time and from time to time purchase outstanding QUIPS by tender, in the open market or by private agreement. Payment of the Redemption Price on the QUIPS and any distribution of Corresponding QUIDS to holders of QUIPS shall be made to the applicable record holders thereof as they appear on the register for such QUIPS on the relevant record date, which shall be one Business Day prior to the relevant Redemption Date or liquidation date, as applicable; provided, however, that in the event that any QUIPS are not in book-entry form, the relevant record date for such QUIPS shall be the date which is 15 days prior to the Redemption Date or liquidation date, as applicable. If less than all of the QUIPS and Common Securities issued by an Issuer are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of such QUIPS and Common Securities to be redeemed shall be allocated pro rata among the QUIPS and the Common Securities. The particular QUIPS to be redeemed shall be selected on a pro rata basis not more than 75 days prior to the Redemption Date by the Property Trustee from the outstanding QUIPS not previously called for redemption, by such method as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $25 or an integral multiple of $25 in excess thereof) of the liquidation preference of QUIPS of a denomination larger than $25. The Property Trustee shall promptly notify the trust registrar in writing of the QUIPS selected for redemption and, in the case of any QUIPS selected for partial redemption, the liquidation preference thereof to be redeemed. For all purposes of each Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of QUIPS shall relate, in the case of any QUIPS redeemed or to be redeemed only in part, to the portion of the aggregate liquidation preference of QUIPS which has been or is to be redeemed. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of QUIDS to be redeemed at its registered address. Unless Nevada Power defaults in payment of the Redemption Price, on and after the Redemption Date interest will cease to accrue on such QUIDS or portions thereof called for redemption. SUBORDINATION OF COMMON SECURITIES Payment of Distributions on, and the Redemption Price of, each Issuer's QUIPS and Common Securities, as applicable, shall be made pro rata based on the Liquidation Amount of such QUIPS and Common Securities; provided, however, that if on any Distribution Date or Redemption Date a Debenture Event of Default shall have occurred and be continuing, no payment of any Distribution on, or Redemption Price of, any of the Issuer's Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions on all of the Issuer's outstanding QUIPS for all Distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all of the Issuer's outstanding QUIPS then called for redemption, shall have been made or provided for, and all funds available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions on, or Redemption Price of, the Issuer's QUIPS then due and payable. 19 In the case of any Event of Default under the Trust Agreement resulting from a Debenture Event of Default, Nevada Power as holder of such Issuer's Common Securities will be deemed to have waived any right to act with respect to any such Event of Default under the applicable Trust Agreement until the effect of all such Events of Default with respect to the Issuer's QUIPS have been cured, waived or otherwise eliminated. Until any such Events of Default under the applicable Trust Agreement with respect to the QUIPS have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the holders of such QUIPS and not on behalf of Nevada Power as holder of the Issuer's Common Securities, and only the holders of such QUIPS will have the right to direct the Property Trustee to act on their behalf. LIQUIDATION DISTRIBUTION UPON TERMINATION Pursuant to each Trust Agreement, each Issuer shall automatically terminate upon expiration of its term and shall terminate on the first to occur of: (i) certain events of bankruptcy, dissolution or liquidation of Nevada Power; (ii) the distribution of a Like Amount of the Corresponding QUIDS to the holders of its QUIPS and Common Securities, if Nevada Power, as Depositor, has given written direction to the Property Trustee to terminate such Issuer (which direction is optional and wholly within the discretion of Nevada Power, as Depositor); (iii) the redemption of all of the Issuer's QUIPS following a redemption of all the Corresponding QUIDS as described under "Description of QUIPS-- Redemption--Mandatory Redemption" and "--Special Event Redemption or Distribution of Corresponding QUIDS;" and (iv) the entry by a court of competent jurisdiction of an order for the dissolution of the Issuer. Upon the expiration of the Issuer's term or an early termination as described in clause (i), (ii) or (iv) above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously as the Issuer Trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of such Issuer as provided by applicable law, to the holders of such QUIPS and Common Securities a Like Amount of the Corresponding QUIDS, unless such distribution is determined by the Property Trustee not to be practical, in which event such holders will be entitled to receive out of the assets of the Issuer available for distribution to holders, after satisfaction of liabilities to creditors of such Issuer as provided by applicable law, an amount equal to, in the case of holders of QUIPS, the aggregate of the liquidation preference plus accrued and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If such Liquidation Distribution can be paid only in part because such Issuer has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by such Issuer on its QUIPS shall be paid on a pro rata basis. The holder of such Issuer's Common Securities will be entitled to receive distributions upon any such liquidation pro rata with the holders of its QUIPS, except that if a Debenture Event of Default has occurred and is continuing, the QUIPS shall have a priority over the Common Securities. EVENTS OF DEFAULT; NOTICE Any one of the following events constitutes an "Event of Default" under each Trust Agreement (an "Event of Default") with respect to the QUIPS issued thereunder (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) the occurrence of a Debenture Event of Default (see "Description of QUIDS--Debenture Events of Default"); or (ii) default by the Property Trustee in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or (iii) default by the Property Trustee in the payment of any Redemption Price of any QUIPS or Common Security when it becomes due and payable; or 20 (iv) default in the performance, or breach, in any material respect, of any covenant or warranty of the Issuer Trustees in such Trust Agreement (other than a covenant or warranty a default in the performance of which or the breach of which is dealt with in clause (ii) or (iii) above), and continuation of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the defaulting Issuer Trustee or Trustees by the holders of at least 25% in aggregate liquidation preference of the outstanding QUIPS of the applicable Issuer, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" under such Trust Agreement; or (v) the occurrence of certain events of bankruptcy or insolvency with respect to the Trust or the Property Trustee and, in the case of the Property Trustee, the failure by Nevada Power to appoint a successor Property Trustee within 60 days thereof. Within fifteen Business Days after the occurrence of any Event of Default known to the Property Trustee, the Property Trustee shall transmit notice of such Event of Default to the holders of such Issuer's QUIPS, the Administrative Trustees and Nevada Power, as Depositor, unless such Event of Default shall have been cured or waived or unless, except for a default in the payment of principal of (or premium if any) or interest on any of the QUIPS or QUIDS, the Property Trustee in good faith determinates the withholding of such notice is in the interests of the holders of the QUIPS. Nevada Power, as Depositor, and the Administrative Trustees are required to file annually with the Property Trustee a certificate as to whether or not they are in compliance with all the conditions and covenants applicable to them under each Trust Agreement. If, in the event of a Debenture Event of Default, the Debenture Trustee fails, or the holders of not less than 25% in principal amount of the outstanding QUIDS fail, to declare the principal of all of the QUIDS to be immediately due and payable, the holders of at least 25% in aggregate liquidation preference of the QUIPS then outstanding shall have such right. If a Debenture Event of Default has occurred and is continuing, the QUIPS shall have a preference over the Common Securities upon termination of each Issuer as described above. See "--Liquidation Distribution Upon Termination." The existence of an Event of Default does not entitle the holders of QUIPS to accelerate the maturity thereof. ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF QUIPS If an Event of Default has occurred and is continuing, then the holders of QUIPS would rely on the enforcement by the Debenture Trustee of its rights as a holder of the related QUIDS against Nevada Power. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing and such event is attributable to the failure of Nevada Power to pay interest or principal (or premium) on the related QUIDS on the date such interest or principal (or premium) is otherwise payable (or in the case of redemption, on the redemption date), then a holder of QUIPS may directly institute a proceeding against Nevada Power for enforcement of payment to such holder of the principal of or interest or premium on the related QUIDS having a principal amount equal to the aggregate liquidation preference of the QUIPS of such holder (a "Direct Action") after the respective due date specified in the related QUIDS. In connection with such Direct Action, Nevada Power will be subrogated to the rights of such holder of QUIPS under the Trust Agreement to the extent of any payment made by Nevada Power to such holder of QUIPS in such Direct Action. REMOVAL OF ISSUER TRUSTEES Unless a Debenture Event of Default has occurred and is continuing, any Issuer Trustee may be removed at any time by Nevada Power as the holder of the Common Securities. If a Debenture Event of Default has occurred and is continuing, the Delaware Trustee or the Property Trustee may be removed at such time by the holders of a majority in Liquidation Amount of the outstanding QUIPS. No resignation or 21 removal of an Issuer Trustee and no appointment of a successor trustee shall be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the applicable Trust Agreement. CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE Unless an Event of Default has occurred and is continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, Nevada Power, as the holder of the Common Securities, and the Administrative Trustees shall have power to appoint one or more persons approved by the Property Trustee either to act as a co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such person or persons in such capacity any property, title, right or power deemed necessary or desirable, subject to the provisions of the applicable Trust Agreement. In case a Debenture Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make such appointment. MERGER OR CONSOLIDATION OF ISSUER TRUSTEES Any corporation into which the Property Trustee, the Delaware Trustee or any Administrative Trustee that is not a natural person may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of such Trustee, shall be the successor of such Trustee under each Trust Agreement, provided such corporation shall be otherwise qualified and eligible. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUERS An Issuer may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other Person, except as described below. An Issuer may, at the request of Nevada Power, with the consent of the Administrative Trustees and without the consent of or notice to the holders of the QUIPS, merge with or into, consolidate, amalgamate, be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State; provided that (i) such successor entity either (a) expressly assumes all of the obligations of such Issuer with respect to the QUIPS or (b) substitutes for the QUIPS other securities having substantially the same terms as the QUIPS (the "Successor Securities") so long as the Successor Securities rank the same as the QUIPS rank in priority with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) Nevada Power expressly appoints a trustee of such successor entity possessing the same powers and duties as the Property Trustee as the holder of the Corresponding QUIDS, (iii) the Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the QUIPS are then listed, if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the QUIPS (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the QUIPS (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose identical to that of the Issuer, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer, or lease, Nevada Power has received an opinion of counsel experienced in such matters to the effect that (a) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the QUIPS (including any Successor Securities) in any material respect and (b) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Issuer nor such successor entity will be required to register as an investment company under 22 the Investment Company Act, and (viii) Nevada Power or any permitted successor or assignee owns all of the Common Securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee. Notwithstanding the foregoing, an Issuer shall not, except with the consent of holders of 100% in aggregate liquidation preference of the QUIPS, consolidate, amalgamate, merge with or into, be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it or acquire or lease its properties and assets substantially as an entirety if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Issuer or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT Except as provided below and under "Description of Guarantees--Amendments and Assignment" and as otherwise required by law and the applicable Trust Agreement, the holders of the QUIPS will have no voting rights. Each Trust Agreement may be amended from time to time by Nevada Power and the Issuer Trustees, without the consent of the holders of the QUIPS (i) to cure any ambiguity, correct or supplement any provisions in such Trust Agreement that may be inconsistent with any other provision, or to make any other provisions with respect to matters or questions arising under such Trust Agreement that shall not be inconsistent with the other provisions of such Trust Agreement, or (ii) to modify, eliminate or add to any provisions of such Trust Agreement to such extent as shall be necessary to ensure that the Issuer will be classified for United States federal income tax purposes as a grantor trust at all times that any QUIPS and Common Securities are outstanding or to ensure that the Issuer will not be required to register as an "investment company" under the Investment Company Act, provided, however, that in the case of clause (i), such action shall not adversely affect in any material respect the interests of any holder of QUIPS or Common Securities, and any amendments of such Trust Agreement shall become effective when notice thereof is given to the holders of QUIPS and Common Securities. Each Trust Agreement may be amended by the Issuer Trustees and Nevada Power with (i) the consent of holders representing a majority (based upon Liquidation Amounts) of the outstanding QUIPS and Common Securities and (ii) receipt by the Issuer Trustees of an opinion of counsel experienced in such matters to the effect that such amendment or the exercise of any power granted to the Issuer Trustees in accordance with such amendment will not affect the Issuer's status as a grantor trust for United States federal income tax purposes or the Issuer's exemption from status of an "investment company" under the Investment Company Act, provided, further that without the consent of each holder of QUIPS and Common Securities, such Trust Agreement may not be amended to (i) change the amount or timing of any Distribution on the QUIPS and Common Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the QUIPS and Common Securities as of a specified date or (ii) restrict the right of a holder of QUIPS and Common Securities to institute suit for the enforcement of any such payment on or after such date. So long as any Corresponding QUIDS are held by the Property Trustee, the Issuer Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee or executing any trust or power conferred on the Property Trustee with respect to such Corresponding QUIDS, (ii) waive any past default that is waiveable under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the QUIDS shall be due and payable or (iv) consent to any amendment, modification or termination of the Indenture or such Corresponding QUIDS, where such consent shall be required, without, in each case, obtaining the prior approval of the holders of a majority in aggregate liquidation preference of all outstanding corresponding QUIPS; provided, however, that where a consent under the Indenture would require the consent of each holder of Corresponding QUIDS affected thereby, no such consent shall be given by the Property Trustee without the prior consent of each holder of the corresponding QUIPS. The Issuer Trustees shall not revoke any action previously authorized or approved by a vote of the holders of the QUIPS except by subsequent vote 23 of the holders of the QUIPS. The Property Trustee shall notify each holder of record of the QUIPS of any notice of default with respect to the Corresponding QUIDS. In addition to obtaining the foregoing approvals of the holders of the QUIPS, prior to taking any of the foregoing actions, the Issuer Trustees shall obtain an opinion of counsel experienced in such matters to the effect that the Issuer will not be classified as a corporation for United States federal income tax purposes on account of such action. Any required approval of holders of QUIPS may be given at a meeting of holders of QUIPS convened for such purpose or pursuant to written consent. The Property Trustee will cause a notice of any meeting at which holders of QUIPS are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be given to each holder of record of QUIPS in the manner set forth in the applicable Trust Agreement. No vote or consent of the holders of QUIPS will be required for an Issuer to redeem and cancel its QUIPS in accordance with the applicable Trust Agreement. Notwithstanding that holders of QUIPS are entitled to vote or consent under any of the circumstances described above, any of the QUIPS that are owned by Nevada Power, the Issuer Trustees or any affiliate of Nevada Power or any Issuer Trustees, shall, for purposes of such vote or consent, be treated as if they were not outstanding. PAYMENT AND PAYING AGENCY Payments in respect of the QUIPS shall be made to DTC, which shall credit the relevant accounts at DTC on the applicable Distribution Dates or, if any Issuer's QUIPS are not held by DTC, such payments shall be made by check mailed to the address of the holder entitled thereto as such address shall appear on the Register. Unless otherwise specified in the applicable Prospectus Supplement, the paying agent (the "Paying Agent") shall initially be the Property Trustee and any co-paying agent chosen by the Property Trustee and acceptable to the Administrative Trustees and Nevada Power. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees, the Property Trustee and Nevada Power. In the event that the Property Trustee shall no longer be the Paying Agent, the Administrative Trustees shall appoint a successor (which shall be a bank or trust company acceptable to the Property Trustee and Nevada Power) to act as Paying Agent. BOOK-ENTRY ISSUANCE DTC will act as securities depositary for all of the QUIPS. The QUIPS will be issued only as fully-registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully-registered global certificates will be issued for the QUIPS of each Issuer, representing in the aggregate the total number of such Issuer's QUIPS, and will be deposited with DTC. DTC is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain custodial relationships with Direct Participants, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Commission. 24 Purchases of QUIPS within the DTC system must be made by or through Direct Participants, which will receive a credit for the QUIPS on DTC's records. The ownership interest of each actual purchaser of each QUIPS ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased QUIPS. Transfers of ownership interests in the QUIPS are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in QUIPS, except in the event that use of the book-entry system for the QUIPS of such Issuer is discontinued. DTC has no knowledge of the actual Beneficial Owners of the QUIPS; DTC's records reflect only the identity of the Direct Participants to whose accounts such QUIPS are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Redemption notices shall be sent to Cede & Co. as the registered holder of the QUIPS. If less than all of an Issuer's QUIPS are being redeemed, DTC's current practice is to determine by lot the amount of the interest of each Direct Participant to be redeemed. Although voting with respect to the QUIPS is limited, in those instances in which a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to QUIPS. Under its usual procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the Property Trustee as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts such QUIPS are credited on the record date (identified in a listing attached to the Omnibus Proxy). Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners and the voting rights of Direct Participants, Indirect Participants and Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Distribution payments on the QUIPS will be made by the Property Trustee to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsibility of such Participant and not of DTC, the Property Trustee, the Issuer or Nevada Power, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of Distributions to DTC is the responsibility of the Property Trustee, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursements of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depositary with respect to any of the QUIPS at any time by giving reasonable notice to the Property Trustee and Nevada Power. In the event that a successor securities depositary is not obtained, definitive QUIPS certificates representing such QUIPS are required to be printed and delivered. Nevada Power, at its option, may decide to discontinue use of the system of book-entry transfers through DTC (or a successor depositary). After a Debenture Event of Default, the holders of a majority in liquidation preference of QUIPS may determine to discontinue the system of book-entry transfers through DTC. In any such event, definitive certificates for such Issuer's QUIPS will be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuers and Nevada Power believe to be accurate, but the Issuers and Nevada Power assume no responsibility for the accuracy thereof. Neither the Issuers nor Nevada Power has any 25 responsibility for the performance by DTC or its Participants of their respective obligations as described herein or under the rules and procedures governing their respective operations. REGISTRAR AND TRANSFER AGENT Unless otherwise specified in the applicable Prospectus Supplement, the Property Trustee will act as registrar and transfer agent for the QUIPS. Registration of transfers of QUIPS will be effected without charge by or on behalf of each Issuer, but upon payment of any tax or other governmental charges that may be imposed in connection with any transfer or exchange. The Issuers will not be required to register or cause to be registered the transfer of their QUIPS after such QUIPS have been called for redemption. THE TRUSTEES The Delaware Trustee will act as the resident trustee in the State of Delaware and will have no other significant duties. The Property Trustee will hold the QUIDS on behalf of the Issuers and will maintain a payment account with respect to the QUIPS and the Common Securities, and will also act as trustee under the Trust Agreements for the purposes of the Trust Indenture Act. See "Events of Default; Notice." The Administrative Trustees will administer the day to day operations of the Issuers. The Property Trustee, other than during the occurrence and continuance of an Event of Default, undertakes to perform only such duties as are specifically set forth in each Trust Agreement and, after such Event of Default, must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Property Trustee is under no obligation to exercise any of the powers vested in it by the applicable Trust Agreement at the request of any holder of QUIPS unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. If no Event of Default has occurred and is continuing and the Property Trustee is required to decide between alternative causes of action, construe ambiguous provisions in the applicable Trust Agreement or is unsure of the application of any provision of the applicable Trust Agreement, and the matter is not one on which holders of QUIPS are entitled under such Trust Agreement to vote, then the Property Trustee shall take such action as is directed by Nevada Power and if not so directed, shall take such action as it deems advisable and in the best interests of the holders of the QUIPS and the Common Securities and will have no liability except for its own bad faith, negligence or willful misconduct. The Administrative Trustees are authorized and directed to conduct the affairs of and to operate the Issuers in such a way that no Issuer will be deemed to be an "investment company" required to be registered under the Investment Company Act or classified as an association taxable as a corporation for United States federal income tax purposes and so that the Corresponding QUIDS will be treated as indebtedness of Nevada Power for United States federal income tax purposes. In this connection, Nevada Power and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of each Issuer or each Trust Agreement, that Nevada Power and the Administrative Trustees determine in their discretion to be necessary or desirable for such purposes, as long as such action does not materially adversely affect the interests of the holders of the related QUIPS. GOVERNING LAW Each Trust Agreement and the QUIPS will be governed by and construed in accordance with the laws of the State of Delaware. MISCELLANEOUS Holders of the QUIPS have no preemptive or similar rights. No Issuer may borrow money or issue debt or mortgage or pledge any of its assets. 26 DESCRIPTION OF GUARANTEES Each Guarantee will be executed and delivered by Nevada Power concurrently with the issuance by each Issuer of its QUIPS for the benefit of the holders from time to time of such QUIPS. IBJ Schroder will act as indenture trustee ("Guarantee Trustee") under each Guarantee for the purposes of compliance with the Trust Indenture Act and each Guarantee will be qualified as an indenture under the Trust Indenture Act. This summary of certain provisions of the Guarantees does not purport to be complete and is subject to, and qualified in its entirety by reference to, all of the provisions of each Guarantee, including the definitions therein of certain terms, and the Trust Indenture Act. The form of the Guarantee has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. Reference in this summary to QUIPS means that Issuer's QUIPS to which a Guarantee relates. The Guarantee Trustee will hold each Guarantee for the benefit of the holders of the related Issuer's QUIPS. GENERAL Nevada Power will irrevocably agree to pay in full on a subordinated basis, to the extent described herein, the Guarantee Payments (as defined below) to the holders of the QUIPS, as and when due, regardless of any defense, right of set-off or counterclaim that such Issuer may have or assert other than the defense of payment. The following payments with respect to the QUIPS, to the extent not paid by or on behalf of the related Issuer (the "Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated and unpaid Distributions required to be paid on such QUIPS, if and to the extent that the Property Trustee has available at such time in the payment account funds sufficient to make such payment, (ii) the Redemption Price with respect to any QUIPS called for redemption but only to the extent that the Property Trustee has available when due, in the payment account, funds sufficient to make such payment, or (iii) upon a voluntary or involuntary dissolution, winding up or liquidation of such Issuer (unless the Corresponding QUIDS are distributed to holders of such QUIPS), the lesser of (a) the Liquidation Distribution but only to the extent the Property Trustee has available when due, in the payment account, funds sufficient to make such payment and (b) the amount of assets of such Issuer remaining available for distribution to holders of QUIPS. Nevada Power's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by Nevada Power to the holders of the applicable QUIPS or by causing the Issuer to pay such amounts to such holders. Each Guarantee will be an irrevocable guarantee on a subordinated basis of payment of the related Issuer's obligations under the QUIPS, but will apply only to the extent that such related Issuer has funds sufficient to make such payments, and is not a guarantee of collection. If Nevada Power does not make interest payments on the Corresponding QUIDS held by the Issuer, the Issuer will not be able to pay Distributions on the QUIPS and will not have funds legally available therefor. Each Guarantee will rank subordinate and junior in right of payment to all Senior Debt of Nevada Power. See "--Status of the Guarantees." Except as otherwise provided in the applicable Prospectus Supplement, the Guarantees do not limit the incurrence or issuance of other secured or unsecured debt of Nevada Power, whether under the Indenture or any existing or other indenture that Nevada Power may enter into in the future or otherwise, including, without limitation, Nevada Power's Indenture of Mortgage and Deed of Trust dated October 1, 1953 entered into with Bankers Trust Company, together with supplemental indentures heretofore or hereafter entered into. Nevada Power has, through the applicable Guarantee, the applicable Trust Agreement, the QUIDS, the Indenture and the Expense Agreement, taken together, fully, irrevocably and unconditionally guaranteed all of the Issuer's obligations under the QUIPS. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes such guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the Issuer's obligations under the QUIPS. See "Relationship Among the QUIPS, the Corresponding QUIDS and the Guarantees." 27 STATUS OF THE GUARANTEES Each Guarantee will constitute an unsecured obligation of Nevada Power and will rank subordinate and junior in right of payment to all Senior Debt. Each Guarantee will rank PARI PASSU with all other Guarantees issued by Nevada Power. Each Guarantee will constitute a guarantee of payment and not of collection (i.e., the guaranteed party may institute a legal proceeding directly against the Guarantor to enforce its rights under the Guarantee without first instituting a legal proceeding against any other person or entity). Each Guarantee will be held for the benefit of the holders of the related QUIPS. Each Guarantee will not be discharged except by payment of the Guarantee Payments in full to the extent not paid by the Issuer or upon distribution to the holders of the QUIPS of the Corresponding QUIDS. None of the Guarantees places a limitation on the amount of additional Senior Debt, parity obligations or other indebtedness that may be incurred by Nevada Power. There are no provisions in any Guarantee that afford holders of any QUIDS protection in the event of a highly leveraged or similar transaction involving Nevada Power, whether or not involving a change in control of Nevada Power. The electric utility business is capital intensive and Nevada Power anticipates that from time to time it will incur substantial additional indebtedness constituting Senior Debt. AMENDMENTS AND ASSIGNMENT Except with respect to any changes which do not materially adversely affect the rights of holders of the related QUIPS (in which case no vote will be required), no Guarantee may be amended without the prior approval of the holders of a majority of the aggregate liquidation preference of such outstanding QUIPS. The manner of obtaining any such approval will be as set forth under "Description of QUIPS--Voting Rights; Amendment of Each Trust Agreement." All guarantees and agreements contained in each Guarantee shall bind the successors, assigns, receivers, trustees and representatives of Nevada Power and shall inure to the benefit of the holders of the related QUIPS then outstanding. EVENTS OF DEFAULT An event of default under each Guarantee will occur upon the failure of Nevada Power to perform any of its payment or other obligations thereunder provided, however, that, except with respect to a default in payment of any Guarantee Payments, Nevada Power shall have received notice of default and shall not have cured such default within 60 days after receipt of such notice. The holders of a majority in aggregate Liquidation Amount of the related QUIPS may waive, on behalf of all holders, any event of default and its consequences. The holders of a majority in aggregate Liquidation Amount of the related QUIPS have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of such Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under such Guarantee. Any holder of the QUIPS may institute a legal proceeding directly against Nevada Power to enforce its rights under such Guarantee without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. Nevada Power, as guarantor, is required to file annually with the Guarantee Trustee a certificate as to whether or not Nevada Power is in compliance with all the conditions and covenants applicable to it under the Guarantee. INFORMATION CONCERNING THE GUARANTEE TRUSTEE The Guarantee Trustee, other than during the occurrence and continuance of a default by Nevada Power in performance of any Guarantee, undertakes to perform only such duties as are specifically set forth in each Guarantee and, after default with respect to any Guarantee, must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Guarantee Trustee is under no obligation to exercise any of the powers vested in it by 28 any Guarantee at the request of any holder of any QUIPS unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. TERMINATION OF THE GUARANTEE Each Guarantee will terminate and be of no further force and effect upon full payment of the Redemption Price of the related QUIPS, upon full payment of the amounts payable upon liquidation of the related Issuer or upon distribution of Corresponding QUIDS to the holders of the related QUIPS. Each Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of the related QUIPS must restore payment of any sums paid under such QUIPS or such Guarantee. GOVERNING LAW Each Guarantee will be governed by and construed in accordance with the laws of the State of New York. THE EXPENSE AGREEMENT Pursuant to an Expense Agreement entered into by Nevada Power under each Trust Agreement (the "Expense Agreement"), Nevada Power will irrevocably and unconditionally guarantee, to each person or entity to whom the Issuer becomes indebted or liable, the full payment of any indebtedness, costs, expenses or liabilities of the Issuer, other than obligations of the Issuer to pay to the holders of any QUIPS or other similar interests in the Issuer the amounts due such holders pursuant to the terms of the QUIPS or such other similar interests, as the case may be. DESCRIPTION OF CORRESPONDING QUIDS The Corresponding QUIDS are to be issued in one or more series under the Indenture with terms corresponding to the terms of the related QUIPS. See "Description of QUIDS." This summary of certain terms and provisions of, or relating to, Corresponding QUIDS and the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Indenture, the form of which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part, and to the Trust Indenture Act. Whenever particular defined terms of the Indenture (as supplemented or amended from time to time) are referred to herein or in a Prospectus Supplement, such defined terms are incorporated herein or therein by reference. GENERAL Concurrently with the issuance of each Issuer's QUIPS, such Issuer will invest the proceeds thereof and the consideration paid by Nevada Power for the Common Securities in a series of Corresponding QUIDS issued by Nevada Power to such Issuer. Each series of Corresponding QUIDS will be in the principal amount equal to the aggregate stated Liquidation Amount of the related QUIPS plus Nevada Power's concurrent investment in the Common Securities and will rank PARI PASSU with all other series of QUIDS. The Corresponding QUIDS will be unsecured and subordinate and junior in right of payment to the extent and in the manner set forth in the Indenture to all Senior Debt of Nevada Power. See "Description of QUIDS--Subordination" and the Prospectus Supplement relating to any offering of related QUIPS. 29 OPTIONAL REDEMPTION Unless otherwise specified in the applicable Prospectus Supplement, Nevada Power may, at its option, redeem the Corresponding QUIDS of any series in whole at any time or in part from time to time. Except as otherwise set forth in the applicable Prospectus Supplement, the redemption price for any Corresponding QUIDS so redeemed shall be equal to any accrued and unpaid interest thereon to the date fixed for redemption, plus the principal amount thereof. See "Description of QUIDS--Redemption." If a Special Event in respect of an Issuer shall occur and be continuing, Nevada Power may, at its option, redeem the Corresponding QUIDS at any time within 90 days of the occurrence of such Special Event, in whole but not in part, subject to the provisions of the Indenture. The redemption price for any Corresponding QUIDS shall be equal to 100% of the principal amount of such Corresponding QUIDS then outstanding plus accrued and unpaid interest to the date fixed for redemption. For so long as the applicable Issuer is the holder of all the outstanding series of Corresponding QUIDS, the proceeds of any such redemption will be used by the Issuer to redeem the Corresponding QUIPS in accordance with their terms. Nevada Power may not redeem a series of Corresponding QUIDS in part unless all accrued and unpaid interest has been paid in full on all outstanding Corresponding QUIDS of such series for all interest periods terminating on or prior to the Redemption Date. CERTAIN COVENANTS OF NEVADA POWER Nevada Power covenants in the Indenture as to each series of Corresponding QUIDS that if and so long as (i) the Issuer of the related series of QUIPS and Common Securities is the holder of all such Corresponding QUIDS, (ii) a Tax Event in respect of such Issuer has occurred and is continuing and (iii) Nevada Power has not redeemed such Corresponding QUIDS and has not terminated such Issuer, Nevada Power will pay to such Issuer such Additional Sums. Nevada Power also covenants, as to each series of Corresponding QUIDS, that it will not, and will not permit any subsidiary of Nevada Power to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of Nevada Power's capital stock or (ii) make any payment of principal of, or interest or premium, if any, on or repay or repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness (including other Corresponding QUIDS) that ranks PARI PASSU with or junior in right of payment to the Corresponding QUIDS or make any guarantee payments with respect to any guarantee of any indebtedness if such guarantee ranks PARI PASSU or junior in right of payment to the Corresponding QUIDS (other than (a) dividends or distributions in Common Stock of Nevada Power, (b) redemptions or purchases of rights pursuant to Nevada Power's Stock Purchase Rights Plan or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under the Stock Purchase and Dividend Reinvestment Plan and any of Nevada Power's benefit plans for its directors, officers or employees, and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by Nevada Power or any of its subsidiaries) if at such time (i) there shall have occurred (A) any Debenture Event of Default or (B) any event that with the giving of notice or the lapse of time, or both, would constitute, a Debenture Event of Default with respect to Corresponding QUIDS of such series and in the case of (B), in respect of which Nevada Power shall not have taken reasonable steps to cure, (ii) Nevada Power shall be in default with respect to its payment of any obligations under the related Guarantee or (iii) Nevada Power shall have given notice of its election to begin an Extension Period as provided in the Indenture with respect to Corresponding QUIDS of such series and shall not have rescinded such notice, or such Extension Period, or any extension thereof, shall be continuing. Nevada Power will also covenant, as to each series of Corresponding QUIDS, (i) to maintain directly or indirectly 100% ownership of the Common Securities of the Issuer to which Corresponding QUIDS have been issued, provided that certain successors which are permitted pursuant to the Indenture may succeed to Nevada Power's ownership of the Common Securities, (ii) not to voluntarily terminate, 30 wind-up or liquidate any Issuer, except (a) in connection with a distribution of Corresponding QUIDS to the holders of the QUIPS in liquidation of such Issuer or (b) in connection with certain mergers, consolidations or amalgamations permitted by the related Trust Agreement, (iii) remain the sole Depositor under each Trust Agreement and timely perform in all material respects all of its duties as Depositor and (iv) to use its reasonable efforts, consistent with the terms and provisions of the related Trust Agreement, to cause such Issuer to remain classified as a grantor trust and not as an association taxable as a corporation for United States federal income tax purposes. RELATIONSHIP AMONG THE QUIPS, THE CORRESPONDING QUIDS AND THE GUARANTEES FULL AND UNCONDITIONAL GUARANTEE Payments of Distributions and other amounts due on the QUIPS (to the extent the Issuer has funds available for the payment of such Distributions) are irrevocably guaranteed by Nevada Power, on a subordinated basis, as and to the extent set forth under "Description of Guarantees." Taken together, Nevada Power's obligations under each series of QUIDS, the Indenture, the related Trust Agreement, the related Expense Agreement and the related Guarantee provide, in the aggregate, a full, irrevocable and unconditional guarantee of payments of distributions and other amounts due on the related series of QUIPS. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes such guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the Issuer's obligations under the QUIPS. If and to the extent that Nevada Power does not make payments on any series of Corresponding QUIDS, such Issuer will not pay Distributions or other amounts due on related QUIPS. The Guarantees do not cover payment of Distributions when the related Issuer does not have sufficient funds to pay such Distributions. In such event, a holder of a series of QUIPS may institute a legal proceeding directly against Nevada Power to enforce payment of such Distributions to such holder after the respective due dates. The obligations of Nevada Power under each Guarantee are subordinate and junior in right of payment to all Senior Debt of Nevada Power. SUFFICIENCY OF PAYMENTS As long as payments of interest and other payments are made when due (taking account of any Extension Period) on each series of Corresponding QUIDS, such payments will be sufficient to cover Distributions and other payments due on the related QUIPS, primarily because (i) the aggregate principal amount of each series of Corresponding QUIDS will be equal to the sum of the aggregate stated liquidation amount of the related QUIPS and related Common Securities; (ii) the interest rate and interest and other payment dates on each series of Corresponding QUIDS will match the Distribution rate and Distribution and other payment dates for the related QUIPS; (iii) Nevada Power shall pay for all and any costs, expenses and liabilities of such Issuer except the Issuer's obligations to holders of its QUIPS under such QUIPS; and (iv) each Trust Agreement further provides that the Issuer will not engage in any activity that is not consistent with the limited purposes of such Issuer. Notwithstanding anything to the contrary in the Indenture, Nevada Power has the right to set-off any payment it is otherwise required to make thereunder with and to the extent Nevada Power has theretofore made, or is concurrently on the date of such payment making, a payment under the related Guarantee. ENFORCEMENT RIGHTS OF HOLDERS OF QUIPS A holder of any related QUIPS may institute a legal proceeding directly against Nevada Power to enforce its rights under the related Guarantee without first instituting a legal proceeding against the Guarantee Trustee, the related Issuer or any other person or entity. 31 A default or event of default under any Senior Debt of Nevada Power will not constitute a default or Event of Default under the Indenture. However, in the event of payment defaults under, or acceleration of, Senior Debt of Nevada Power, the subordination provisions of the Indenture provide that no payments may be made in respect of the Corresponding QUIDS until such Senior Debt has been paid in full or any payment default thereunder has been cured or waived. Failure to make required payments on any series of Corresponding QUIDS would constitute an Event of Default under the Indenture. LIMITED PURPOSE OF ISSUERS Each Issuer's QUIPS evidence a beneficial interest in such Issuer, and each Issuer exists for the exclusive purpose of (i) issuing and selling its QUIPS and Common Securities, (ii) using the proceeds from the sale of such QUIPS and Common Securities to acquire a corresponding series of Corresponding QUIDS issued by Nevada Power, (iii) receiving payments to be made with respect to the QUIDS and disbursing such payments in accordance with the terms of the Trust Agreements and (iv) engaging in only those other activities necessary, convenient or incidental thereto. A principal difference between the rights of a holder of a QUIPS and a holder of a Corresponding QUIDS is that a holder of a Corresponding QUIDS is entitled to receive from Nevada Power the principal amount of and interest accrued on Corresponding QUIDS held, while a holder of QUIPS is entitled to receive Distributions from such Issuer (or from Nevada Power under the applicable Guarantee) if and to the extent such Issuer has funds available for the payment of such Distributions. RIGHTS UPON TERMINATION Upon any voluntary or involuntary termination, winding-up or liquidation of any Issuer involving the liquidation of the Corresponding QUIDS, the holders of the related QUIPS will be entitled to receive, out of assets held by such Issuer, the Liquidation Distribution in cash. See "Description of QUIPS-- Liquidation Distribution Upon Termination." Upon any voluntary or involuntary liquidation or bankruptcy of Nevada Power, the Property Trustee, as holder of the Corresponding QUIDS, would be a subordinated creditor of Nevada Power, subordinated in right of payment to all Senior Debt, but entitled to receive payment in full of principal and interest before any stockholders of Nevada Power receive payments or distributions. Because Nevada Power is the guarantor under each Guarantee and has agreed to pay for all costs, expenses and liabilities of each Issuer (other than the Issuer's obligations to the holders of its QUIPS), the positions of a holder of such QUIPS and a holder of such Corresponding QUIDS relative to other creditors and to stockholders of Nevada Power in the event of liquidation or bankruptcy of Nevada Power would be substantially the same. PLAN OF DISTRIBUTION The QUIDS and the QUIPS may be sold in a public offering to or through underwriters or dealers designated from time to time. Nevada Power and each Issuer may sell its QUIDS and QUIPS as soon as practicable after effectiveness of the Registration Statement of which the Prospectus is a part. The names of any underwriters or dealers involved in the sale of the QUIDS and QUIPS in respect of which this Prospectus is delivered, the amount or number of QUIDS and QUIPS to be purchased by any such underwriters and any applicable commissions or discounts will be set forth in the Prospectus Supplement. Underwriters may offer and sell QUIDS and QUIPS at a fixed price or prices, which may be changed, or from time to time at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. In connection with the sale of QUIPS, underwriters may be deemed to have received compensation from Nevada Power and/or the applicable Issuer in the form of underwriting discounts or commissions and may also receive commissions. Underwriters may sell QUIDS and QUIPS to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters. Any underwriting compensation paid by Nevada Power and/or the applicable Issuer to underwriters in connection with the offering of QUIDS and QUIPS, and any discounts, concessions or commissions 32 allowed by such underwriters to participating dealers, will be described in a Prospectus Supplement. Underwriters and dealers participating in the distribution of QUIDS and QUIPS may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of such QUIDS and QUIPS may be deemed to be underwriting discounts and commissions, under the Securities Act. Underwriters and dealers may be entitled, under agreement with Nevada Power and the applicable Issuer, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by Nevada Power for certain expenses. In connection with the offering of the QUIPS of any Issuer, such Issuer may grant to the underwriters an option to purchase additional QUIPS to cover over-allotments, if any, at the initial public offering price (with an additional underwriting commission), as may be set forth in the accompanying Prospectus Supplement. If such Issuer grants any over-allotment option, the terms of such over-allotment option will be set forth in the Prospectus Supplement for such QUIPS. Underwriters and dealers may engage in transactions with, or perform services for, Nevada Power and/or the applicable Issuer and/or any of their affiliates in the ordinary course of business. The QUIDS and the QUIPS will be new issues of securities and will have no established trading market. Any underwriters to whom QUIDS and QUIPS are sold for public offering and sale may make a market in such QUIDS and QUIPS, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. Such QUIDS and QUIPS may or may not be listed on a national securities exchange, as set forth in the applicable Prospectus Supplement. No assurance can be given as to the liquidity of or the existence of trading markets for any QUIDS or QUIPS. LEGAL MATTERS Unless otherwise set forth in the applicable Prospectus Supplement, certain matters of Delaware law relating to the legality of the QUIPS, the validity of the Trust Agreement and the formation of the Issuer will be passed upon by Richards, Layton & Finger, special Delaware counsel to Nevada Power and the Issuer. The legality of the Guarantee and QUIDS will be passed upon for Nevada Power by Richard L. Hinckley, Vice President, Secretary and Chief Counsel for Nevada Power and by Best Best & Krieger LLP. Certain legal matters will be passed upon for the Underwriters by Jones, Day, Reavis & Pogue, Chicago, Illinois. Certain matters relating to United States federal income tax considerations will be passed upon for Nevada Power and the Series A Issuer by their special tax counsel, Jones, Day, Reavis & Pogue, Chicago, Illinois. For the purposes of their opinions, Best, Best & Krieger LLP and Jones, Day, Reavis & Pogue may rely on the opinion of Mr. Hinckley as to matters governed by the laws of the State of Nevada. EXPERTS The financial statements and financial statement schedule of Nevada Power incorporated in this Prospectus by reference to Nevada Power's Annual Report on Form 10-K for the year ended December 31, 1995 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, which are incorporated herein by reference, and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in auditing and accounting. 33 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF NEVADA POWER COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. -------------- TABLE OF CONTENTS
PAGE ---- PROSPECTUS SUPPLEMENT Risk Factors.............................................................. S-4 NVP Capital I............................................................. S-8 Nevada Power Company...................................................... S-8 Ratio of Earnings to Fixed Charges........................................ S-9 Use of Proceeds........................................................... S-9 Accounting Treatment...................................................... S-9 Capitalization............................................................ S-10 Selected Financial and Operating Information.............................. S-11 Certain Terms of Series A QUIPS........................................... S-12 Certain Terms of Series A QUIDS........................................... S-14 Certain Federal Income Tax Consequences................................... S-18 Underwriting.............................................................. S-21 Legal Matters............................................................. S-22 PROSPECTUS Available Information..................................................... 3 Incorporation of Certain Information by Reference......................... 4 Use of Proceeds........................................................... 4 The Issuers............................................................... 4 Description of QUIDS...................................................... 5 Description of QUIPS...................................................... 15 Description of Guarantees................................................. 27 Description of Corresponding QUIDS........................................ 29 Relationship Among the QUIPS, the Corresponding QUIDS and the Guarantees.............................................................. 31 Plan of Distribution...................................................... 32 Legal Matters............................................................. 33 Experts................................................................... 33
5,000,000 PREFERRED SECURITIES NVP CAPITAL I % CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES, SERIES A (QUIPS)-SM- GUARANTEED, AS SET FORTH HEREIN, BY NEVADA POWER COMPANY --------- [LOGO] --------- GOLDMAN, SACHS & CO. DEAN WITTER REYNOLDS INC. LEGG MASON WOOD WALKER INCORPORATED MERRILL LYNCH & CO. PAINEWEBBER INCORPORATED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The estimated expenses in connection with the issuance and distribution of the Securities covered by this Registration Statement, other than underwriting discounts and commissions, are as follows: (a) SEC registration fee (actual)...................................... $37,878.79 (b) Printing fees and expenses......................................... $115,000.00 (c) Legal fees and expenses............................................ $100,000.00 (d) Accounting fees and expenses....................................... $70,000.00 (e) Blue Sky fees and expenses......................................... $ 5,000.00 (f) New York Stock Exchange Listing Fee................................ $50,000.00 (g) Rating Agency Fees................................................. $35,000.00 (h) Trustees' Fee...................................................... $15,000.00 (i) Other.............................................................. $22,121.21 ---------- Total.............................................................. $450,000.00 ---------- ----------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS As permitted by Section 78.037 of the Nevada General Corporation Law, Nevada Power has included in its Restated Articles of Incorporation a provision which states that a director or officer of Nevada Power shall not be liable to Nevada Power or its shareholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such limitation of liability is prohibited by Nevada General Corporation Law as the same exists or may hereafter be amended. Section 78.037 currently provides that any such provision may not eliminate or limit the liability of a director or officer for (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law; or (b) the payment of dividends in violation of the Nevada General Corporation Law. As permitted by Section 78.751 of the Nevada General Corporation Law, Article VIII of Nevada Power's Bylaws provides for the indemnification by Nevada Power, including suits brought by or on behalf of Nevada Power, of each director, officer, employee or agent thereof to the fullest extent permitted by Nevada law. As permitted by the Nevada General Corporation Law and Article VIII of Nevada Power's Bylaws, Nevada Power has entered into indemnity agreements with its directors and officers that provide for indemnification of such individuals to the fullest extent permitted under Nevada law, and Nevada Power maintains director's and officer's liability for its directors and officers against certain liabilities. ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION - --------- --------------------------------------------------------------------------------------------------------- 1.01 Proposed form of Underwriting Agreement Basic Provisions for Preferred Securities. 4.01 Junior Subordinated Indenture between Nevada Power and IBJ Schroder Bank & Trust Company, as Debenture Trustee. 4.02 Certificate of Trust of NVP Capital I. 4.03 Trust Agreement of NVP Capital I. 4.04 Certificate of Trust of NVP Capital II (substantially identical to Exhibit 4.02 except for names and dates).
filed. II-1 4.05 Trust Agreement of NVP Capital II (substantially identical to Exhibit 4.03 except for names and dates). 4.10 Form of Amended and Restated Trust Agreement (Agreements for NVP Capital I and NVP Capital II, are substantially identical except for names and dates). 4.11 Form of Preferred Security Certificate for NVP Capital I and NVP Capital II (included as Exhibit E of Exhibit 4.10 hereto). 4.12 Form of Guarantee Agreement (Agreements in respect of NVP Capital I and NVP Capital II, are substantially identical except for names and dates). 4.13 Form of Supplemental Indenture between Nevada Power and IBJ Schroder Bank & Trust Company, as Debenture Trustee (Supplemental Indentures for NVP Capital I and NVP Capital II are substantially identical except for names and dates). 4.14 Form of Agreement as to Expenses and Liabilities between Nevada Power and NVP Capital I (Agreement in respect of NVP Capital II is substantially identical except for names and dates) *5.01 Opinion of Best Best & Krieger LLP, relating to the legality of the Junior Subordinated Debentures and the Guarantees. *5.02 Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the legality of the Preferred Securities of NVP Capital I and NVP Capital II. *8.01 Opinion of Jones, Day, Reavis & Pogue, as to certain United States federal income tax matters. *12.01 Statement regarding Computation of Ratio of Earnings to Fixed Charges. 23.01 Consent of Deloitte & Touche LLP (included in Part II of this Amendment No. 1 to Registration Statement). 23.02 Consent of Best Best & Krieger LLP (included in Part II of this Amendment No. 1 to Registration Statement). 23.03 Consent of Richard L. Hinckley, Esq. (included in Part II of this Amendment No. 1 to Registration Statement). *23.04 Consent of Richards, Layton & Finger, special Delaware counsel (included in Exhibit 5.02 hereto). *23.05 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 8.01 hereto). 25.01 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank & Trust Company, as Trustee for the Junior Subordinated Indenture. 25.02 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank & Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of NVP Capital I. 25.03 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank & Trust Company, as Guarantee Trustee for the Guarantee for NVP Capital I.
* Previously filed. In addition to those Exhibits shown above, Nevada Power hereby incorporates the following Exhibits pursuant to Exchange Act Rule 12b-32 and Regulation #201.24 by reference to the filings set forth below:
EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ----------- ------------------------------------------------------------------- --------------------- ----------- 4.1 Certificate of Designation of Cumulative Preferred Stock as follows: 5.40% Series..................................................... 2.1 to Form S-1 2-16968 5.20% Series..................................................... 2.1 to Form S-1 2-20618 4.70% Series..................................................... 3.2 to Form 8-K 1-4698 July 1965 8% Series........................................................ 2.1 to Form S-7 2-44513
II-2
EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ----------- ------------------------------------------------------------------- --------------------- ----------- 8.70% Series..................................................... 2.1 to Form S-7 2-49622 11.50% Series.................................................... 2.1 to Form S-7 2-52238 9.75% Series..................................................... 2.1 to Form S-7 2-56788 Auction Series A................................................. 4.6 to Form S-3 33-15554 Auction Series A as amended November 14, 1991.................... 4.9 to Form S-3 33-44460 Auction Series A as amended December 12, 1991.................... 4.1 to Form 10-K 1-4698 Year 1992 9.90% Series..................................................... 4.1 to Form 10-K 1-4698 Year 1992 4.2 Indenture of Mortgage and Deed of Trust Providing for First Mortgage Bonds, dated October 1, 1953 and Twenty-Six Supplemental Indentures as follows: 4.2 to Form S-1 2-10932 First Supplemental Indenture, dated August 1, 1954............... 4.2 to Form S-1 2-11440 Second Supplemental Indenture, dated September 1, 1956........... 4.9 to Form S-1 2-12566 Third Supplemental Indenture, dated May 1, 1959.................. 4.13 to Form S-1 2-14949 Fourth Supplemental Indenture, dated October 1, 1960............. 4.5 to Form S-1 2-16968 Fifth Supplemental Indenture, dated December 1, 1961............. 4.6 to Form S-16 2-74929 Sixth Supplemental Indenture, dated October 1, 1963.............. 4.6A to Form S-1 2-21689 Seventh Supplemental Indenture, dated August 1, 1964............. 4.6B to Form S-1 2-22560 Eighth Supplemental Indenture, dated April 1, 1968............... 4.6C to Form S-9 2-28348 Ninth Supplemental Indenture, dated October 1, 1969.............. 4.6D to Form S-1 2-34588 Tenth Supplemental Indenture, dated October 1, 1970.............. 4.6E to Form S-7 2-38314 Eleventh Supplemental Indenture, dated November 1, 1972.......... 2.12 to Form S-7 2-45728 Twelfth Supplemental Indenture, dated December 1, 1974........... 2.13 to Form S-7 2-52350 Thirteenth Supplemental Indenture, dated October 1, 1976......... 4.14 to Form S-16 2-74929 Fourteenth Supplemental Indenture, dated May 1, 1977............. 4.15 to Form S-16 2-74929 Fifteenth Supplemental Indenture, dated September 1, 1978........ 4.16 to Form S-16 2-74929 Sixteenth Supplemental Indenture, dated December 1, 1981......... 4.17 to Form S-16 2-74929 Seventeenth Supplemental Indenture, dated August 1, 1982......... 4.2 to Form 10-K 1-4698 Year 1982 Eighteenth Supplemental Indenture, dated November 1, 1986........ 4.6 to Form S-3 33-9537 Nineteenth Supplemental Indenture, dated October 1, 1989......... 4.2 to Form 10-K 1-4698 Year 1989 Twentieth Supplemental Indenture, dated May 1, 1992.............. 4.21 to Form S-3 33-53034 Twenty-First Supplemental Indenture, dated June 1, 1992.......... 4.22 to Form S-3 33-53034 Twenty-Second Supplemental Indenture, dated June 1, 1992......... 4.23 to Form S-3 33-53034 Twenty-Third Supplemental Indenture, dated October 1, 1992....... 4.23 to Form S-3 33-53034 Twenty-Fourth Supplemental Indenture, dated October 1, 1992...... 4.23 to Form S-3 33-53034
II-3
EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ----------- ------------------------------------------------------------------- --------------------- ----------- Twenty-Fifth Supplemental Indenture, dated January 1, 1993....... 4.23 to Form S-3 33-53034 Twenty-Sixth Supplemental Indenture dated May 1, 1995............ 4.2 to Form 10-K 1-4698 Year 1995 4.3 Instrument of Further Assurance dated April 1, 1956 to Indenture of Mortgage and Deed of Trust dated October 1, 1953.................. 4.8 to Form S-1 2-12566 4.4 Rights Agreement dated October 15, 1990 between Manufacturers Hanover Trust Company and Nevada Power Company.................... 4.1 to Form 8-A 1-4698 Year 1990
ITEM 17. UNDERTAKINGS The undersigned Registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in the Registration Statement. (2) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (3) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4 (4) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (5) That, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling persons of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. For the purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas and State of Nevada on the 13th day of March, 1997. NEVADA POWER COMPANY By: /s/ CHARLES A. LENZIE ----------------------------------------- (Charles A. Lenzie, Chairman of the Board and Chief Executive Officer) PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED: (1) PRINCIPAL EXECUTIVE OFFICER /s/ CHARLES A. LENZIE - ---------------------------------------- Chairman of the Board and Chief March 13, 1997 Charles A. Lenzie Executive Officer (2) PRINCIPAL FINANCIAL AND PRINCIPAL ACCOUNTING OFFICER * STEVEN W. RIGAZIO - ---------------------------------------- Vice President and Treasurer, March 13, 1997 Steven W. Rigazio Chief Financial Officer (3) DIRECTORS * MARY LEE COLEMAN - ---------------------------------------- Director March 13, 1997 Mary Lee Coleman * FRED D. GIBSON, JR. - ---------------------------------------- Director March 13, 1997 Fred D. Gibson, Jr. * JOHN L. GOOLSBY - ---------------------------------------- Director March 13, 1997 John L. Goolsby * JERRY HERBST - ---------------------------------------- Director March 13, 1997 Jerry Herbst
II-6 * CONRAD L. RYAN - ---------------------------------------- Director March 13, 1997 Conrad L. Ryan * FRANK E. SCOTT - ---------------------------------------- Director March 13, 1997 Frank E. Scott * A. M. SMITH - ---------------------------------------- Director March 13, 1997 A. M. Smith * J.A. TIBERTI - ---------------------------------------- Director March 13, 1997 J.A. Tiberti * JOHN F. O'REILLY - ---------------------------------------- Director March 13, 1997 John F. O'Reilly *By CHARLES A. LENZIE - ---------------------------------------- (Charles A. Lenzie, Attorney-in-fact)
II-7 INDEPENDENT AUDITORS' CONSENT NEVADA POWER COMPANY We consent to the incorporation by reference in this Amendment No. 1 to Registration Statement No. 333-21091 of Nevada Power Company on Form S-3 of our reports dated February 14, 1996 appearing in and incorporated by reference in the Annual Report on Form 10-K of Nevada Power Company for the year ended December 31, 1995 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. DELOITTE & TOUCHE LLP Las Vegas, Nevada March 11, 1997 II-8 CONSENT OF COUNSEL I hereby consent to the use of my name as Vice President, Secretary and Chief Counsel of Nevada Power wherever it appears in this Amendment No. 1 to Registration Statement, including the Prospectus constituting a part thereof, and all amendments thereof. RICHARD L. HINCKLEY, Esq. Las Vegas, Nevada March 13, 1997 ------------------------ CONSENT OF COUNSEL We hereby consent to all references to our Firm included in or made a part of this Amendment No. 1 to Registration Statement, including the Prospectus constituting a part thereof, and all amendments thereof. BEST BEST & KRIEGER LLP Riverside, California March 13, 1997 II-9 Pursuant to the requirements of the Securities Act of 1933, NVP Capital I and NVP Capital II certify that they have reasonable grounds to believe that they meet all of the requirements for filing on Form S-3 and have duly caused this Amendment No. 1 to Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, State of Nevada, on March 13, 1997. NVP CAPITAL I (Registrant) By: Nevada Power Company, as Depositor By: /s/ CHARLES A. LENZIE -------------------------------------- Charles A. Lenzie, Chairman of the Board and Chief Executive Officer NVP CAPITAL II (Registrant) By: Nevada Power Company, as Depositor By: /s/ CHARLES A. LENZIE -------------------------------------- Charles A. Lenzie, Chairman of the Board and Chief Executive Officer II-10 EXHIBIT INDEX
SEQUENTIAL EXHIBIT NUMBERING NO. PAGE NO. - --------- --------------- 1.01 Proposed form of Underwriting Agreement Basic Provisions for Preferred Securities 4.01 Junior Subordinated Indenture between Nevada Power and IBJ Schroder Bank & Trust Company, as Debenture Trustee 4.02 Certificate of Trust of NVP Capital I....................................................... 4.03 Trust Agreement of NVP Capital I............................................................ 4.04 Certificate of Trust of NVP Capital II (substantially identical to Exhibit 4.02 except for names and dates)........................................................................... 4.05 Trust Agreement of NVP Capital II (substantially identical to Exhibit 4.02 except for names and dates)................................................................................. 4.10 Form of Amended and Restated Trust Agreement (Agreements for NVP Capital I and NVP Capital II are substantially identical except for names and dates) 4.11 Form of Preferred Security Certificate for NVP Capital I and NVP Capital II (included as Exhibit E of Exhibit 4.10 hereto) 4.12 Form of Guarantee Agreement (Agreements in respect of NVP Capital I and NVP Capital II are substantially identical except for names and dates) 4.13 Form of Supplemental Indenture between Nevada Power and IBJ Schroder Bank & Trust Company, as Debenture Trustee (Supplemental Indentures for NVP Capital I and NVP Capital II are substantially identical except for names and dates) 4.14 Form of Agreement as to Expenses and Liabilities between Nevada Power and NVP Capital I (Agreement in respect of NVP Capital II is substantially identical except for names and dates) 5.01 Opinion of Best Best & Krieger LLP, relating to the legality of the Junior Subordinated Debentures and the Guarantees (previously filed) 5.02 Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the legality of the Preferred Securities NVP Capital I and NVP Capital II (previously filed) 8.01 Opinion of Jones, Day, Reavis & Pogue as to certain United States federal income tax matters (previously filed) 12.01 Statement regarding Computation of Ratio of Earnings to Fixed Charges (previously filed) 23.01 Consent of Deloitte & Touche LLP (included in Part II of this Amendment No. 1 to Registration Statement).................................................................... 23.02 Consent of Best Best & Krieger LLP (included in Part II of this Amendment No. 1 to Registration Statement).................................................................... 23.03 Consent of Richard L. Hinckley, Esq. (included in Part II of this Amendment No. 1 to Registration Statement)....................................................................
II-11
SEQUENTIAL EXHIBIT NUMBERING NO. PAGE NO. - --------- --------------- 23.04 Consent of Richards, Layton & Finger, special Delaware counsel (included in Exhibit 5.02 hereto (previously filed)) 23.05 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 8.01 hereto (previously filed)) 25.01 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank & Trust Company, as Trustee for the Junior Subordinated Indenture............ 25.02 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank & Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of NVP Capital I................................................................. 25.03 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank & Trust Company, as Guarantee Trustee for the Guarantee for NVP Capital I....
In addition to those Exhibits shown above, Nevada Power hereby incorporates the following Exhibits pursuant to Exchange Act Rule 12b-32 and Regulation #201.24 by reference to the filings set forth below:
EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ----------- ------------------------------------------------------------------- --------------------- ----------- 4.1 Certificate of Designation of Cumulative Preferred Stock as follows: 5.40% Series..................................................... 2.1 to Form S-1 2-16968 5.20% Series..................................................... 2.1 to Form S-1 2-20618 4.70% Series..................................................... 3.2 to Form 8-K 1-4698 July 1965 8% Series........................................................ 2.1 to Form S-7 2-44513 8.70% Series..................................................... 2.1 to Form S-7 2-49622 11.50% Series.................................................... 2.1 to Form S-7 2-52238 9.75% Series..................................................... 2.1 to Form S-7 2-56788 Auction Series A................................................. 4.6 to Form S-3 33-15554 Auction Series A as amended November 14, 1991.................... 4.9 to Form S-3 33-44460 Auction Series A as amended December 12, 1991.................... 4.1 to Form 10-K 1-4698 Year 1992 9.90% Series..................................................... 4.1 to Form 10-K 1-4698 Year 1992 4.2 Indenture of Mortgage and Deed of Trust Providing for First Mortgage Bonds, dated October 1, 1953 and Twenty-Six Supplemental Indentures as follows: 4.2 to Form S-1 2-10932 First Supplemental Indenture, dated August 1, 1954............... 4.2 to Form S-1 2-11440 Second Supplemental Indenture, dated September 1, 1956........... 4.9 to Form S-1 2-12566 Third Supplemental Indenture, dated May 1, 1959.................. 4.13 to Form S-1 2-14949 Fourth Supplemental Indenture, dated October 1, 1960............. 4.5 to Form S-1 2-16968 Fifth Supplemental Indenture, dated December 1, 1961............. 4.6 to Form S-16 2-74929 Sixth Supplemental Indenture, dated October 1, 1963.............. 4.6A to Form S-1 2-21689 Seventh Supplemental Indenture, dated August 1, 1964............. 4.6B to Form S-1 2-22560 Eighth Supplemental Indenture, dated April 1, 1968............... 4.6C to Form S-9 2-28348 Ninth Supplemental Indenture, dated October 1, 1969.............. 4.6D to Form S-1 2-34588
II-12
EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ----------- ------------------------------------------------------------------- --------------------- ----------- Tenth Supplemental Indenture, dated October 1, 1970.............. 4.6E to Form S-7 2-38314 Eleventh Supplemental Indenture, dated November 1, 1972.......... 2.12 to Form S-7 2-45728 Twelfth Supplemental Indenture, dated December 1, 1974........... 2.13 to Form S-7 2-52350 Thirteenth Supplemental Indenture, dated October 1, 1976......... 4.14 to Form S-16 2-74929 Fourteenth Supplemental Indenture, dated May 1, 1977............. 4.15 to Form S-16 2-74929 Fifteenth Supplemental Indenture, dated September 1, 1978........ 4.16 to Form S-16 2-74929 Sixteenth Supplemental Indenture, dated December 1, 1981......... 4.17 to Form S-16 2-74929 Seventeenth Supplemental Indenture, dated August 1, 1982......... 4.2 to Form 10-K 1-4698 Year 1982 Eighteenth Supplemental Indenture, dated November 1, 1986........ 4.6 to Form S-3 33-9537 Nineteenth Supplemental Indenture, dated October 1, 1989......... 4.2 to Form 10-K 1-4698 Year 1989 Twentieth Supplemental Indenture, dated May 1, 1992.............. 4.21 to Form S-3 33-53034 Twenty-First Supplemental Indenture, dated June 1, 1992.......... 4.22 to Form S-3 33-53034 Twenty-Second Supplemental Indenture, dated June 1, 1992......... 4.23 to Form S-3 33-53034 Twenty-Third Supplemental Indenture, dated October 1, 1992....... 4.23 to Form S-3 33-53034 Twenty-Fourth Supplemental Indenture, dated October 1, 1992...... 4.23 to Form S-3 33-53034 Twenty-Fifth Supplemental Indenture, dated January 1, 1993....... 4.23 to Form S-3 33-53034 Twenty-Sixth Supplemental Indenture dated May 1, 1995............ 4.2 to Form 10-K 1-4698 Year 1995 4.3 Instrument of Further Assurance dated April 1, 1956 to Indenture of Mortgage and Deed of Trust dated October 1, 1953.................. 4.8 to Form S-1 2-12566 4.4 Rights Agreement dated October 15, 1990 between Manufacturers Hanover Trust Company and Nevada Power Company.................... 4.1 to Form 8-A 1-4698 Year 1990
II-13 EX-1.01 2 EXHIBIT 1.01 JDR&P Draft of March 10, 1997 March __, 1997 NVP CAPITAL I NVP CAPITAL II CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES (LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY) GUARANTEED TO THE EXTENT SET FORTH IN THE GUARANTEE BY NEVADA POWER COMPANY UNDERWRITING AGREEMENT BASIC PROVISIONS From time to time NVP Capital I or NVP Capital II, each a statutory business trust formed under the laws of the State of Delaware (each a "Trust" and collectively, the "Trusts"), and Nevada Power Company, a Nevada corporation, as depositor of each trust and as guarantor (the "Guarantor"), propose to issue and sell certain of the Trusts' preferred securities (the "Securities") representing undivided beneficial interests in the assets of such Trusts, guaranteed by the Guarantor to the extent set forth in the guarantee agreement (the "Guarantee Agreement") identified in the Terms Agreement (as defined below). The Trusts and the Guarantor propose to enter into one or more Terms Agreements (each a "Terms Agreement") in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, which shall provide that the Trust identified in the applicable Terms Agreement (such Trust being the "Designated Trust" with respect to such Terms Agreement) shall issue and sell the Securities to the firms named in Schedule I to the applicable Terms Agreement (such firms constituting the "Underwriters" with respect to such Terms Agreement and the Securities specified therein). The Securities specified in such Terms Agreement are referred to as the "Firm Designated Securities" with respect to such Terms Agreement. If so specified in such Terms Agreement, the Designated Trust may grant the Underwriters the right to purchase at their election an additional number of Securities, specified as provided in such Terms Agreement as provided in Section 2(b) hereof (the "Optional Designated Securities"). The Firm Designated Securities and any Optional Designated Securities are collectively called the "Designated Securities". The proceeds of the sale of the Designated Securities and of common securities of the Trust (the "Common Securities") sold to the Guarantor are to be invested in junior subordinated deferrable interest debentures of the Guarantor (the "Subordinated Debentures"), to be issued pursuant to a junior subordinated indenture to be dated as of March 1, 1997 (the "Indenture") between the Guarantor and IBJ Schroder Bank & Trust Company, as trustee. The Designated Securities may be exchangeable into Subordinated Debentures, as specified in Schedule II to such Terms Agreement. Pursuant to the Guarantee Agreement identified in the Terms Agreement relating to any particular issuance of Designated Securities, the Designated Securities will be guaranteed by the Guarantor to the extent set forth in such Terms Agreement (the "Guarantee"). The terms and rights of any particular issuance of Designated Securities shall be as specified in the Terms Agreement relating thereto and in or pursuant to the amended and restated trust agreement (the "Trust Agreement") identified in such Terms Agreement. Particular sales of Designated Securities may be made from time to time to the Underwriters of such Designated Securities, for whom the firms designated as representatives of the Underwriters of such Securities in the Terms Agreement relating thereto will act as representatives (the "Representatives"). The term "Representatives" may also refer to a single firm acting as sole representative of the Underwriters and to Underwriters who act without any firm being designated as their representative. These Underwriting Agreement Basic Provisions (this "Agreement") shall not be construed as an obligation of either Trust to issue or sell any of the Securities or as an obligation of any of the Underwriters to purchase any of the Securities. The obligation of any Trust to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase any of the Securities shall be evidenced by the Terms Agreement with respect to the Designated Securities specified therein. Each Terms Agreement shall specify the aggregate number of the Firm Designated Securities, the maximum number of Optional Designated Securities, if any, the initial public offering price of such Firm and Optional Designated Securities or the manner of determining such price, the terms of the Designated Securities, including the terms on which, and terms of the securities into which, the Designated Securities will be exchangeable, the purchase price to the Underwriters of such Designated Securities, the names of the Underwriters of such Designated Securities, the names of the Representatives of such Underwriters, the number of such Designated Securities to be purchased by each of the Underwriters and the commission, if any, payable to the Underwriters with respect thereto and shall set forth the date, time and manner of delivery of such Firm Designated Securities and Optional Designated Securities, if any, and payment therefor. The Terms Agreement shall also specify (to the extent not set forth in the registration statement and prospectus with respect thereto) the terms of such Designated Securities. A Terms Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under each Terms Agreement shall be several and not joint. Section 1. REPRESENTATIONS AND WARRANTIES. Each of the Trusts and the Guarantor, jointly and severally, represents and warrants to, and agrees with, each of the several Underwriters that: (a) The Trusts and the Guarantor meet the requirements for use of Form S-3 and a registration statement (Registration No. 333-21091) on Form S-3 relating to the Securities, the Subordinated Debentures and the Guarantees, including a preliminary prospectus and such amendments to such registration statement as may have been required to the date of this Agreement, has been prepared by the Trusts and the Guarantor under the provisions of the Securities Act of 1933, as amended (the "Act"), and the rules and regulations (collectively 2 referred to as the "1933 Act Regulations") of the Securities and Exchange Commission (the "Commission") thereunder, and has been filed with the Commission. No stop order suspending the effectiveness of such Registration Statement has been issued and no proceeding for the purpose has been initiated or threatened by the Commission. The term "preliminary prospectus" as used herein means a preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of the 1933 Act Regulations included at any time as part of the registration statement. Copies of such registration statement and amendments and of each related preliminary prospectus have been delivered to the Underwriters. If such registration statement has not become effective, a further amendment to such registration statement, including a form of final prospectus, necessary to permit such registration statement to become effective will be filed promptly by the Guarantor with the Commission. If such registration statement has become effective, a final prospectus containing information permitted to be omitted at the time of effectiveness by Rule 430A will be filed by the Guarantor with the Commission in accordance with Rule 424(b) of the 1933 Act Regulations promptly after execution and delivery of the Terms Agreement. The term "Registration Statement" means the registration statement as amended at the time it becomes or became effective (the "Effective Date"), including financial statements and all exhibits and any information deemed to be included by Rule 430A and/or Rule 434. The term "Prospectus" means the prospectus relating to the Securities, the Subordinated Debentures and the Guarantees in the form in which it has most recently been filed with the Commission on or before the date of the Agreement as first filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations. Any reference herein to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the "1934 Act"), on or before the Effective Date or the date of such preliminary prospectus or the Prospectus, as the case may be. If the Guarantor and the Trusts elect to rely on Rule 434 of the 1933 Act, all references to "Prospectus" shall be deemed to include, without limitation, the form of prospectus and the term sheet, taken together, provided to the Underwriters by the Guarantor and the Trusts in accordance with Rule 434 of the 1933 Act. Any registration statement relating to the Securities, Subordinated Debentures and the Guarantees (including any amendment or supplement thereto or information which is deemed part thereof) filed by the Guarantor and the Trusts under Rule 462(b) shall be deemed to be part of the "Registration Statement" as defined herein, and any prospectus (including any amendment or supplement thereto or information which is deemed part thereof) included in such registration statement shall be deemed to be part of the "Prospectus", as defined herein, as appropriate. Any reference herein to the terms "amend", "amendment" or "supplement" with respect to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to refer to and include the filing of any document under the 1934 Act after the Effective Date, or the date of any preliminary prospectus or the Prospectus, as the case may be, and deemed to be incorporated therein by reference. (b) On the Effective Date, the date the Prospectus is first filed with the Commission pursuant to Rule 424(b) (if required), at all times subsequent to and including each Time of Delivery and when any post-effective amendment to the Registration Statement becomes effective or any amendment or supplement to the Prospectus is filed with the Commission, the Registration Statement and the Prospectus (as amended or as supplemented if the Guarantor shall 3 have filed with the Commission any amendment or supplement thereto), including the financial statements included or incorporated by reference in the Prospectus, did or will comply in all material respects with all applicable provisions of the 1933 Act, the 1933 Act Regulations, the 1934 Act, the rules and regulations thereunder (the "1934 Act Regulations"), the Trust Indenture Act of 1939, as amended (the "1939 Act") and the rules and regulations thereunder (the "1939 Act Regulations") and will contain all statements required to be stated therein in accordance with the 1933 Act, the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations, the 1939 Act and the 1939 Act Regulations. On the Effective Date and when any post-effective amendment to the Registration Statement becomes effective, no part of the Registration Statement or any such amendment did or will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. At the Effective Date, the date the Prospectus or any amendment or supplement to the Prospectus is filed with the Commission and at each Time of Delivery, the Prospectus did not or will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing representations and warranties in this Section 1(b) do not apply to any statements or omissions made in reliance on and in conformity with information relating to any Underwriter furnished in writing to the Guarantor by the Underwriters through the Representatives specifically for inclusion in the Registration Statement or Prospectus or any amendment or supplement thereto. Except for any information relating to any Underwriter that Schedule II of a Terms Agreement specifically identifies as furnished in writing to the Guarantor by the Underwriters through the Representatives specifically for inclusion in the Registration Statement, the preliminary prospectus or the Prospectus, for all purposes of this Agreement, the amounts of the selling concession and reallowance set forth in the Prospectus constitute the only information relating to any Underwriter furnished in writing to the Guarantor by the Underwriters through the Representatives specifically for inclusion in the Registration Statement, the preliminary prospectus or the Prospectus. The Guarantor has not distributed any offering material in connection with the offering or sale of the Securities other than the Registration Statement, the preliminary prospectus, the Prospectus or any other materials, if any, permitted by the 1933 Act. (c) The documents which are incorporated by reference in the preliminary prospectus and the Prospectus or from which information is so incorporated by reference, when they become effective or were filed with the Commission, as the case may be, complied in all material respects with the requirements of the 1933 Act or the 1934 Act, as applicable, the 1933 Act Regulations and the 1934 Act Regulations; and any documents so filed and incorporated by reference subsequent to the Effective Date shall, when they are filed with the Commission, conform in all material respects with the requirements of the 1933 Act and the 1934 Act, as applicable, the 1933 Act Regulations and the 1934 Act Regulations. (d) The only subsidiaries (as defined in the 1933 Act Regulations) of the Guarantor are the subsidiaries listed on Schedule A hereto (the "subsidiaries"). The Guarantor and each of its subsidiaries is, and at each Time of Delivery will be, a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. The Guarantor and each of its subsidiaries has, and at each Time of Delivery will have, full power and 4 authority to conduct all the activities conducted by it, to own or lease all the assets owned or leased by it and to conduct its business as described in the Registration Statement and the Prospectus. Each Trust is, and at each Time of Delivery will be, a business trust duly organized, validly existing and in good standing under the laws of the State of Delaware. Each Trust has, and at each Time of Delivery will have, full power and authority to conduct all the activities conducted by it, to own or lease all the assets owned or leased by it and to conduct its business as described in the Registration Statement and the Prospectus. The Guarantor and each of its subsidiaries is, and each Time of Delivery will be, duly licensed or qualified to do business and in good standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted by it or the character of the assets owned or leased by it makes such licensing or qualification necessary. Complete and correct copies of the articles of incorporation and of the by-laws of the Guarantor and each of its subsidiaries and all amendments thereto have been delivered to the Underwriters, and no changes therein will be made subsequent to the date hereof and prior to each Time of Delivery. (e) The outstanding beneficial interests in each Designated Trust have been duly authorized, validly issued, fully paid and nonassessable. The description of such beneficial interests in the Registration Statement and the Prospectus is, and at each Time of Delivery will be, complete and accurate in all respects. All of the issued and outstanding capital stock of each subsidiary has been duly authorized and validly issued and is fully paid and non-assessable, and all of such capital stock owned by the Guarantor, directly or through subsidiaries, is owned free and clear of any mortgage, pledge, lien, encumbrance, claim or equity. (f) The financial statements included or incorporated by reference in the Registration Statement or the Prospectus present fairly the consolidated financial condition of the Guarantor as of the respective dates thereof and the consolidated results of operations and cash flows of the Guarantor for the respective periods covered thereby, all in conformity with generally accepted accounting principles applied on a consistent basis throughout the entire period involved, except as otherwise disclosed in the Prospectus. No other financial statements or schedules of the Guarantor are required by the 1933 Act, the 1934 Act, the 1933 Act Regulations or the 1934 Act Regulations to be included in the Registration Statement or the Prospectus. Deloitte & Touche LLP (the "Accountants"), who have reported on such financial statements and schedules, are independent accountants with respect to the Guarantor as required by the 1933 Act and the 1933 Act Regulations. The statements included in the Registration Statement with respect to the Accountants pursuant to Item 509 of Regulation S-K of the 1933 Act Regulations are true and correct in all material respects. (g) The Guarantor maintains a system of internal accounting control sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to 5 maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (h) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus and prior to each Time of Delivery, except as set forth in or contemplated by the Registration Statement and the Prospectus, (i) there has not been and will not have been any material change in the capitalization of the Guarantor, either Trust or any of the Guarantor's subsidiaries, or in the business, properties, business prospects, condition (financial or otherwise) or results of operations of the Guarantor and its subsidiaries, arising for any reason whatsoever, (ii) neither the Guarantor nor any of its subsidiaries has incurred nor will it incur any material liabilities or obligations, direct or contingent, nor has it entered into nor will it enter into any material transactions other than pursuant to this Agreement and the transactions referred to herein and (iii) the Guarantor has not and will not have paid or declared any dividends (except for regular quarterly dividends in an amount consistent with past practice) or other distributions of any kind on any class of its capital stock. (i) Neither Trust nor the Guarantor is, nor after giving effect to the offering and sale of the Securities, will be, an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act"). (j) Except as set forth in the Registration Statement and the Prospectus, there are no actions, suits or proceedings pending or threatened against or affecting the Guarantor or any of its subsidiaries or any of their respective officers in their capacity as such, before or by any Federal or state court, commission, regulatory body, administrative agency or other governmental body, domestic or foreign, wherein an unfavorable ruling, decision or finding might materially and adversely affect the Guarantor or any of its subsidiaries or its business, properties, business prospects, condition (financial or otherwise) or results of operations or materially and adversely affect the Guarantor's ability to consummate the transactions contemplated by the applicable Terms Agreement to which this Agreement is attached and of which it forms a part or the Guarantor Agreements (as defined below). (k) The Guarantor and each of its subsidiaries has, and at each Time of Delivery will have, (i) all governmental licenses, permits, consents, orders, approvals and other authorizations necessary to carry on its business as contemplated in the Prospectus, (ii) complied in all material respects with all laws, regulations and orders applicable to it or its business and (iii) performed all its material obligations required to be performed by it, and is not, and at each Time of Delivery will not be, in default, under any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement, lease, contract or other agreement or instrument that is material to the Guarantor and its subsidiaries, taken as a whole, (collectively, a "material contract or other material agreement") to which the Guarantor or any subsidiary is a party or by which its property is bound or affected. To the best knowledge of the Guarantor and each of its subsidiaries, no other party under any material contract or other material agreement to which the Guarantor or any subsidiary is a party is in default in any respect thereunder. Neither the Guarantor nor any of its subsidiaries is, nor 6 at each Time of Delivery will any of them be, in violation of any provision of its articles of incorporation or by-laws. (l) No consent, approval, authorization or order of, or any filing or declaration with, any court or governmental agency or body is required in connection with (i) the issuance and sale of the Securities and the Common Securities by either Trust, (ii) the purchase of the Subordinated Debentures by such Trust, (iii) the issuance of the Guarantees or the Subordinated Debentures by the Guarantor, or (iv) the consummation by either Trust or the Guarantor of the transactions contemplated by (A) any Terms Agreement to which this Agreement is attached and of which it forms a part, (B) any Overallotment Option (as defined in Section 2(b) hereof), or (C) any Guarantor Agreement (other than an approving Order of the Public Service Commission of Nevada, which has been obtained and is in full force and effect), except such as have been obtained under the 1933 Act or the 1933 Act Regulations and such as may be required under the by-laws and rules of the National Association of Securities Dealers, Inc. (the "NASD") in connection with the purchase and distribution by the Underwriters of the Securities. (m) Each of the Guarantor and the Designated Trust has full corporate power and authority to enter into this Agreement and any applicable Terms Agreement to which this Agreement is attached. This Agreement has been and any applicable Terms Agreement to which this Agreement is attached, when executed and delivered, will be, duly authorized, executed and delivered by the Guarantor and the Designated Trust and each constitutes a valid and binding agreement of the Guarantor and the Designated Trust and is enforceable against the Guarantor and the Designated Trust in accordance with the terms hereof or thereof, as the case may be, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. The performance of this Agreement and the consummation of the transactions contemplated hereby will not result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Guarantor or any of its subsidiaries pursuant to the terms or provisions of, or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give any other party a right to terminate any of its obligations under, or result in the acceleration of any obligation under, the articles of incorporation or by-laws of the Guarantor or any of its subsidiaries, any material contract or other material agreement to which the Guarantor or any of its subsidiaries is a party or by which the Guarantor or any of its subsidiaries or any of its properties is bound or affected, or violate or conflict with any judgment, ruling, decree, order, statute, rule or regulation of any court or other governmental agency or body applicable to the business or properties of the Guarantor or any of its subsidiaries. (n) The Designated Securities have been duly and validly authorized, and (i) when the Firm Designated Securities are issued and delivered pursuant to the Terms Agreement with respect to such Designated Securities to which this Agreement is attached and of which it forms a part and, (ii) in the case of any Optional Designated Securities, when such Optional Designated Securities are issued and delivered pursuant to Overallotment Options with respect to such Securities, such Designated Securities will be duly and validly issued and fully paid and non-assessable beneficial interests in the Designated Trust, entitled to the benefits provided by the applicable Trust Agreement, which Trust Agreement will be substantially in the form filed 7 as an exhibit to the Registration Statement; and the Securities conform in all material respects to the description thereof contained in the Registration Statement; and the Designated Securities conform in all material respects to the description thereof contained in the Prospectus as amended or supplemented with respect to such Designated Securities. (o) The holders of the Designated Securities (the "Securityholders") will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. (p) The Common Securities of the Designated Trust have been duly authorized by such Designated Trust and upon delivery by such Designated Trust to the Guarantor against payment therefor as set forth in the Trust Agreement, will be duly and validly issued and non-assessable beneficial interests in such Designated Trust and will conform in all material respects to the description thereof contained in the Prospectus; the issuance of the Common Securities is not subject to preemptive or other similar rights; the Common Securities conform in all material respects to the description thereof contained in the Registration Statement; and at each Time of Delivery, all of the issued and outstanding Common Securities of each Designated Trust will be directly owned by the Guarantor, or a person into which the Guarantor has merged or with which the Guarantor has been consolidated pursuant to Section 801 of the Indenture, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. (q) The Subordinated Debentures have been duly authorized and, when issued and delivered pursuant to the Indenture, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Guarantor entitled to the benefits of the Indenture, which will be substantially in the form filed as an exhibit to the Registration Statement; the Guarantees have been duly authorized and, when issued and delivered pursuant to each Guarantee Agreement, will have been duly issued and delivered and will constitute valid and legally binding obligations of the Guarantor entitled to the benefits of the applicable Guarantee Agreement, which will be substantially in the form filed as an exhibit to the Registration Statement; the Indenture, the Trust Agreements and the Guarantee Agreements (collectively, the "Guarantor Agreements") have been duly authorized and duly qualified under the 1939 Act and, when executed and delivered by the Guarantor and, (i) in the case of each Guarantee Agreement, by the Guarantee Trustee (as defined in the Guarantee Agreement), (ii) in the case of each Trust Agreement, by the Trustees (as defined in the Trust Agreement) and, (iii) in the case of the Indenture, by the trustee named therein (the "Debenture Trustee"), will constitute valid and legally binding instruments, enforceable in accordance with their respective terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Guarantees, the Subordinated Debentures and the Guarantor Agreements will conform in all material respects to the descriptions thereof in the Prospectus. (r) Neither (i) the issuance and sale of the Securities by the applicable Trust, (ii) the compliance by such Trust with all of the provisions of any Terms Agreement to which this Agreement is attached and of which it forms a part, each Overallotment Option, if any, the Designated Securities and each Trust Agreement, (iii) the execution, delivery and performance by the applicable Trust of the Trust Agreement, nor (iv) the consummation of the transactions 8 contemplated herein or therein will conflict with or constitute a breach of, or default under, or result in the creation, imposition or violation of any lien, charge or encumbrance upon any property or assets of such Trust pursuant to, (A) the Trust Agreement of such Trust, (B) any law, administrative regulation or administrative or court order or decree applicable to such Trust, (C) any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which such Trust is a party or by which such Trust is bound or to which any of the property or assets of such Trust is subject, where, in each such case, such conflict, breach or default, or lien, charge or encumbrance would have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of such Trust. (s) Neither (i) the issuance by the Guarantor of the Guarantees and the Subordinated Debentures, (ii) the compliance by the Guarantor with all of the provisions of any Terms Agreement to which this Agreement is attached and forms a part and each Overallotment Option, if any, the Guarantees, the Subordinated Debentures and the Guarantor Agreements, (iii) the execution, delivery and performance by the Guarantor of the Guarantor Agreements, nor (iv) the consummation of the transactions contemplated herein or therein will conflict with or constitute a breach of, or default under, or result in the creation, imposition or violation of any lien, charge or encumbrance upon any property or assets of the Guarantor or any of its subsidiaries pursuant to, (A) the charter or by-laws of the Guarantor, (B) any law, administrative regulation or administrative or court order or decree applicable to the Guarantor, (C) any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Guarantor or any such subsidiary is a party or by which it or any of them is bound or to which any of the property or assets of the Guarantor or any such subsidiary is subject, where, in each such case, such conflict, breach or default, or lien, charge or encumbrance would have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Guarantor and its subsidiaries considered as one enterprise. (t) The Guarantor and each of its subsidiaries has good and marketable title to all properties and assets described in the Prospectus as owned by it, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Prospectus or are not material to the business of the Guarantor or its subsidiaries. The Guarantor and each of its subsidiaries has valid, subsisting and enforceable leases for the properties described in the Prospectus as leased by it, with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such properties by the Guarantor and such subsidiaries. (u) There is no document or contract of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required. All such contracts to which the Guarantor or any subsidiary is a party have been duly authorized, executed and delivered by the Guarantor or such subsidiary, constitute valid and binding agreements of the Guarantor or such subsidiary and are enforceable against the Guarantor or such subsidiary in accordance with the terms thereof, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. 9 (v) No statement, representation, warranty or covenant made by the Guarantor or any Trust in this Agreement or made in any certificate or document required by this Agreement to be delivered to the Underwriters was or will be, when made, inaccurate, untrue or incorrect. (w) Neither the Guarantor nor any of its directors, officers or controlling persons has taken directly or indirectly any action intended, or which might reasonably be expected, to cause or result, under the 1933 Act or otherwise, in, or which has constituted, stabilization or manipulation of the price of any security of the Guarantor to facilitate the sale or resale of the Securities. (x) No holder of securities of the Guarantor has rights to the registration of any securities of the Guarantor because of the filing of the Registration Statement. (y) Neither the Guarantor nor any of its subsidiaries is involved in any material labor dispute nor, to the knowledge of the Guarantor, is any such dispute threatened. (z) Neither the Guarantor nor any of its subsidiaries nor, to the Guarantor's knowledge, any employee or agent of the Guarantor or any subsidiary has made any payment of funds of the Guarantor or any subsidiary or received or retained any funds in violation of any law, rule or regulation or of a character required to be disclosed in the Prospectus. Section 2. PURCHASE AND SALE. (a) Upon the execution of the Terms Agreement applicable to any Designated Securities and authorization by the Representatives of the release of the Firm Designated Securities, the several Underwriters propose to offer such Firm Designated Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented in relation to such Designated Securities. (b) The Designated Trust may specify in the Terms Agreement applicable to any Designated Securities that the Designated Trust thereby grants to the several Underwriters the right (an "Overallotment Option") to purchase at their election up to the number of Optional Designated Securities set forth in such Terms Agreement, on the terms set forth in the paragraph next above, for the sole purpose of covering over-allotments in the sale of the Firm Designated 10 Securities. Any such election to purchase Optional Designated Securities may be exercised by written notice from the Representatives to the Designated Trust and the Guarantor, given within a period specified in the Terms Agreement, setting forth the aggregate number of Optional Designated Securities to be purchased and the date on which such Optional Designated Securities are to be delivered, as determined by the Representatives, but in no event earlier than the First Time of Delivery (as defined in Section 2(c) hereof) or, unless the Representatives, the Designated Trust and the Guarantor otherwise agree in writing, earlier than or later than the respective number of business days after the date of such notice set forth in such Terms Agreement. The number of Optional Designated Securities to be added to the number of Firm Designated Securities to be purchased by each Underwriter as set forth in Schedule I to the Terms Agreement applicable to such Designated Securities shall be, in each case, the number of Optional Designated Securities which the Designated Trust and the Guarantor have been advised by the Representatives have been attributed to such Underwriter; provided that, if the Designated Trust and the Guarantor have not been so advised, the number of Optional Designated Securities to be so added shall be, in each case, that proportion of Optional Designated Securities which the number of Firm Designated Securities to be purchased by such Underwriter under such Terms Agreement bears to the aggregate number of Firm Designated Securities (rounded as the Representatives may determine to the nearest 100 securities). The total number of Designated Securities to be purchased by all the Underwriters pursuant to such Terms Agreement shall be the aggregate number of Firm Designated Securities set forth in Schedule I to such Terms Agreement plus the aggregate number of Optional Designated Securities which the Underwriters elect to purchase. (c) Certificates for the Firm Designated Securities and the Optional Designated Securities to be purchased by each Underwriter pursuant to the Terms Agreement relating thereto, in the form specified in such Terms Agreement, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours' prior notice to the Designated Trust and the Guarantor, shall be delivered by or on behalf of the Designated Trust to the Representatives for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by wire transfer of immediately available funds to an account designated by the Designated Trust, payable to the order of the Designated Trust in the funds specified in such Terms Agreement, (i) with respect to the Firm Designated Securities, all in the manner and at the place and time and date specified in such Terms Agreement or at such other place and time and date as the Representatives, the Designated Trust and the Guarantor may agree upon in writing, such time and date being herein called the "First Time of Delivery" and (ii) with respect to the Optional Designated Securities, if any, in the manner and at the time and date specified by the Representatives in the written notice given by the Representatives of the Underwriters' election to purchase such Optional Designated Securities, or at such other time and date as the Representatives, the Designated Trust and the Guarantor may agree upon in writing, such time and date, if not the First Time of Delivery, herein called the "Second Time of Delivery". Each such time and date for delivery is herein called a "Time of Delivery". 11 Section 3. COVENANTS OF THE DESIGNATED TRUST AND THE GUARANTOR. Each of the Designated Trust and the Guarantor, jointly and severally, agrees with each of the several Underwriters of any Designated Securities: (a) To prepare the Prospectus as amended and supplemented in relation to the applicable Designated Securities in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b); to not, either prior to the Effective Date or thereafter during such period as the Prospectus is required by law to be delivered in connection with sales of the Securities by an Underwriter or dealer, file any amendment or supplement to the Registration Statement or the Prospectus, unless a copy thereof shall first have been submitted to the Underwriters within a reasonable period of time prior to the filing thereof and the Underwriters shall not have objected thereto in good faith. (b) To use its best efforts to cause the Registration Statement to become effective, and to notify the Underwriters promptly, and to confirm such advice in writing, (i) when the Registration Statement has become effective and when any post-effective amendment thereto becomes effective, (ii) of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose or the threat thereof, (iv) of the happening of any event during the period mentioned in the second sentence of section 3(e) that in the judgment of the Guarantor makes any statement made in the Registration Statement or the Prospectus untrue or that requires the making of any changes in the Registration Statement or the Prospectus in order to make the statements therein, in the light of the circumstances in which they are made, not misleading and (v) of receipt by the Guarantor or any representative or attorney of the Guarantor of any other communication from the Commission relating to the Guarantor, the Registration Statement, any preliminary prospectus or the Prospectus; if at any time the Commission shall issue any order suspending the effectiveness of the Registration Statement, to make every reasonable effort to obtain the withdrawal of such order at the earliest possible moment; if the Guarantor has omitted any information from the Registration Statement pursuant to Rule 430A, to use its best efforts to comply with the provisions of and make all requisite filings with the Commission pursuant to said Rule 430A and to notify the Underwriters promptly of all such filings. (c) To furnish to the Underwriters, without charge, three signed copies of the Registration Statement and of any post-effective amendment thereto, including financial statements and schedules, and all exhibits thereto (including any document filed under the 1934 Act and deemed to be incorporated by reference into the Prospectus), and to furnish to the Underwriters without charge a copy of the Registration Statement and any post-effective amendment thereto, including financial statements and schedules but without exhibits. (d) To comply with all the provisions of any undertakings contained in the Registration Statement. (e) On the Effective Date, and thereafter from time to time, to deliver to each of the Underwriters, without charge, as many copies of the Prospectus or any amendment or 12 supplement thereto as the Underwriters may reasonably request; if during such period of time any event shall occur which in the judgment of the Guarantor or counsel to the Underwriters should be set forth in the Prospectus in order to make any statement therein, in the light of the circumstances under which it was made, not misleading, or if it is necessary to supplement or amend the Prospectus to comply with law, to forthwith prepare and duly file with the Commission an appropriate supplement or amendment thereto, and to deliver to each of the Underwriters, without charge, such number of copies thereof as the Underwriters may reasonably request; to not file any document under the 1934 Act before the termination of the offering of the Securities by the Underwriters if such document would be deemed to be incorporated by reference into the Prospectus which is not approved by the Underwriters after reasonable notice thereof. Each of the Designated Trust and the Guarantor consents to the use of the Prospectus or any amendment or supplement thereto by the several Underwriters and by all dealers to whom the Securities may be sold, both in connection with the offering or sale of the Securities and for any period of time thereafter during which the Prospectus is required by law to be delivered in connection therewith. (f) Prior to any public offering of the Securities by the Underwriters, to cooperate with the Underwriters and counsel to the Underwriters in connection with the registration or qualification of the Securities or the Subordinated Debentures issuable upon the exchange of the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Underwriters may request; provided, that in no event shall the Guarantor be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to general service of process in any jurisdiction where it is not now so subject. (g) During the period of five years commencing on the Effective Date, to furnish to the Underwriters copies of such financial statements and other periodic and special reports as the Guarantor may from time to time distribute generally to the holders of any class of its capital stock, and to furnish to the Underwriters a copy of each annual or other report it is required to file with the Commission. (h) In the case of the Guarantor, to timely file such reports pursuant to the 1934 Act as are necessary to make generally available to holders of its securities, as soon as may be practicable , an earnings statement (which need not be audited but shall be in reasonable detail) for a period of 12 months ended commencing after the Effective Date, and satisfying the provisions of Section 11(a) of the 1933 Act (including Rule 158 of the 1933 Act Regulations). (i) If this Agreement is terminated by the Guarantor or any Trust pursuant to any of the provisions hereof (otherwise than pursuant to Section 8) or if for any reason the Guarantor or any Trust shall be unable to perform its obligations hereunder, to reimburse the several Underwriters for all out-of-pocket expenses (including the fees, disbursements and other charges of counsel to the Underwriters) reasonably incurred by them in connection herewith. (j) To not at any time, directly or indirectly, take any action intended, or which might reasonably be expected, to cause or result in, or which will constitute, stabilization of the price of the Securities to facilitate the sale or resale of any of the Securities. 13 (k) In the case of each Trust, to apply the net proceeds from the offering and sale of the Securities to be sold by such Trust and, in the case of the Guarantor, to apply the net proceeds from the offering and sale of the Subordinated Debentures to be sold by the Guarantor, in the manner set forth in the Prospectus, as amended or supplemented, under "Use of Proceeds". (l) In the case of the Guarantor, to file promptly all reports and any definitive proxy or information statements required to be filed by the Guarantor with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act for so long as the delivery of a prospectus is required in connection with the offering or sale of such Securities. (m) During the period beginning from the date of the Terms Agreement for such Designated Securities and continuing to and including the earlier of (i) the termination of trading restrictions for such Designated Securities, as notified to the Designated Trust and the Guarantor by the Representatives and (ii) 30 days after the last Time of Delivery for such Designated Securities, not to offer, sell, contract to sell or otherwise dispose of, except as provided hereunder, any Securities, any other beneficial interests in the assets of the Designated Trust, or any preferred securities or any other securities of the Designated Trust or the Guarantor, as the case may be, that are substantially similar to such Designated Securities (including any guarantee of such securities) or any securities that are convertible into or exchangeable for, or that represent the right to receive Securities, other beneficial interests of the Designated Trust, preferred securities or any such substantially similar securities of either the Designated Trust or the Guarantor (including any guarantee of such securities) without the prior written consent of the Representatives. (n) In the case of the Guarantor, to issue the Guarantee concurrently with the issuance and sale of the Securities as contemplated herein or in the Terms Agreement. (o) To list for quotation the Securities on the New York Stock Exchange. Section 4. PAYMENT OF EXPENSES. The Guarantor covenants and agrees with the several Underwriters that it will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Guarantor's counsel and accountants in connection with the registration of the Securities, the Guarantees and the Subordinated Debentures under the 1933 Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, any Terms Agreement, any Guarantor Agreement, the Securities and the Subordinated Debentures and any Blue Sky Memorandum; (iii) all reasonable expenses in connection with the qualification of the Securities, the Guarantees and the Subordinated Debentures for offering and sale under state securities laws as provided in Section 3(f) hereof, including the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey(s); (iv) any fees charged by securities rating services for rating the Securities and the Subordinated Debentures; (v) any filing fees incident to, and the reasonable fees and 14 disbursements of counsel for the Underwriters in connection with, any required reviews by the NASD of the terms of the sale of the Securities and the issuance of the Guarantees and the Subordinated Debentures; (vi) the cost of preparing the Securities and the Subordinated Debentures; (vii) the reasonable fees and expenses of any Trustee, Debenture Trustee and Guarantee Trustee, and any agent of any trustee and the reasonable fees and disbursements of counsel for any trustee in connection with any Trust Agreement, Indenture, Guarantee and the Securities; (viii) the cost of qualifying the Securities with The Depository Trust Company; (ix) any fees and expenses in connection with listing the Securities on the New York Stock Exchange and the cost of registering the Securities under Section 12 of the 1934 Act; and (x) all other costs and expenses incident to the performance of its obligations hereunder and under any Overallotment Options which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 6 and 8 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make. Section 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters of any Designated Securities under the Terms Agreement relating to such Designated Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties and other statements of the Designated Trust and the Guarantor in or incorporated by reference in the Terms Agreement relating to such Designated Securities are, at and as of each Time of Delivery for such Designated Securities, true and correct, the condition that the Designated Trust and the Guarantor shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus as amended or supplemented in relation to such Designated Securities shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the 1933 Act and the 1933 Act Regulations and in accordance with Section 3(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction. (b) Jones, Day, Reavis & Pogue, counsel for the Underwriters, shall have furnished to the Representatives such opinion or opinions, dated each Time of Delivery for such Designated Securities, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. (c) Best, Best & Krieger LLP, as counsel for the Guarantor and the Trusts, shall have furnished to the Representatives their written opinions, dated each Time of Delivery for such Designated Securities, respectively, in form and substance reasonably satisfactory to the Representatives, to the effect that: 15 (i) The Guarantor and each of its subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, is duly licensed or qualified to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted by it or the character of the assets owned or leased by it makes such license or qualification necessary, has full power and authority to conduct all the activities conducted by it, to own or lease all the assets owned or leased by it and to conduct its business as described in the Registration Statement and the Prospectus and has all governmental licenses, permits, consents, orders, approvals and other authorizations necessary to carry on its business as contemplated in the Prospectus. The Guarantor is the sole record and beneficial owner of all of the capital stock of each of its subsidiaries. (ii) The Subordinated Debentures, in the form certified by the Guarantor to be true and correct copies, are in the form prescribed in or pursuant to the Indenture, have been duly authorized by the Guarantor and, when authenticated, issued and delivered by the Guarantor as specified in or pursuant to the Indenture, will be valid and binding obligations of the Guarantor and, subject to applicable bankruptcy laws, are enforceable against the Guarantor in accordance with the terms thereof, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. (iii) No consent, approval, authorization or order of, or any filing or declaration with, any court or governmental agency or body is required in connection with the issuance and sale of the Designated Securities being delivered at such Time of Delivery or the issuance of the Guarantee and the Subordinated Debentures or the consummation by the Designated Trust or the Guarantor of the transactions contemplated by the Terms Agreement to which this Agreement is attached and forms a part and the Guarantor Agreements, or in connection with the taking by the Guarantor of any action contemplated thereby other than an approving order of the Public Service Commission of Nevada, which has been obtained and is in full force and effect, except such as have been obtained under the 1933 Act, the 1933 Regulations, the 1939 Act and the 1939 Act Regulations. (iv) The statements set forth in the Prospectus under the caption "Certain Terms of Series A QUIPS", "Certain Terms of Series A QUIDS", "Description of QUIDS", "Description of QUIPS", "Description of Guarantees", "Description of Corresponding QUIDS" and "Relationship Among the QUIPS, the Corresponding QUIDS and the Guarantees" insofar as they purport to summarize certain provisions of documents or securities specifically referred to therein, are accurate summaries of such provisions in all material respects. (v) The Registration Statement and the Prospectus (including any documents incorporated by reference into the Prospectus at the time they were filed) comply or complied in all material respects as to form with the requirements of the 16 1933 Act, the 1934 Act, the 1933 Act Regulations, the 1934 Act Regulations, the 1939 Act and the 1939 Act Regulations (except that such counsel need express no opinion as to financial statements, schedules and other financial and statistical data contained in the Registration Statement or the Prospectus or incorporated by reference therein). (vi) Such counsel has participated in the preparation of the Registration Statement and the Prospectus and nothing has come to such counsel's attention which has caused them to believe that, as of the Effective Date, the date of the Prospectus and such Time of Delivery, either the Registration Statement or the Prospectus, or any amendment or supplement thereto including any documents incorporated by reference into the Prospectus, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances in which they were made (except that such counsel need express no opinion as to financial statements, schedules and other financial or statistical data contained in the Registration Statement or the Prospectus or incorporated by reference therein). (vii) The Registration Statement has become effective under the 1933 Act and, to the best of such counsel's knowledge, no order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or is threatened, pending or contemplated. (viii) Such counsel has reviewed all contracts and other documents referred to in the Registration Statement and the Prospectus and such contracts or other documents are fairly summarized or disclosed therein, and filed as exhibits thereto as required, and, after due inquiry, such counsel does not know of any contracts or other documents required to be so summarized or disclosed or filed or required to be filed under the 1934 Act if upon such filing they would be incorporated, in whole or in part, by reference therein which have not been so summarized or disclosed or filed. (ix) All descriptions in the Prospectus of statutes, regulations or legal or governmental proceedings are accurate and fairly present the information required to be shown. (x) The Guarantor has full corporate power and authority to enter into this Agreement, the Terms Agreement with respect to the Designated Securities and each of the Guarantor Agreements, and each of this Agreement, the Terms Agreement with respect to the Designated Securities and each of the Guarantor Agreements is a valid and binding agreement of the Guarantor and, except for the indemnification and contribution provisions of this Agreement, as to which such counsel need express no opinion, is enforceable against the Guarantor in accordance with the terms thereof, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles . 17 (xi) The Guarantor has full corporate power and authority to execute the Guarantee, and the Guarantee has been duly authorized and, when issued and delivered pursuant to the Terms Agreement to which this Agreement is a part, will have been duly executed, issued and delivered by the Guarantor and will be a valid and binding obligation of Guarantor and, subject to applicable bankruptcy laws, will be enforceable against the Guarantor in accordance with its terms. (xii) Delivery of certificates for the Securities will pass valid and marketable title thereto to each Underwriter that has purchased such Securities in good faith and we are not aware, after due inquiry, of any adverse claim with respect thereto, and such Securities are free and clear of all liens, encumbrances and claims. (xiii) To the best of such counsel's knowledge, neither the Guarantor nor any of its subsidiaries is in violation of its articles of incorporation, by-laws or other charter documents or in default (nor has an event occurred which with notice or lapse of time or both would constitute a default or acceleration) in the performance of any obligation, agreement or condition contained in any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement or other evidence of indebtedness, lease, contract or other agreement or instrument known to such counsel to which the Guarantor or any of its subsidiaries is a party or by which it or its properties is bound or affected and neither the Guarantor nor any of its subsidiaries is in violation of any judgment, ruling, decree, order, franchise, license or permit known to such counsel or any statute, rule or regulation of any court or other governmental agency or body applicable to the business or properties of the Guarantor or any of its subsidiaries, where such violation or default might have a material adverse effect on the business, properties, business prospects, condition (financial or otherwise) or results of operations of the Guarantor or any of its subsidiaries, taken as a whole. (xiv) The issuance by the Guarantor of the Guarantee and the Subordinated Debentures, the compliance by the Guarantor with all of the provisions of the Terms Agreement to which this Agreement is attached and forms a part and the Guarantor Agreements, the execution, delivery and performance by the Guarantor of the Terms Agreement to which this Agreement is attached and forms a part and the Guarantor Agreements and the consummation of the transactions herein and therein contemplated do not and will not result in a breach or violation of any terms or provisions of the articles of incorporation or by-laws of the Guarantor or any of its subsidiaries. (xv) Neither the Designated Trust nor the Guarantor is an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company", as such terms are defined in the 1940 Act. (xvi) The Designated Securities have been duly authorized for listing by the New York Stock Exchange upon official notice of issuance. (xvii) The Indenture, each of the Trust Agreements and each of the Guarantees is qualified under the 1939 Act. 18 (d) Richard L. Hinckley, Esq., Vice President, Secretary and Chief Counsel of the Guarantor, shall have furnished to the Representatives his written opinions, dated each Time of Delivery for such Designated Securities, respectively, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Section 5(c)(i), (iii), (vi), (x), (xi), (xiii) and (xiv) and to the effect that: (i) The Subordinated Debentures, in the form certified by the Guarantor to be true and correct copies, are in the form prescribed in or pursuant to the Indenture and have been duly authorized by the Guarantor. (ii) All of the issued and outstanding capital stock of each subsidiary has been duly authorized and validly issued and is fully paid and non-assessable, and all of such capital stock owned by the Guarantor, directly or through subsidiaries, is owned free and clear of any mortgage, pledge, lien, encumbrance, claim or equity. (iii) Such counsel knows of no actions, suits or proceedings pending or threatened against or affecting the Guarantor or any of its subsidiaries or the business, properties, business prospects, condition (financial or otherwise) or results of operations of the Guarantor or any of its subsidiaries, or any of their respective officers in the capacities as such, before or by any federal or state court, commission, regulatory body, administrative agency or other governmental body, wherein an unfavorable ruling, decision or finding might materially and adversely affect the Guarantor and its subsidiaries, taken as a whole, or their business, properties, business prospects, condition (financial or otherwise) or results of operations, taken as a whole, except as set forth in or contemplated by the Registration Statement and the Prospectus. (iv) The issuance and sale of the Designated Securities being delivered at such Time of Delivery and the compliance by the Designated Trust with all of the provisions of the Terms Agreement to which this Agreement is attached and forms a part, the Designated Securities and the Trust Agreement with respect to the Designated Securities, the purchase by the Designated Trust of the Subordinated Debentures, the execution and delivery of this Agreement by the Designated Trust, the compliance by the Designated Trust with the terms of this Agreement and the consummation of the transactions contemplated herein and in the Trust Agreement do not and will not result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Designated Trust pursuant to the terms or provisions of, or result in a breach or violation of any of the terms or provisions of, or constitute a default or result in the acceleration of any obligation under, the Trust Agreement, any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement or other evidence of indebtedness, lease, contract or other agreement or instrument known to such counsel to which such Designated Trust is a party or by which it or any of its properties is bound or affected, or any judgment, ruling, decree, order, statute, rule or regulation of any court or other governmental agency or body applicable to the business or property of such Designated Trust. (v) The issuance by the Guarantor of the Guarantee and the Subordinated Debentures, the compliance by the Guarantor with all of the provisions of 19 the Terms Agreement to which this Agreement is attached and forms a part and the Guarantor Agreements, the execution, delivery and performance by the Guarantor of the Guarantor Agreements and the consummation of the transactions herein and therein contemplated do not and will not result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Guarantor or any of its subsidiaries pursuant to the terms or provisions of, or result in a breach or violation of any of the terms or provisions of, or constitute a default or result in the acceleration of any obligation under, the articles of incorporation, or by-laws of the Guarantor or any of its subsidiaries, any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement or other evidence of indebtedness, lease, contract or other agreement or instrument known to such counsel to which the Guarantor or any of its subsidiaries is a party or by which it or any of its properties is bound or affected, or any judgment, ruling, decree, order, statute, rule or regulation of any court or other governmental agency or body applicable to the business or property of the Guarantor or any of its subsidiaries, where such creation or imposition, breach or violation or default or acceleration might have a material adverse effect on the business, properties, business prospects, condition (financial or otherwise) or results of operations of the Guarantor or any of its subsidiaries, taken as a whole. (e) Richards, Layton & Finger, special Delaware Counsel to the Designated Trust and the Guarantor, shall have furnished to you, the Guarantor and the Designated Trust their written opinion, dated the respective Time of Delivery, in form and substance satisfactory to you, to the effect that (i) The Designated Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act, and all filings required under the laws of the State of Delaware with respect to the creation and valid existence of the Designated Trust as a business trust have been made. (ii) Under the Delaware Business Trust Act and the Trust Agreement, the Designated Trust has the power and authority to own property and conduct its business, all as described in the Prospectus. (iii) The Trust Agreement constitutes a valid and legally binding obligation of the Guarantor and the Trustees, enforceable against the Guarantor and the Trustees, in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights, to the effect of applicable policy on the enforceability of provisions relating to indemnification or contribution, and to general equity principles (except that such counsel need not express an opinion with respect to whether the right of the Preferred Security Holders or the Common Security Holders to institute a legal proceeding directly against any person to enforce any right of the Property Trustee is consistent with or permitted by Section 3816 of the Delaware Business Trust Act relating to derivative actions). (iv) Under the Delaware Business Trust Act and the Trust Agreement, the Designated Trust has the power and authority to execute and deliver, and to perform 20 its obligations under this Agreement and the Terms Agreement and issue and perform its obligations under the Designated Securities and the Common Securities. (v) Under the Delaware Business Trust Act and the Trust Agreement, the execution and delivery by the Designated Trust of this Agreement and the Terms Agreement to which this Agreement is attached and forms a part, and the performance by the Designated Trust of its obligations thereunder, have been duly authorized by all necessary action on the part of the Designated Trust. (vi) This Agreement and the Terms Agreement to which this Agreement is attached and forms a part with respect to the Designated Securities have been duly executed and delivered by the Designated Trust. (vii) The Designated Securities have been duly authorized by the Trust Agreement and the Designated Trust and are duly and validly issued and, subject to the qualifications set forth herein, fully paid and non-assessable beneficial interests in the assets of the Designated Trust and are entitled to the benefits provided by the Trust Agreement; the Securityholders, as beneficial owners of the Designated Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; provided that such counsel may note that the Securityholders may be obligated, pursuant to the Trust Agreement, to provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of Securities Certificates and the issuance of replacement Securities Certificates and provide security and indemnity in connection with requests of or directions to the Property Trustee (as defined in the Trust Agreement) to exercise its rights and powers under the Trust Agreement. (viii) The Common Securities have been duly authorized by the Trust Agreement and are validly issued and represent beneficial interests in the assets of the Designated Trust. (ix) Under the Delaware Business Trust Act and the Trust Agreement, the issuance of the Designated Securities and the Common Securities is not subject to preemptive rights. (x) The issuance and sale by the Designated Trust of Designated Securities and the Common Securities, the execution, delivery and performance by the Designated Trust of this Agreement and the Terms Agreement to which this Agreement is attached and forms a part, the consummation by the Designated Trust of the transactions contemplated thereby and compliance by the Designated Trust with its obligations thereunder will not violate any of the provisions of the Certificate of Trust of the Designated Trust or the Trust Agreement or any applicable Delaware law or administrative regulation. (xi) The issuance and sale of the Designated Securities being delivered at such Time of Delivery and the compliance by the Designated Trust with the Terms 21 Agreement to which this Agreement is attached and forms a part, the Designated Securities and the Trust Agreement with respect to the Designated Securities, the purchase by the Designated Trust of the Subordinated Debentures and the consummation of the transactions contemplated herein and in the Trust Agreement will not result in any violation of the provisions of the Certificate of Trust or Trust Agreement of the Designated Trust. (xii) Assuming that the Designated Trust derives no income from or connected with sources within the State of Delaware and has no assets, activities (other than maintaining the Delaware Trustee and the filing of documents with the Secretary of State of the State of Delaware) or employees in the State of Delaware, no authorization, approval, consent or order of any Delaware court or Delaware governmental authority or agency is required to be obtained by the Designated Trust solely in connection with the issuance and sale of the Designated Securities and the Common Securities (except that such counsel need express no opinion concerning the securities laws of the State of Delaware). (xiii) Assuming that the Designated Trust derives no income from or connected with sources within the State of Delaware and has no assets, activities (other than maintaining the Delaware Trustee and the filing of documents with the Secretary of State of the State of Delaware) or employees in the State of Delaware, that the Delaware Trustee satisfies the requirements of Section 3807 of the Delaware Business Trust Act and that the Designated Trust will be treated as a grantor trust for United States federal income tax purposes, the Securityholders (other than those holders of the Securities who reside or are domiciled in the State of Delaware) will have no liability for income taxes imposed by the State of Delaware solely as a result of their participation in the Designated Trust, and the Designated Trust will not be liable for any income tax imposed by the State of Delaware. (f) Jones, Day, Reavis & Pogue, as tax counsel for the Designated Trust and the Guarantor, shall have furnished to you their written opinion, dated the respective Time of Delivery, in form and substance satisfactory to you, to the effect that such firm confirms its opinion described in the Prospectus under the caption "Certain Federal Income Tax Consequences". (g) On the date of the Terms Agreement for such Designated Securities, at a time prior to the execution of the Terms Agreement with respect to the Designated Securities, and at each Time of Delivery for such Designated Securities, the independent accountants of the Guarantor who have certified the consolidated financial statements of the Guarantor and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the Representatives a letter, dated the effective date of the Registration Statement or the date of the most recent report filed with the Commission containing consolidated financial statements and incorporated by reference in the Registration Statement, if the date of such report is later than such effective date, and a letter dated such Time of Delivery, respectively, to the effect set forth in Annex II hereto, and with respect to such letter dated such Time of Delivery, as to such other matters as the Representatives may reasonably request and in form and substance satisfactory to the Representatives. 22 (h) Since the date of the applicable Terms Agreement or since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall have been no change in the capital stock or long-term debt of the Guarantor or any of its subsidiaries or any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Guarantor and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, the effect of which is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Prospectus as amended relating to the Designated Securities. (i) On or after the date of the Terms Agreement relating to the Designated Securities the rating assigned by any nationally recognized securities rating agency to any debt securities or preferred stock of the Guarantor as of the date of any applicable Terms Agreement shall not have been lowered since that date of such Terms Agreement or no such rating agency shall have publicly announced that it has placed any debt securities of the Guarantor on what is commonly termed a "watch list" for possible downgrading. (j) On or after the date of the Terms Agreement relating to the Designated Securities there shall not have occurred any of the following: (i) any material adverse change in the financial markets in the United States or any outbreak or escalation of hostilities or other national or international calamity or crisis, the effect of which shall be such as to make it, in the reasonable judgment of the Representative, impracticable to market the Designated Securities or enforce contracts for the sale of the Designated Securities, (ii) trading in any securities of the Guarantor shall have been suspended by the Commission, the Nasdaq National Market or a national securities exchange, (iii) trading generally on either the New York Stock Exchange or the Nasdaq National Market shall have been suspended, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, by either of said exchanges or by order of the Commission or any other governmental authority, or (iv) a banking moratorium shall have been declared by either Federal or New York authorities. (k) The Designated Securities at each Time of Delivery shall have been duly listed on the New York Stock Exchange. (l) The Designated Trust and the Guarantor shall have furnished or caused to be furnished to the Representatives at each Time of Delivery for the Designated Securities certificates of officers of the Designated Trust and the Guarantor satisfactory to the Representatives as to the accuracy of the representations and warranties of the Designated Trust and the Guarantor herein at and as of such Time of Delivery, as to the performance by the Designated Trust and the Guarantor of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (i) of this Section and as to such other matters as the Representatives may reasonably request. 23 Section 6. INDEMNIFICATION AND CONTRIBUTION. (a) The Designated Trust and the Guarantor, jointly and severally, will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus as amended or supplemented, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Designated Trust nor the Guarantor shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement, the Prospectus as amended or supplemented, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Designated Trust or the Guarantor by any Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities. (b) Each Underwriter will indemnify and hold harmless the Designated Trust and the Guarantor against any losses, claims, damages or liabilities to which the Designated Trust or the Guarantor may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus as amended or supplemented, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement, the Prospectus as amended or supplemented, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Designated Trust and the Guarantor by such Underwriter through the Representatives expressly for use therein and will reimburse the Designated Trust and the Guarantor for any legal or other expenses reasonably incurred by the Designated Trust or the Guarantor in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission to so notify such indemnifying party shall not relieve it from any liability which it may have to any indemnified party under such subsection, unless such omission prejudices the indemnifying party's ability to adequately defend such action or claim, or otherwise than under such 24 subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, which consent shall not be unreasonably withheld, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under subsection (a) or (b) above for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include any statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. The indemnifying party shall not be required to indemnify the indemnified party for any amount paid or payable by the indemnifying party in the settlement of any claim or action effected without the written consent of the indemnifying party, which consent shall not be unreasonably withheld. (d) If the indemnification provided for in this Section 6 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Designated Trust and the Guarantor on the one hand and the Underwriters of the Designated Securities on the other from the offering of the Designated Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give in a timely manner the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Designated Trust and the Guarantor on the one hand and the Underwriters of the Designated Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Designated Trust and the Guarantor on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Designated Trust and the Guarantor bear to the total underwriting compensation received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Designated Trust and the Guarantor on the one hand or such Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such 25 statement or omission. The Designated Trust, the Guarantor and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint. (e) The obligations of the Designated Trust and the Guarantor under this Section 6 shall be in addition to any liability which the Designated Trust and the Guarantor may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the 1933 Act; and the obligations of the Underwriters under this Section 6 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Designated Trust and the Guarantor and to each person, if any, who controls the Designated Trust and the Guarantor within the meaning of the 1933 Act. Section 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The respective indemnities, agreements, representations, warranties and other statements of the Designated Trust or the Guarantor and the several Underwriters, as set forth in any Terms Agreement to which this Agreement is attached and forms a part or made by or on behalf of them, respectively, pursuant to any Terms Agreement to which this Agreement is attached and forms a part, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Designated Trust or the Guarantor, or any officer or director or controlling person of the Designated Trust or the Guarantor, and shall survive delivery of and payment for the Securities. Section 8. TERMINATION OF AGREEMENT. If any Terms Agreement or Overallotment Option shall be terminated pursuant to Section 9 hereof, neither the Designated Trust nor the Guarantor shall then be under any liability to any Underwriter with respect to the Firm Designated Securities or Optional Designated Securities with respect to which such Terms Agreement shall have been terminated except as provided in Sections 4 and 6 hereof; but, if for any other reason, Designated Securities are not 26 delivered by or on behalf of the Designated Trust or the Guarantor as provided herein, the Guarantor will reimburse the Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Designated Securities, but the Designated Trust or the Guarantor shall then be under no further liability to any Underwriter with respect to such Designated Securities except as provided in Sections 4 and 6 hereof. Section 9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of the Underwriters participating in an offering of Firm Designated Securities or Optional Designated Securities shall fail at the applicable Time of Delivery to purchase such Securities which it or they are obligated to purchase hereunder and under the applicable Terms Agreement (the "Defaulted Securities"), then the Representatives shall have the right, within the first 36 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, within such first 36 hour period, the Representatives are unable to make arrangements for the purchase of all of the Defaulted Securities, then the Designated Trust and the Guarantor shall have the right, within the next 36 hours thereafter, to make arrangements for any other underwriter(s) reasonably satisfactory to the nondefaulting Underwriters to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, after such 72 hours neither the Representatives nor the Designated Trust shall have completed such arrangements for the purchase of all of the Defaulted Securities, then: (a) if the aggregate principal amount of Defaulted Securities does not exceed 10% of the aggregate principal amount of Firm Designated Securities or the Optional Designated Securities, as the case may be, to be purchased pursuant to such Terms Agreement, the Designated Trust and the Guarantor shall have the right to require the non-defaulting Underwriters named in such Terms Agreement to purchase the full amount thereof in the proportions that their respective underwriting obligations bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the aggregate principal amount of Defaulted Securities exceeds 10% of the aggregate principal amount of Firm Designated Securities or the Optional Designated Securities, as the case may be, to be purchased pursuant to such Terms Agreement, or the Designated Trust and the Guarantor shall not exercise their right pursuant to Section 9(a) above, the applicable Terms Agreement shall terminate without liability on the part of any non-defaulting Underwriter. No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default under this Agreement and the applicable Terms Agreement. In the event of any such default by any Underwriter or Underwriters as set forth in this Section 9, either the Representatives or the Designated Trust shall have the right to postpone the applicable Time of Delivery for a period not to exceed seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. 27 Section 10. NOTICES. In all dealings hereunder, the Representatives of the Underwriters of Designated Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Terms Agreement. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Terms Agreement; and if to the Designated Trust or the Guarantor shall be delivered or sent by mail, telex or facsimile transmission to the address of the Designated Trust or the Guarantor, respectively, set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 6(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Designated Trust and the Guarantor by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. Section 11. PARTIES. This Agreement and each Terms Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, each Designated Trust, the Guarantor and, to the extent provided in Sections 6 hereof, the officers and directors of each Designated Trust, the Guarantor and each person who controls any Designated Trust or the Guarantor or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Terms Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. Section 12. TIME OF THE ESSENCE; BUSINESS DAY. Time shall be of the essence of each Terms Agreement. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. Section 13. GOVERNING LAW. Each Terms Agreement to which this Agreement is attached and forms a part shall be governed by and construed in accordance with the laws of the State of New York. Section 14. COUNTERPARTS. Each Terms Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 28 ANNEX I Terms Agreement Goldman, Sachs & Co., [NAME(S) OF CO-REPRESENTATIVE(S),] As Representatives of the several Underwriters named in Schedule I hereto, c/o Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004. _____________________ ______ , _____ Ladies and Gentlemen: NVP Capital I, a statutory business trust formed under the laws of the State of Delaware (the "Designated Trust"), and Nevada Power Company, a Nevada corporation (the "Guarantor"), propose, subject to the terms and conditions stated herein and in the Underwriting Agreement Basic Provisions (the "Underwriting Agreement Basic Provisions") of the Designated Trust, NVP Capital II and the Guarantor, to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the Securities specified in Schedule II hereto (the "Designated Securities" consisting of Firm Designated Securities and any Optional Designated Securities the Underwriters may elect to purchase). The Designated Securities are exchangeable into debt securities of the Guarantor (the "Subordinated Debentures"), as specified in Schedule II to this Agreement. The Designated Securities will be guaranteed by the Guarantor to the extent set forth in this Agreement with respect to such Designated Securities (the "Guarantee"). Each of the provisions of the Underwriting Agreement Basic Provisions is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Terms Agreement, except that each representation and warranty which refers to the Prospectus in Section 1 of the Underwriting Agreement Basic Provisions shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement Basic Provisions in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Terms Agreement in relation to the Prospectus as amended or supplemented relating to the Designated Securities which are the subject of this Terms Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement Basic Provisions so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement Basic Provisions are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Securities pursuant to Section 10 of the Underwriting Agreement Basic Provisions and the address of the Representatives referred to in such Section 10 are set forth in Schedule II hereto. I-1 An amendment to the Registration Statement or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission. Subject to the terms and conditions set forth herein and in the Underwriting Agreement Basic Provisions incorporated herein by reference, (a) the Designated Trust agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Designated Trust, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the number of Firm Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto and, (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Designated Securities, as provided below, the Designated Trust agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Designated Trust at the purchase price to the Underwriters set forth in Schedule II hereto that portion of the number of Optional Designated Securities as to which such election shall have been exercised. The Designated Trust hereby grants to each of the Underwriters the right to purchase at their election up to the number of Optional Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto on the terms referred to in the paragraph next above for the sole purpose of covering over-allotments in the sale of the Firm Designated Securities. Any such election to purchase Optional Designated Securities may be exercised by written notice from the Representatives to the Designated Trust and the Guarantor given within a period of 15 calendar days after the date of this Terms Agreement, setting forth the aggregate number of Optional Designated Securities to be purchased and the date on which such Optional Designated Securities are to be delivered, as determined by the Representatives, but in no event earlier than the First Time of Delivery or, unless the Representatives and the Designated Trust otherwise agree in writing, no earlier than two or later than ten business days after the date of such notice. If the foregoing is in accordance with your understanding, please sign and return to us ten counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement Basic Provisions incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Designated Trust and the Guarantor. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Designated Trust and the Guarantor I-2 for examination, upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof. Very truly yours, NEVADA POWER COMPANY By: ------------------------------------- Name: Title: NVP CAPITAL I By: Nevada Power Company, as Depositor By: ------------------------------------- Name: Title: Accepted as of the date hereof: Goldman, Sachs & Co. [NAME(S) OF CO-REPRESENTATIVE(S)] As Representatives of the Underwriters Named in Schedule I hereto By: --------------------------------- (Goldman, Sachs & Co.) On behalf of each of the Underwriters named on Schedule I hereto I-3 SCHEDULE I
Number of Firm Maximum Number of Designated Optional Designated Securities to be Securities Which May Underwriter Purchased Be Purchased ----------- --------- ------------ Goldman, Sachs & Co.. . . . . . . . . . . . [NAME(S) OF CO-REPRESENTATIVE(S)] . . . . . [NAMES OF OTHER UNDERWRITERS]. . . . . . . Total
Sch. I-1 SCHEDULE II Designated Trust: NVP Capital __ Title of Designated Securities: ____% Cumulative Quarterly Income Preferred Securities, Series __ ("QUIPS") Aggregate principal amount: Aggregate principal amount of Designated Securities: $_____________ Price to Public: 100% of the principal amount of the Designated Securities Purchase Price by Underwriters: _______% of the principal amount of the Designated Securities Underwriters' Compensation: $______ per Designated Security Specified funds for payment of purchase price: Immediately available funds Accountants' Letter to be delivered on date of Terms Agreement: Yes. Trust Agreement: Amended and Restated Trust Agreement dated as of ________ __, ____, between the Guarantor and the Trustees named therein Indenture: Indenture dated as of March 1, 1997, between the Guarantor and IBJ Schroder Bank & Trust Company, as Debenture Trustee and Supplemental Indenture No. 1 dated as of March 1, 1997 , between the Guarantor and the Debenture Trustee (collectively the "Indenture") Sch. II-1 Guarantee: Guarantee Agreement dated as of ________ __, ____, between Guarantor and _______________ Trust Company, as Guarantee Trustee Maturity: ________ __, ____ Interest Rate: ____% Interest Payment Dates: March 31, June 30, September 30 and December 31 Extension Period: 20 quarters Redemption Provisions: The redemption provisions set forth in Section 402 of the Trust Agreement shall apply to the Designated Securities. Sinking Fund Provisions: No sinking fund provisions Time of Delivery: 10:00 a.m., New York City time ________ __, ____ Closing Location: Jones, Day, Reavis & Pogue 77 West Wacker Chicago, Illinois 60601-1692 Names and addresses of Representatives: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Sch. II-2 Information Furnished in Writing to the Guarantor Specifically for Inclusion in the Registration Statement, Preliminary Prospectus or Prospectus: Sch. II-3 ANNEX II Pursuant to Section 5(g) of the Underwriting Agreement Basic Provisions, the accountants shall furnish letters to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to the Guarantor and its subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations; (ii) In their opinion, the financial statements and any supplementary financial information and schedules (and, if applicable, financial forecasts and/or pro forma financial information) examined by them and included or incorporated by reference in the Registration Statement or the Prospectus comply as to form in all material respects with the applicable accounting requirements of the 1933 Act or the 1934 Act, as applicable, and the related published rules and regulations thereunder; (iii) On the basis of limited procedures, not constituting an examination in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest available interim financial statements of the Guarantor and its subsidiaries, II-1 inspection of the minute books of the Guarantor and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, inquiries of officials of the Guarantor and its subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (A) (i) the unaudited condensed balance sheets (including the schedules of capitalization and long-term debt) and statements of income, retained earnings and cash flows included in the Guarantor's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations, or (ii) any material modifications should be made to the unaudited condensed balance sheets (including the schedules of capitalization and long-term debt) and statements of income, retained earnings and cash flows included in the Guarantor's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus, for them to be in conformity with generally accepted accounting principles; (B) as of a specified date not more than five days prior to the date of such letter, there have been any changes in the capital stock (other than issuances of capital stock upon exercise of options and II-2 stock appreciation rights, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Prospectus) or any increase in the long-term debt of the Guarantor and its subsidiaries, or any decreases in net current assets or stockholders' equity or other items specified by the representatives of the Underwriters (the "Representatives"), or any increases in any items specified by the Representatives, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (C) for the period from the date of the latest financial statements included or incorporated by reference in the Prospectus to the specified date referred to in Clause (B) there were any decreases in net revenues or operating profit or the total or per share amounts of net income or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with the comparable period of the preceding year and with any other period of corresponding length specified by the Representatives, except in each case for increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (iv) In addition to the examination referred to in their report(s) included or incorporated by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraph (iii) above, they have carried out certain specified procedures, not constituting an examination in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives which are derived from the general accounting records of the Guarantor and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by reference), or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Representatives or in documents incorporated by reference in the Prospectus specified by the Representatives, and have compared certain of such amounts, percentages and financial information with the accounting records of the Guarantor and its subsidiaries and have found them to be in agreement. All references in this Annex II to the Prospectus shall be deemed to refer to the Prospectus (including the documents incorporated by reference therein) as defined in the Underwriting Agreement Basic Provisions as of the date of the letter delivered on the date of the Terms Agreement for purposes of such letter and to the Prospectus as amended or supplemented (including the documents incorporated by reference therein) in relation to the applicable Designated Securities for purposes of the letter delivered at the Time of Delivery for such Designated Securities. II-3 EX-4.01 3 EXHIBIT 4.01 EXHIBIT 4.01 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NEVADA POWER COMPANY to IBJ SCHRODER BANK & TRUST COMPANY Trustee JUNIOR SUBORDINATED INDENTURE Dated as of March 1, 1997 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 102. Compliance Certificate and Opinions. . . . . . . . . . . . . . . 9 SECTION 103. Forms of Documents Delivered to Trustee. . . . . . . . . . . . .10 SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . .10 SECTION 105. Notices, Etc. to Trustee and Company.. . . . . . . . . . . . . .11 SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . .11 SECTION 107. Conflict With Trust Indenture Act. . . . . . . . . . . . . . . .12 SECTION 108. Effect of Headings and Table of Contents.. . . . . . . . . . . .12 SECTION 109. Successors and Assigns.. . . . . . . . . . . . . . . . . . . . .12 SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . . . . . . .12 SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . .12 SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . .12 SECTION 113. Non-Business Days. . . . . . . . . . . . . . . . . . . . . . . .12 ARTICLE II SECURITY FORMS SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . .13 SECTION 202. Form of Face of Security.. . . . . . . . . . . . . . . . . . . .13 SECTION 203. Form of Reverse of Security. . . . . . . . . . . . . . . . . . .17 SECTION 204. Form of Trustee's Certificate of Authentication. . . . . . . . .20 ARTICLE III THE SECURITIES SECTION 301. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . .20 SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . .22 SECTION 303. Execution, Authentication, Delivery and Dating.. . . . . . . . .22 SECTION 304. Temporary Securities.. . . . . . . . . . . . . . . . . . . . . .24 SECTION 305. Registration, Transfer and Exchange. . . . . . . . . . . . . . .24 SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.. . . . . . . .25 SECTION 307. Payment of Interest; Interest Rights Preserved.. . . . . . . . .26 SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . .27 SECTION 309. Cancellation.. . . . . . . . . . . . . . . . . . . . . . . . . .27 SECTION 310. Computation of Interest. . . . . . . . . . . . . . . . . . . . .28 - i - SECTION 311. Deferrals of Interest Payment Dates. . . . . . . . . . . . . . .28 SECTION 312. Right of Set-Off.. . . . . . . . . . . . . . . . . . . . . . . .29 SECTION 313. Agreed Tax Treatment.. . . . . . . . . . . . . . . . . . . . . .29 SECTION 314. Extension of Stated Maturity; Adjustment of Stated Maturity Upon an Exchange. . . . . . . . . . . . . . . . . . . .29 SECTION 315. CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . .30 ARTICLE IV SATISFACTION AND DISCHARGE SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . . . . . . .30 SECTION 402. Application of Trust Money.. . . . . . . . . . . . . . . . . . .31 SECTION 403. Satisfaction, Discharge and Defeasance of Securities of Any Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 ARTICLE V REMEDIES SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . . . . .32 SECTION 502. Acceleration of Maturity; Rescission and Annulment.. . . . . . .33 SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.35 SECTION 504. Trustee May File Proofs of Claim.. . . . . . . . . . . . . . . .35 SECTION 505. Trustee May Enforce Claim Without Possession of Securities.. . .36 SECTION 506. Application of Money Collected.. . . . . . . . . . . . . . . . .36 SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . .37 SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.. . . . . . . . . . . . . . . . . . . . . . . . . . . .37 SECTION 509. Restoration of Rights and Remedies.. . . . . . . . . . . . . . .38 SECTION 510. Rights and Remedies Cumulative.. . . . . . . . . . . . . . . . .38 SECTION 511. Delay or Omission Not Waiver.. . . . . . . . . . . . . . . . . .38 SECTION 512. Control by Holders.. . . . . . . . . . . . . . . . . . . . . . .38 SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . .39 SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . .39 SECTION 515. Waiver of Usury, Stay or Extension Laws. . . . . . . . . . . . .40 ARTICLE VI THE TRUSTEE SECTION 601. Certain Duties and Responsibilities. . . . . . . . . . . . . . .40 SECTION 602. Notice of Defaults.. . . . . . . . . . . . . . . . . . . . . . .41 SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . .41 SECTION 604. Not Responsible for Recitals or Issuance of Securities.. . . . .42 SECTION 605. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . .43 SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . .43 SECTION 607. Compensation and Reimbursement.. . . . . . . . . . . . . . . . .43 SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . . . . .44 - ii - SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . . . . .44 SECTION 610. Resignation and Removal; Appointment of Successor. . . . . . . .44 SECTION 611. Acceptance of Appointment by Successor.. . . . . . . . . . . . .46 SECTION 612. Merger, Conversion, Consolidation or Succession to Business. . .46 SECTION 613. Preferential Collection of Claims Against Company. . . . . . . .46 SECTION 614. Appointment of Authenticating Agent. . . . . . . . . . . . . . .46 ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.. . .48 SECTION 702. Preservation of Information, Communications to Holders. . . . .48 SECTION 703. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . .49 SECTION 704. Reports by Company. . . . . . . . . . . . . . . . . . . . . . .49 ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 801. Company May Consolidate, Etc., Only on Certain Terms. . . . . .49 SECTION 802. Successor Person Substituted. . . . . . . . . . . . . . . . . .50 ARTICLE IX SUPPLEMENTAL INDENTURES SECTION 901. Supplemental Indentures Without Consent of Holders. . . . . . .51 SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . .52 SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . . . . .53 SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . .54 SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . .54 SECTION 906. Reference in Securities to Supplemental Indentures. . . . . . .54 ARTICLE X COVENANTS SECTION 1001. Payment of Principal, Premium and Interest. . . . . . . . . . .54 SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . .54 SECTION 1003. Money for Security Payments to be Held in Trust . . . . . . . .55 SECTION 1004. Statement as to Compliance. . . . . . . . . . . . . . . . . . .56 SECTION 1005. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . .56 SECTION 1006. Additional Sums . . . . . . . . . . . . . . . . . . . . . . . .56 SECTION 1007. Additional Covenants. . . . . . . . . . . . . . . . . . . . . .57 - iii - ARTICLE XI REDEMPTION OF SECURITIES SECTION 1101. Applicability of This Article . . . . . . . . . . . . . . . . .58 SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . .58 SECTION 1103. Selection of Securities to be Redeemed. . . . . . . . . . . . .58 SECTION 1104. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . .59 SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . .60 SECTION 1106. Payment of Securities Called for Redemption . . . . . . . . . .60 SECTION 1107. Company's Right of Redemption . . . . . . . . . . . . . . . . .60 ARTICLE XII SINKING FUNDS SECTION 1201. Applicability of Article. . . . . . . . . . . . . . . . . . . .61 SECTION 1202. Satisfaction of Sinking Fund Payments with Securities . . . . .61 SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . .62 ARTICLE XIII SUBORDINATION OF SECURITIES SECTION 1301. Securities Subordinate to Senior Debt . . . . . . . . . . . . .63 SECTION 1302. Payment Over of Proceeds Upon Dissolution, Etc. . . . . . . . .63 SECTION 1303. Prior Payment to Senior Debt Upon Acceleration of Securities. .64 SECTION 1304. No Payment When Senior Debt in Default. . . . . . . . . . . . .65 SECTION 1305. Payment Permitted If No Default . . . . . . . . . . . . . . . .66 SECTION 1306. Subrogation to Rights of Holders of Senior Debt . . . . . . . .66 SECTION 1307. Provisions Solely to Define Relative Rights . . . . . . . . . .66 SECTION 1308. Trustee to Effectuate Subordination . . . . . . . . . . . . . .67 SECTION 1309. No Waiver of Subordination Provisions . . . . . . . . . . . . .67 SECTION 1310. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . .67 SECTION 1311. Reliance on Judicial Order or Certificate of Liquidating Agent.67 SECTION 1312. Trustee Not Fiduciary for Holders of Senior Debt. . . . . . . .68 SECTION 1313. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights. . . . . . . . . . . . . . . . . . . . . . . .68 SECTION 1314. Article Applicable to Paying Agents . . . . . . . . . . . . . .68 SECTION 1315. Certain Conversions or Exchanges Deemed Payment . . . . . . . .68 - iv - Reconciliation and tie between the Trust Indenture Act of 1939 (including cross-references to provisions of Sections 310 to and including 317 which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the Trust Reform Act of 1990, are a part of and govern the Indenture whether or not physically contained therein) and the Junior Subordinated Indenture, dated as of March 1, 1997. Trust Indenture Act Section Indenture Section (S) 310 (a)(1), (2) and (5) 609 (a)(3) Not Applicable (a)(4) Not Applicable (b) 608/610 (c) Not Applicable (S) 311 (a) 613 (b) 613 (c) Not Applicable (S) 312 (a) 701 702(a) (b) 702(b) (c) 702(c) (S) 313 (a) 703(a) (b) 703(b) (c) 703(a), 703(b) (d) 703(c) (S) 314 (a)(1), (2) and (3) 704 (b) Not Applicable (c)(1) 102 (c)(2) 102 (c)(3) Not Applicable (d) Not Applicable (e) 102 (f) Not Applicable (S) 315 (a) 601(a) (b) 602 703(a), (b) (c) 601(b) (d) 601(c) (d)(1) 601(a)(1) (d)(2) 601(c)(2) - v - Trust Indenture Act Section Indenture Section 315 (d)(3) 601(c)(3) (e) 514 (S) 316 (a) 101 (a)(1)(A) 512 (a)(1)(B) 513 (a)(2) Not Applicable (b) 508 (c) 104(f) (S) 317 (a)(1) 503 (a)(2) 504 (b) 1003 (S) 318 (a) 107 Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Junior Subordinated Indenture. - vi - NEVADA POWER COMPANY JUNIOR SUBORDINATED INDENTURE, dated as of March 1, 1997 between Nevada Power Company, a Nevada corporation (hereinafter called the "Company") having its principal office at 6226 West Sahara Avenue, Las Vegas, NV 89102, and IBJ Schroder Bank & Trust Company, a banking corporation duly organized and existing under the laws of the New York, as Trustee (hereinafter called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured junior subordinated debt securities in series (hereinafter called the "Securities") of substantially the tenor hereinafter provided, including, without limitation, Securities issued to evidence loans made to the Company of the proceeds from the issuance from time to time by one or more business trusts (each an "NVP Trust", and collectively, the "NVP Trusts") of preferred trust interests in such Trusts (the "Preferred Securities") and common interests in such Trusts (the "Common Securities" and, collectively with the Preferred Securities, the "Trust Securities"), and to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered. All things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with their and its terms, have been done. NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of any series thereof, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. DEFINITIONS. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; - 1 - (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles which are generally accepted in the United States at the date or time of such computation; or, at the election of the Company from time to time, at the date of the execution and delivery of this Indenture; provided, however, that in determining generally accepted accounting principles applicable to the Company, the Company shall, to the extent required, conform to any order, rule or regulation of any administrative agency, regulatory authority or other governmental body having jurisdiction over the Company; (4) unless the context otherwise requires any reference to an "Article" or a "Section" refers to an Article or Section, as the case may be, of this Indenture; and (5) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Six, are defined in that Article. "ACT", when used with respect to any Holder, has the meaning specified in Section 104. "ADDITIONAL INTEREST" means the interest, if any, that shall accrue on any interest on the Securities of any series the payment of which has not been made on the applicable Interest Payment Date and which shall accrue at the rate per annum specified or determined as specified in such Security. "ADDITIONAL SUMS" has the meaning specified in Section 1006. "ADDITIONAL TAXES" means the sum of any additional taxes, duties and other governmental charges to which an NVP Trust has become subject from time to time as a result of a Tax Event. "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; provided, however, that an Affiliate of the Company shall not be deemed to include any NVP Trust to which Securities have been issued. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "AUTHENTICATING AGENT" means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series. - 2 - "BOARD OF DIRECTORS" means either the board of directors of the Company or any committee of that board duly authorized to act hereunder. "BOARD RESOLUTION" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, or such committee of the Board of Directors or officers of the Company to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification, and delivered to the Trustee. "BUSINESS DAY" means any day other than (i) a Saturday or Sunday, (ii) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office of the Trustee, or, with respect to the Securities of a series issued to an NVP Trust, the Corporate Trust Office of the Property Trustee under the related Trust Agreement, is closed for business. "COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date. "COMMON SECURITIES" has the meaning specified in the first recital of this Indenture. "COMMON STOCK" means the common stock, $1.00 par value per share, of the Company. "COMPANY" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, the written request or order signed in the name of the Company by its Chairman of the Board and Chief Executive Officer, its President or any Vice President, and by its Treasurer, any Assistant Treasurer, or any other officer or agent of the Company duly authorized by the Board of Directors of the Company to act in respect of matters relating to this Indenture and delivered to the Trustee. "CORPORATE TRUST OFFICE" means the principal corporate trust office of the Trustee which at the time of execution of this Indenture is located at One State Street, New York, New York 10004, Attention: Corporate Trust Department. "CORPORATION" means a corporation, association, company, joint-stock company or business trust. "DEBT" means, with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent, (i) every obligation of such Person for money borrowed; (ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; (iii) every reimbursement obligation of such Person with respect to - 3 - letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (iv) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business); (v) every capital lease obligation of such Person; and (vi) every obligation of the type referred to in clauses (i) through (v) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable for, directly or indirectly, as obligor or otherwise. "DEFAULTED INTEREST" has the meaning specified in Section 307. "DEPOSITARY" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the person designated as Depositary by the Company pursuant to Section 301 with respect to such series (or any successor thereto). "DISCOUNT SECURITY" means any security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 502. "DOLLAR" means the currency of the United States of America that, as at the time of payment, is legal tender for the payment of public and private debts. "EVENT OF DEFAULT" unless otherwise specified in the supplemental indenture creating a series of Securities, has the meaning specified in Article V. "EXTENSION PERIOD" has the meaning specified in Section 311. "FOREIGN CURRENCY" means any currency issued by the government of one or more countries other than the United States of America or by any recognized confederation or association of such governments. "GLOBAL SECURITY" means a Security in the form prescribed in Article II evidencing all or part of a series of Securities, issued to the Depositary or its nominee for such series, and registered in the name of such Depositary or its nominee. "GOVERNMENT OBLIGATIONS" means, with respect to the Securities of any series, securities which are (i) direct obligations of the United States of America or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed by the United States of America and which, in either case, are full faith and credit obligations of the United States of America and are not callable or redeemable at the option of the issuer thereof and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any - 4 - amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of the Government Obligation evidenced by such depository receipt. "HOLDER" means a Person in whose name a Security is registered in the Securities Register. "JUNIOR SUBORDINATED PAYMENT" has the meaning specified in Section 1302. "INDENTURE" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of each particular series of Securities established as contemplated by Section 301. "INTEREST PAYMENT DATE" means as to each series of Securities the Stated Maturity of an installment of interest on such Securities. "INTEREST RATE" means the rate of interest specified or determined as specified in each Security as being the rate of interest payable on such Security. "INVESTMENT COMPANY EVENT" means, in respect of an NVP Trust, the receipt by an NVP Trust of an Opinion of Counsel, rendered by a law firm having a recognized national tax and securities practice, to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), such NVP Trust is or will be considered an "investment company" that is required to be registered under the 1940 Act, which Change in 1940 Act Law becomes effective on or after the date of original issuance of the Preferred Securities of such NVP Trust. "LIEN" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "MATURITY" OR "MATURITY DATE", when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "NVP TRUST" has the meaning specified in the first recital of this Indenture. "1940 ACT" means the Investment Company Act of 1940, as amended. "NEVADA POWER GUARANTEE" means the guarantee by the Company of distributions on the Preferred Securities of an NVP Trust to the extent provided in the Guarantee Agreement, substantially in the form attached hereto as Annex C, or substantially in such form as may be specified as contemplated by Section 301 with respect to the Securities of any series, in each case as amended from time to time. - 5 - "NOTICE OF DEFAULT" has the meaning specified in Section 501(3). "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the Board and Chief Executive Officer, President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel for the Company, and who is reasonably acceptable to the Trustee. "ORIGINAL ISSUE DATE" means the date of issuance specified as such in each Security. "OUTSTANDING" means, when used in reference to any Securities, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore irrevocably deposited with the Trustee or any Paying Agent in trust for the Holders of such Securities in compliance with Article IV hereof; and (iii) Securities in substitution for or in lieu of which other Securities have been authenticated and delivered or which have been paid pursuant to Section 306, unless proof satisfactory to the Trustee is presented that any such Securities are held by Holders in whose hands such Securities are valid, binding and legal obligations of the Company; PROVIDED, HOWEVER, that in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. Upon the written request of the Trustee, the Company shall furnish to the Trustee promptly an Officers' Certificate listing and identifying all Securities, if any, known by the Company to be owned or held by or for the account of the Company, or any other obligor on the Securities or any Affiliate of the Company or such obligor, and, subject to the provisions of Section 601, the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding for the purpose of any such determination. - 6 - "PAYING AGENT" means the Trustee or any Person authorized by the Company to pay the principal of or interest on any Securities on behalf of the Company. "PERSON" means any individual, corporation, estate, partnership, joint venture, association, trust, joint stock company, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof, or any other entity of whatever nature. "PLACE OF PAYMENT" means, with respect to the Securities of any series, the place or places where the principal of (and premium, if any) and interest on the Securities of such series are payable pursuant to Section 301 or 311. "PREDECESSOR SECURITY" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any security authenticated and delivered under Section 306 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security. "PREFERRED SECURITIES" has the meaning specified in the first recital of this Indenture. "PROCEEDING" has the meaning specified in Section 1302. "PROPERTY TRUSTEE" means, in respect of any NVP Trust, the commercial bank or trust company identified as the "Property Trustee" in the related Trust Agreement, solely in its capacity as Property Trustee of such NVP Trust under such Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor property trustee appointed as therein provided. "REDEMPTION DATE", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "REGULAR RECORD DATE" for the interest payable on any Interest Payment Date with respect to the Securities of a series means, unless otherwise provided pursuant to Section 301 with respect to Securities of a series, the date which is fifteen days next preceding such Interest Payment Date (whether or not a Business Day). "RESPONSIBLE OFFICER" when used with respect to the Trustee means any officer assigned to the Corporate Trust Office, including a vice president, assistant vice president, assistant treasurer, assistant secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and having direct responsibility for the administration of this Indenture, and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "SECURITIES" or "SECURITY" means any debt securities or debt security, as the case may be, authenticated and delivered under this Indenture. "SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the respective meanings specified in Section 305. - 7 - "SENIOR DEBT" means the principal of and premium, if any and interest, if any (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not such claim for post-petition interest is allowed in such proceeding), on Debt, whether incurred on or prior to the date of this Indenture or thereafter incurred, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are not superior in right of payment to the Securities or to other Debt which is pari passu with, or subordinated to, the Securities, provided, however, that Senior Debt shall not be deemed to include (a) any Debt of the Company which when incurred and without respect to any election under Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the Company, (b) any Debt of the Company to any of its Subsidiaries, (c) Debt to any employee of the Company, (d) any liability for taxes, (e) Debt or other monetary obligations to trade creditors created or assumed by the Company or any of its Subsidiaries in the ordinary course of business in connection with the obtaining of goods, materials or services and (f) the Securities. "SPECIAL EVENT" means a Tax Event or an Investment Company Event. "SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307. "STATED MATURITY", when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified pursuant to the terms of such Security as the date on which the principal of such Security or such installment of interest is due and payable, as such date may be extended as provided herein. "SUBSIDIARY" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "TAX EVENT" means the receipt by an NVP Trust of an Opinion of Counsel, rendered by a law firm having a recognized national tax and securities practice, to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of issuance of the Preferred Securities of such NVP Trust, there is more than an insubstantial risk that (i) the NVP Trust is, or will be within 90 days of the date of such Opinion of Counsel, subject to United States federal income tax with respect to income received or accrued on the corresponding series of Securities, (ii) interest payable by the Company on the corresponding series of Securities is not, or within 90 days after the date of such Opinion of Counsel, will not be, deductible, in whole or in part, for United States federal income tax purposes or (iii) the NVP Trust is, or will be within 90 days after the date of such Opinion of Counsel, subject to more than a de minimis amount of other taxes, duties, assessments or other governmental charges. - 8 - "TRUST AGREEMENT" means the Trust Agreement substantially in the form attached hereto as Annex A, as amended by the form of Amended and Restated Trust Agreement substantially in the form attached hereto as Annex B, or substantially in such form as may be specified as contemplated by Section 301 with respect to the Securities of any series, in each case as amended from time to time. "TRUSTEE" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder and, if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbb), as amended and as in effect on the date as of this Indenture, except as provided in Section 905. "TRUST SECURITIES" has the meaning specified in the first recital of this Indenture. "VICE PRESIDENT" when used with respect to the Company, means any duly appointed vice president, whether or not designated by a number or a word or words added before or after the title "vice president." SECTION 102. COMPLIANCE CERTIFICATE AND OPINIONS. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent (including covenants compliance with which constitutes a condition precedent), if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent (including covenants compliance with which constitute a condition precedent), if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than the certificates provided pursuant to Section 1005) shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; - 9 - (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 103. FORMS OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any Officers' Certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 104. ACTS OF HOLDERS. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given to or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments is or are delivered to the Trustee, and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a Person acting in other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. - 10 - (c) The fact and date of the execution by any Person of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient and in accordance with such reasonable rules as the Trustee may determine. (d) The ownership of Securities shall be proved by the Securities Register. (e) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (f) The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to take any action under this Indenture by vote or consent. Except as otherwise provided herein, such record date shall be the later of 30 days prior to the first solicitation of such consent or vote or the date of the most recent list of Securityholders furnished to the Trustee pursuant to Section 701 prior to such solicitation. If a record date is fixed, those persons who were Securityholders at such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Holders after such record date, provided, however, that unless such vote or consent is obtained from the Holders (or their duly designated proxies) of the requisite principal amount of Outstanding Securities prior to the date which is the 120th day after such record date, any such vote or consent previously given shall automatically and without further action by any Holder be canceled and of no further effect. SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose (except as otherwise provided in Section 501 hereof) hereunder if in writing and mailed, first class, postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company. SECTION 106. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Securities Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice - 11 - so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture Act through operation of Section 318(c) thereof, such imposed duties shall control. SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 109. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 110. SEPARABILITY CLAUSE. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 111. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto, any Paying Agent and their successors and assigns, the holders of Senior Debt and the Holders of the Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 112. GOVERNING LAW. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. SECTION 113. NON-BUSINESS DAYS. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or the Securities) payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day (and no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, until such next succeeding Business Day), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day (in each case with the same force and effect as if made on the Interest Payment Date or Redemption Date or at the Stated Maturity). - 12 - ARTICLE II SECURITY FORMS SECTION 201. FORMS GENERALLY. The Securities of each series and the Trustee's certificate of authentication shall be in substantially the forms set forth in this Article, or in such other form or forms as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with applicable tax laws or the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such securities, as evidenced by their execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 with respect to the authentication and delivery of such Securities. The Trustee's certificates of authentication shall be substantially in the form set forth in this Article. The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods, if required by any securities exchange, the Nasdaq National Market or other applicable interdealer quotation system or self-regulatory organization on which the Securities may be listed or traded, on a steel engraved border or steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange, the Nasdaq National Market or other applicable interdealer quotation system or self- regulatory organization on which the Securities may be listed or traded, all as determined by the officers executing such Securities, as evidenced by their execution of such securities. SECTION 202. FORM OF FACE OF SECURITY. [If the Security is a Global Security, insert - This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the Securities Register in the name of The Depository Trust Company (the "Depository") or a nominee of the Depository. This Security is exchangeable for Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Indenture and no transfer of this Security (other than a transfer of this Security as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Security is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York) to Nevada Power Company or its agent for registration of transfer, exchange or payment, and any Security issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.] - 13 - NEVADA POWER COMPANY (Title of Security) No. __________ $_____________ CUSIP ________ Nevada Power Company, a corporation organized and existing under the laws of Nevada (hereinafter called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to _______________, or registered assigns, the principal sum of _____________ Dollars on ______ __, ____[if applicable, insert --; provided, that the Company may (i) change the maturity date upon the occurrence of an exchange of the Securities for the Trust Securities subject to certain conditions set forth in Section 314 of the Indenture, which changed maturity date shall in no case be earlier than ______ __, ____ or later than _______ __, ____ and (ii) extend the maturity date subject to certain conditions specified in Section 314 of the Indenture, which extended maturity date shall in no case be later than _______ __, ____]. The Company further promises to pay interest on said principal sum from ______, ___ or from the most recent interest payment date (each such date, an "Interest Payment Date") on which interest has been paid or duly provided for, [monthly] [quarterly] [semi-annually] [if applicable, insert-(subject to deferral as set forth herein)] in arrears on [insert applicable Interest Payment Dates] of each year, commencing ______, ___, at the rate of ___% per annum, until the principal hereof shall have become due and payable, [if applicable, insert- plus Additional Interest, if any,] until the principal hereof is paid or duly provided for or made available for payment [if applicable, insert- and on any overdue principal and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the rate of ___% per annum, compounded [monthly] [quarterly] [annually]. The amount of interest payable for any period shall be computed on the basis of [twelve 30-day months] and a [360-day] year. For periods of less than a full month, interest shall be computed on the actual number of elapsed days over 360 days. In the event that any date on which interest is payable on this Security is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. A "Business Day" shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office of the Trustee [if applicable, insert-, or the principal office of the Property Trustee under the Trust Agreement hereinafter referred to for NVP Capital __,] is closed for business. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities, as defined in the Indenture) is registered in the Securities Register at the close of business on the Regular Record Date for such interest installment, which shall be the [insert definition of Regular Record Dates]. Any such interest installment not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series - 14 - not less than 10 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, the Nasdaq National Market or other applicable interdealer quotation system or self-regulatory organization on which the Securities of this series may be listed or traded, and upon such notice as may be required by such exchange or other self-regulatory organization, all as more fully provided in said Indenture. [If applicable, insert- The Company shall have the right at any time during the term of this Security, from time to time, to defer the payment of interest on such Security for up to 20 consecutive quarterly interest payment periods with respect to each deferral period (each an "Extension Period"), during which Extension Periods the Company shall have the right to make payments of interest on any Interest Payment Date. No Extension Period shall end on a date other than an Interest Payment Date (and any interest so deferred shall be payable to the Holders on the Regular Record Date to the Interest Payment which ends the Extension Period). At the end of any such Extension Period the Company shall pay all interest then accrued and unpaid (together with Additional Interest thereon to the extent permitted by applicable law); provided that during any such Extension Period, the Company will not, and must cause all Subsidiaries of the Company not to, (i) declare or pay any dividends or distributions or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock, or (ii) make any payment of principal of, or interest or premium, if any, on or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks pari passu with or junior in right of payment to this Security or make any guarantee payments with respect to any indebtedness if such guarantee ranks pari passu with or junior in right of payment to this Security (other than (a) dividends or distributions in Common Stock of the Company, (b) redemptions or purchases of any rights pursuant to the Company's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under the Company's Stock Purchase and Dividend Reinvestment Plan and any of the Company's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by the Company or any of its Subsidiaries). Prior to the termination of any such Extension Period, the Company may further extend the interest payment period. Notwithstanding any provision herein or in the Indenture, no Extension Period shall exceed __ consecutive [months] [quarters] [semi-annual periods] or extend beyond the Maturity Date of this Security. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may elect to begin a new Extension Period, subject to the requirements hereof. No interest shall be due and payable during an Extension Period except at the end thereof. The Company shall give the Holder of this Security and the Trustee written notice of its election to begin any Extension Period at least one Business Day prior to the Interest Payment Date [if applicable, insert- or, with respect to the Securities issued to an NVP Trust, prior to the earlier of (i) the date the Distributions on the Preferred Securities would have been payable except for the election to begin or continue such Extension Period, or (ii) the date the Administrative Trustees are required to give notice to any securities exchange, the Nasdaq National Market or other applicable interdealer quotation system or self- regulatory organization or to holders of such Preferred Securities of the record date or the date such Distributions are payable, but in any event not less than one Business Day prior to such record date]. Payment of the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Company maintained for that purpose in the United States, in such - 15 - coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts [if applicable, insert-; provided, however, that at the option of the Company payment of interest may be made (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Securities Register or (ii) by wire transfer in immediately available funds at such place and to such account as may be designated by the Person entitled thereto as specified in the Securities Register]. The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payments to the prior payment in full of all Senior Debt, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: NEVADA POWER COMPANY By: _________________________________________ [President or Vice President] Attest: [Secretary or Assistant Secretary] - 16 - SECTION 203. FORM OF REVERSE OF SECURITY. This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under a Junior Subordinated Indenture, dated as of March 1, 1997 (herein called the "Indenture"), between the Company and IBJ Schroder Bank & Trust Company, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof[, limited in aggregate principal amount to $___________]. All terms used in this Security that are defined in the Indenture [if applicable, insert- or in the Trust Agreement, dated _________ __, ____, as amended (the "Trust Agreement"), for NVP Capital __ among Nevada Power Company, as Depositor, and the Trustees named therein] shall have the meanings assigned to them in the Indenture [if applicable, insert- or the Trust Agreement, as the case may be]. [If applicable, insert- On or after _________ __, ____, the Company may at any time, at its option, subject to the terms and conditions of Article Eleven of the Indenture, redeem this Security in whole at any time or in part from time to time, without premium or penalty, at a redemption price equal to 100% of the principal amount thereof plus the accrued and unpaid interest [if applicable, insert-, including Additional Interest, if any,] to the date fixed for redemption. [If applicable, insert- If a Special Event in respect of an NVP Trust shall occur and be continuing, the Company may, at its option, redeem this Security within 90 days of the occurrence of such Special Event, in whole but not in part, subject to the provisions of Section 1107 and the other provisions of Article XI of the Indenture, at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, including Additional Interest, if any, to the date fixed for redemption.] In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. [If the Security is not a Discount Security, - If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of this Security may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.] [If the Security is a Discount Security, - If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of this Security may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. Such amount shall be equal to [- insert formula for determining the amount]. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal and overdue interest (in each case to the extent that the payment of such interest shall be - 17 - legally enforceable), all of the Company's obligations in respect of the payment of the principal of and interest, if any, on this Security shall terminate.] The Indenture contains provisions for satisfaction, discharge and defeasance at any time of the entire indebtedness of this Security upon compliance by the Company with certain conditions set forth in the Indenture. The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee at any time to enter into a supplemental indenture or indentures for the purpose of modifying in any manner the rights and obligations of the Company and of the Holders of the Securities, with the consent of the Holders of a majority in principal amount of the Outstanding Securities of each series to be affected by such supplemental indenture. The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. [If the Security is not a Discount Security, - As provided in and subject to the provisions of the Indenture, if an Event of Default with respect the Securities of this series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of this series may declare the principal amount of all the Securities of this series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), provided that, in the case of the Securities of this series issued to an NVP Trust, if upon an Event of Default, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of this series fail to declare the principal of all the Securities of this series to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the corresponding series of Preferred Securities then outstanding shall have such right by a notice in writing to the Company and the Trustee; and upon any such declaration such principal amount of and the accrued interest (including any Additional Interest) on all the Securities of this series shall become immediately due and payable, provided that the payment of principal and interest (including any Additional Interest) on such Securities shall remain subordinated to the extent provided in Article Thirteen of the Indenture. [If the Security is a Discount Security, - As provided in and subject to the provisions of the Indenture, if an Event of Default with respect the Securities of this series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than such portion of the principal amount as may be specified in the terms of this series of all the Securities of this series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), provided that, in the case of the Securities of a series issued to an NVP Trust, if upon an Event of Default, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of this series fails to declare the principal of all the Securities of that series to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the corresponding series of Preferred Securities then outstanding shall have - 18 - such right by a notice in writing to the Company and the Trustee; and upon any such declaration such specified amount of and the accrued interest (including any Additional Interest) on all the Securities of this series shall become immediately due and payable, provided that the payment of principal and interest (including any Additional Interest) on such Securities shall remain subordinated to the extent provided in Article Thirteen of the Indenture. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained under Section 1002 of the Indenture duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered in the Securities Register as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Securities of this series are issuable only in registered form without coupons in denominations of $____ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of such series of a different authorized denomination, as requested by the Holder surrendering the same. The Company and, by its acceptance of this Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, this Security agree that for United States federal, state and local tax purposes it is intended that this Security constitute indebtedness. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. - 19 - SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. Except as set forth in Section 614, the Trustee's certificate of authentication shall be in the following form. This is one of the Securities referred to in the within mentioned Indenture. _________________________________ as Trustee By: _____________________________ Authorized Officer ARTICLE III THE SECURITIES SECTION 301. TITLE AND TERMS. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth in an Officers' Certificate (attaching the Form of Security), or established in one or more indentures supplemental hereto, prior to the issuance of Securities of a series: (a) the title of the securities of such series, which shall distinguish the Securities of the series from all other Securities; (b) the limit, if any, upon the aggregate principal amount of the Securities of such series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1106); provided, however, that the authorized aggregate principal amount of such series may be increased above such amount by a Board Resolution to such effect; (c) the Stated Maturity or Maturities on which the principal of the Securities of such series is payable or the method of determination thereof; (d) the rate or rates, if any, at which the Securities of such series shall bear interest, if any, the rate or rates and extent to which Additional Interest, if any, shall be payable in respect of any Securities of such series, the Interest Payment Dates on which such interest shall be payable, the right, pursuant to Section 311 or as otherwise set forth therein, of the Company to defer or extend an Interest Payment Date, and the Regular Record Date for the interest payable on any Interest Payment Date or the method by which any of the foregoing shall be determined; (e) the place or places where the principal of (and premium, if any) and interest on the Securities of such series shall be payable, the place or places where the Securities of such series may be presented for registration of transfer or exchange, and the place or places - 20 - where notices and demands to or upon the Company in respect of the Securities of such series may be made; (f) the period or periods within or the date or dates on which, if any, the price or prices at which and the terms and conditions upon which the Securities of such series may be redeemed, in whole or in part, at the option of the Company; (g) the obligation or the right, if any, of the Company to redeem, repay or purchase the Securities of such series pursuant to any sinking fund, amortization or analogous provisions, or at the option of a Holder thereof, and the period or periods within which, the price or prices at which, the currency or currencies (including currency unit or units) in which and the other terms and conditions upon which Securities of the series shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation; (h) the denominations in which any Securities of such series shall be issuable, if other than denominations of $25 and any integral multiple thereof; (i) if other than Dollars, the currency or currencies (including currency unit or units) in which the principal of (and premium, if any) and interest, if any, on the Securities of the series shall be payable, or in which the Securities of the series shall be denominated; (j) the additions, modifications or deletions, if any, in the Events of Default or covenants of the Company set forth herein with respect to the Securities of such series; (k) if other than the principal amount thereof, the portion of the principal amount of Securities of such series that shall be payable upon declaration of acceleration of the Maturity thereof; (l) the additions or changes, if any, to this Indenture with respect to the Securities of such series as shall be necessary to permit or facilitate the issuance of the Securities of such series in bearer form, registrable or not registrable as to principal, and with or without interest coupons; (m) any index or indices used to determine the amount of payments of principal of and premium, if any, on the Securities of such series or the manner in which such amounts will be determined; (n) the issuance of a temporary Global Security representing all of the Securities of such series and exchange of such temporary Global Security for definitive Securities of such series; (o) whether the Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depositary for such Global Securities, which Depositary shall be a clearing agency registered under the Securities Exchange Act of 1934, as amended; - 21 - (p) the appointment of any Paying Agent or Agents for the Securities of such series; (q) the terms of any right to convert or exchange Securities of such series into any other securities or property of the Company, and the additions or changes, if any, to this Indenture with respect to the Securities of such series to permit or facilitate such conversion or exchange; (r) the form or forms of the Trust Agreement, Amended and Restated Trust Agreement and Guarantee Agreement, if different from the forms attached hereto as Annexes A, B and C, respectively; (s) the relative degree, if any, to which the Securities of the series shall be senior to or be subordinated to other series of Securities in right of payment, whether such other series of Securities are Outstanding or not; and (t) any other terms of the Securities of such series (which terms shall not be inconsistent with the provisions of this Indenture). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided herein or in or pursuant to such Board Resolution and set forth in such Officers' Certificate or in any such indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. SECTION 302. DENOMINATIONS. The Securities of each series shall be in registered form without coupons and shall be issuable in denominations of $25 and any integral multiple thereof, unless otherwise specified as contemplated by Section 301. SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Securities shall be executed on behalf of the Company by its President or one of its Vice Presidents under its corporate seal reproduced or impressed thereon and attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication. Securities may be authenticated on original issuance from time to time and delivered pursuant to such procedures acceptable to the Trustee ("Procedures") as may be specified from time to time by Company Order. - 22 - Prior to the delivery of a Security to the Trustee for authentication, the Company shall deliver to the Trustee the following: (a) A Company Order (including the Form of Security) requesting the Trustee's authentication and delivery of all or a portion of the Securities of such series, and if less than all, setting forth procedures for such authentication; (b) The Board Resolution by or pursuant to which such form of Security has been approved, and the Board Resolution, if any, by or pursuant to which the terms of the Securities of such series have been approved, and, if pursuant to a Board Resolution, an Officers' Certificate describing the action taken; (c) An Officers' Certificate dated the date such certificate is delivered to the Trustee, stating that all conditions precedent provided for in this Indenture relating to the authentication and delivery of Securities in such form and with such terms have been complied with; and (d) An Opinion of Counsel stating that (i) the form of such Securities has been duly authorized and approved in conformity with the provisions of this Indenture; (ii) the terms of such Securities have been duly authorized and determined in conformity with the provisions of this Indenture; and (iii) Securities in such form when completed by appropriate insertions and executed and delivered by the Company to the Trustee for authentication in accordance with this Indenture, authenticated and delivered by the Trustee in accordance with this Indenture within the authorization as to aggregate principal amount established from time to time by the Board of Directors and sold in the manner specified in such Opinion of Counsel, will be the legal, valid and binding obligations of the Company entitled to the benefits of this Indenture, subject to applicable bankruptcy, reorganization, insolvency and similar laws generally affecting creditors' rights, to general equitable principles and except as enforcement thereof may be limited by (A) requirements that a claim with respect to any Securities denominated other than in Dollars (or a Foreign Currency or currency unit judgment in respect of such claim) be converted into Dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or (B) governmental authority to limit, delay or prohibit the making of payments in Foreign Currencies or currency units or payments outside the United States, and subject to such other qualifications as such counsel shall conclude do not materially affect the rights of Holders of such Securities; provided, however, that the Trustee shall be entitled to receive the documents referred to in Clauses (b), (c) and (d) above only at or prior to the first request of the Company to the Trustee to authenticate Securities of such series. Each Security shall be dated the date of its authentication. - 23 - No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by the manual signature of one of its authorized officers, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. SECTION 304. TEMPORARY SECURITIES. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Securities of such series in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Company designated for that purpose without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series of authorized denominations having the same Original Issue Date and Stated Maturity and having the same terms as such temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. SECTION 305. REGISTRATION, TRANSFER AND EXCHANGE. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. Such register is herein sometimes referred to as the "Securities Register." The Trustee is hereby appointed "Securities Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security at the office or agency of the Company designated for that purpose the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series of any authorized denominations, of a like aggregate principal amount, of the same Original Issue Date and Stated Maturity and having the same terms. At the option of the Holder, Securities may be exchanged for other Securities of the same series of any authorized denominations, of a like aggregate principal amount, of the same Original Issue Date and Stated Maturity and having the same terms, upon surrender of the Securities to be exchanged at such office or agency. Whenever any securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. - 24 - All Securities issued upon any transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange. Every Security presented or surrendered for transfer or exchange shall (if so required by the Company or the Securities Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made to a Holder for any transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Securities. Notwithstanding any of the foregoing, any Global Security of a series shall be exchangeable pursuant to this Section 305 for Securities registered in the names of Persons other than the Depositary for such Security or its nominee only if (i) such Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended at a time when the Depositary is required to be so registered to act as Depositary, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Security shall be so exchangeable or (iii) there shall have occurred and be continuing an Event of Default with respect to the Securities of such series. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Securities registered in such names as such Depositary shall direct. Notwithstanding any other provision in this Indenture, a Global Security may not be transferred except as a whole by the Depositary with respect to such Global Security to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary. Neither the Company nor the Trustee shall be required, pursuant to the provisions of this Section, (a) to issue, transfer or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of selection for redemption of Securities pursuant to Article XI and ending at the close of business on the day of mailing of notice of redemption or (b) to transfer or exchange any Security so selected for redemption in whole or in part, except, in the case of any Security to be redeemed in part, any portion thereof not to be redeemed. SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any mutilated Security is surrendered to the Trustee together with such security or indemnity as may be required by the Company or the Trustee to save each of them harmless, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same issue and series of like tenor and principal amount, having the same Original Issue Date and Stated Maturity and bearing the same Interest Rate as such mutilated Security, and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii) such security or indemnity as may - 25 - be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same issue and series of like tenor and principal amount, having the same Original Issue Date and Stated Maturity and bearing the same Interest Rate as such destroyed, lost or stolen Security, and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Interest on any Security of any series which is payable, and is punctually paid or duly provided for, on any Interest Payment Date, shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered in the Securities Register at the close of business on the Regular Record Date for such interest in respect of Securities of such series, except that, unless otherwise provided in the Securities of such series, interest payable on the Stated Maturity of a Security shall be paid to the Holder to whom principal is paid. The initial payment of interest on any Security of any series which is issued between a Regular Record Date and the related Interest Payment Date shall be payable as provided in such Security or in the Board Resolution pursuant to Section 301 with respect to the related series of Securities. Any interest on any Security which is payable, but is not timely paid or duly provided for, except any interest deferred during any Extension Period permitted by any indenture supplement hereto or a Board Resolution providing for the initial issuance of the Security, on any Interest Payment Date for Securities of such series (herein called "Defaulted Interest"), shall forthwith cease to be payable to the registered Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series in respect of which interest is in default (or their respective Predecessor Securities) are registered at the close of business on a Special - 26 - Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class, postage prepaid, to each Holder of a Security of such series at the address of such Holder as it appears in the Securities Register not less than 10 days prior to such Special Record Date. The Trustee shall, if directed by the Company, in the name and at the expense of the Company, cause a similar notice to be published at least once in a newspaper, customarily published in the English language on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered in the Securities Register on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange, the Nasdaq National Market or other applicable interdealer quotation system or self-regulatory organization on which the Securities of the series in respect of which interest is in default may be listed or traded and, upon such notice as may be required by such exchange or other self-regulatory organization (or by the Trustee if the Securities are not listed or traded), if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 308. PERSONS DEEMED OWNERS. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of principal of and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. - 27 - SECTION 309. CANCELLATION. All Securities surrendered for payment, redemption, transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such Securities and Securities surrendered directly to the Trustee for any such purpose shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities shall be destroyed by the Trustee and the Trustee shall deliver to the Company a certificate of such destruction. SECTION 310. COMPUTATION OF INTEREST. Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series for any period shall be computed on the basis of a 360-day year of twelve 30-day months and interest on the Securities of each series for any period less than a full month shall be computed on the basis of the actual number of elapsed days based on a 360-day year. SECTION 311. DEFERRALS OF INTEREST PAYMENT DATES. If specified as contemplated by Section 301 with respect to the Securities of a particular series, the Company shall have the right, at any time during the term of such series, from time to time, to defer the payment of interest on such Securities for such period or periods as may be specified as contemplated by Section 301 (each, an "Extension Period"), during which Extension Periods the Company shall have the right to make payments of interest on any Interest Payment Date. No Extension Period shall end on a date other than an Interest Payment Date (and any interest so deferred shall be payable to the Holders on the Regular Record Date prior to the Interest Payment Date which ends the Extension Period). At the end of any such Extension Period the Company shall pay all interest then accrued and unpaid on the Securities (together with Additional Interest thereon, if any, at the rate specified for the Securities of such series to the extent permitted by applicable law), provided, however, that during any such Extension Period, the Company shall not, and shall cause all Subsidiaries not to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock, or (ii) make any payment of principal of, or interest or premium, if any, on or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks PARI PASSU with or junior in right of payment to the Securities of such series or make any guarantee payments with respect to any indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to the Securities of such series (other than (a) dividends or distributions in Common Stock of the Company, (b) redemptions or purchases of any rights pursuant to the Company's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Nevada Power Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under the Company's Stock Purchase and Dividend Reinvestment Plan and any of the Company's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by the Company or any of its Subsidiaries). Prior to the termination of any such Extension Period, the Company may further extend the interest payment period. Notwithstanding anything herein to the contrary, no Extension Period shall exceed the period or periods specified in such Securities or extend beyond the Maturity Date of such Securities. Upon termination of any Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest - 28 - then due on any Interest Payment Date, the Company may elect to begin a new Extension Period, subject to the requirements hereof. No interest shall be due and payable during an Extension Period, except at the end thereof. The Company shall give the Holders of the Securities of such series and the Trustee notice of its election to begin or continue any such Extension Period at least one Business Day prior to the Interest Payment Date or, with respect to the Securities of a series issued to an NVP Trust, prior to the earlier of (i) the date the Distributions on the Preferred Securities of such NVP Trust would have been payable except for the election to begin or continue such Extension Period, or (ii) the date the Administrative Trustees of such NVP Trust are required to give notice to any securities exchange, the Nasdaq National Market or other applicable interdealer quotation system or self-regulatory organization or to holders of such Preferred Securities of the record date or the date such Distributions are payable, but in any event not less than one Business Day prior to such record date. The Trustee shall promptly give notice of the Company's election to begin any such Extension Period to the Holders of the outstanding Securities of such series. SECTION 312. RIGHT OF SET-OFF. With respect to the Securities of a series issued to an NVP Trust, notwithstanding anything to the contrary in this Indenture, the Company shall have the right to set-off any payment it is otherwise required to make thereunder in respect of any such Security to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment under the Nevada Power Guarantee relating to such Security. SECTION 313. AGREED TAX TREATMENT. Each Security issued hereunder shall provide that the Company and, by its acceptance of a Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, such Security agree that for United States federal, state and local tax purposes it is intended that such Security constitute indebtedness. SECTION 314. EXTENSION OF MATURITY DATE; ADJUSTMENT OF MATURITY DATE UPON AN EXCHANGE. If specified as contemplated by Section 301 with respect to the Securities of a particular series, the Company shall have the right to (a) change the Maturity Date of the Securities of such series upon the liquidation of an NVP Trust and the exchange of such Securities for the Preferred Securities of such NVP Trust and (b) extend the Maturity Date for the Securities of such series; provided, that at time any election to extend the Maturity Date is made and at the time of such extension (i) the Company is not in bankruptcy, otherwise insolvent or in liquidation, (ii) the Company is not in default in the payment of any interest or principal on the Securities of such series and no deferred interest payments thereon have accrued and remain unpaid, (iii) the applicable NVP Trust is not in arrears on payments of Distributions on its Preferred Securities and no deferred Distributions thereon are accumulated, (iv) the Securities are rated not less than BBB- by Standard & Poor's Ratings Services or Baa3 by Moody's Investors Service, Inc. or the equivalent by any other nationally recognized statistical rating organization and (v) the extended Maturity Date is no later than the 49th anniversary of the initial issuance of the Preferred Securities of the applicable NVP Trust; and provided, further, that, if the Company exercises its right to liquidate an NVP Trust and exchange the Securities of such series for the Preferred Securities of such NVP Trust as specified in clause (a) above, any changed Maturity Date of the Securities of such series shall be (A) no earlier than the date five years after the initial issuance of the Preferred Securities of the applicable NVP Trust and (B) no later than the date 40 years (plus an extended term of up to an additional 9 years - 29 - if the above-referenced conditions are satisfied) after the date of the initial issuance of the Preferred Securities of the applicable NVP Trust. SECTION 315. CUSIP NUMBERS. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers provided to it by the Company in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of any changes in the CUSIP numbers. ARTICLE IV SATISFACTION AND DISCHARGE SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall cease to be of further effect (except as to (i) any surviving rights of transfer, substitution and exchange of Securities, (ii) rights hereunder of Holders to receive payments of principal of (and premium, if any) and interest on the Securities and other rights, duties and obligations of the Holders as beneficiaries hereof with respect to the amounts, if any, deposited with the Trustee pursuant to this Article IV and (iii) the rights and obligations of the Trustee hereunder), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year of the date of deposit, and the Company, in the case of clause (i) or (ii) above, has deposited or caused to be deposited with the Trustee as trust funds or Government Obligations in trust for such purpose an amount in the currency or currencies in which the Securities of such series are payable sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered - 30 - to the Trustee for cancellation, for principal (and premium, if any) and interest (including any Additional Interest) to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive. SECTION 402. APPLICATION OF TRUST MONEY. Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 or money or Government Obligations deposited with the Trustee pursuant to Section 403, or received by the Trustee in respect of Government Obligations deposited with the Trustee pursuant to Section 403, shall be held in trust and applied by the Trustee, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holder entitled thereto, of the principal (and premium, if any) and interest for the payment of which such money or obligations have been deposited with or received by the Trustee; provided, however, such moneys need not be segregated from other funds except to the extent required by law. SECTION 403. SATISFACTION, DISCHARGE AND DEFEASANCE OF SECURITIES OF ANY SERIES. Unless otherwise provided in the Board Resolution adopted pursuant to Section 301 establishing the terms of the Securities of any series, the Company shall be deemed to have paid and discharged the entire indebtedness on all the Outstanding Securities of any such series and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of such indebtedness, when (1) with respect to all Outstanding Securities of such series, (A) the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for such purpose an amount sufficient to pay and discharge the entire indebtedness on all Outstanding Securities of such series for principal (and premium, if any) and interest (including any Additional Interest) to the Stated Maturity or any Redemption Date as contemplated by the penultimate paragraph of this Section 403, as the case may be; or (B) the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as obligations in trust for such purpose an amount of Government Obligations as will, in the written opinion of independent public - 31 - accountants delivered to the Trustee, together with predetermined and certain income to accrue thereon, without consideration of any reinvestment thereof, be sufficient to pay and discharge when due the entire indebtedness on all Outstanding Securities of such series for principal (and premium, if any) and interest (including any Additional Interest) to the Stated Maturity or any Redemption Date as contemplated by the penultimate paragraph of this Section 403, as the case may be; and (2) the Company has paid or caused to be paid all other sums payable with respect to the Outstanding Securities of such series; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of the entire indebtedness on all Outstanding Securities of any such series have been complied with. Any deposits with the Trustee referred to in Section 403(1) above shall be irrevocable and shall be made under the terms of an escrow trust agreement in form and substance reasonably satisfactory to the Trustee. If any Outstanding Securities of such series are to be redeemed prior to their Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any mandatory sinking fund requirement, the applicable escrow trust agreement shall provide therefor and the Company shall make such arrangements as are satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company. If the Securities of such series are not to become due and payable at their Stated Maturity or upon call for redemption within one year of the date of deposit, then the Company shall give, not later than the date of such deposit, notice of such deposit to the Holders of Securities of such series. Upon the satisfaction of the conditions set forth in this Section 403 with respect to all the Outstanding Securities of any series, the terms and conditions of such series, including the terms and conditions with respect thereto set forth in this Indenture, shall no longer be binding upon, or applicable to, the Company; provided, that the Company shall not be discharged from any payment obligations in respect of Securities of such series which are deemed not to be Outstanding under clause (iii) of the definition thereof if such obligations continue to be valid obligations of the Company under applicable law and provided further that the Company shall not be discharged from its obligation to the Trustee under Section 607. ARTICLE V REMEDIES SECTION 501. EVENTS OF DEFAULT. "Event of Default", wherever used herein with respect to the Securities of any series, means any one or more of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) default in the payment of any interest upon any Security of that series, including any Additional Interest in respect thereof, when it becomes due and payable, and - 32 - continuance of such default for a period of 30 days (subject to the deferral of any due date in the case of an Extension Period); or (2) default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or (3) default in the performance, or breach, in any material respect, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in the performance of which or the breach of which is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied each such notice being referred to herein as a "Notice of Default"; or (4) the entry of a decree or order by a court having jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (5) the institution by the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking its reorganization or relief under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt, or the taking of corporate action by the Company in furtherance of any such action; or (6) any other Event of Default specified with respect to Securities of such series as contemplated by Section 301. SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount (or, if the Securities of that series are Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all the Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), provided that, in the case of the Securities of a series issued to an NVP Trust, if, upon an Event of Default, the Trustee or the Holders - 33 - of not less than 25% in principal amount of the Outstanding Securities of that series fail to declare the principal of all the Securities of that series to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the corresponding series of Preferred Securities then outstanding shall have such right by a notice in writing to the Company and the Trustee; and upon any such declaration such principal amount (or specified amount) of and the accrued interest (including any Additional Interest) on all the Securities of such series shall become immediately due and payable, provided that the payment of principal and interest (including any Additional Interest) on such Securities shall remain subordinated to the extent provided in Article Thirteen. At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences, and, in the case of Securities issued to any NVP Trust, should the Holders of such Securities fail to rescind and annul such declaration, the holders of a majority in aggregate liquidation preference of the related series of Preferred Securities then outstanding shall have such rights, if: (1) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue installments of interest (including any Additional Interest) on all Securities of that series, (B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Securities, and (C) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which has become due solely by such acceleration, have been cured or waived as provided in Section 513. Upon receipt by the Trustee of written notice declaring such an acceleration, or rescission and annulment thereof in accordance with Section 513, with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Holders of Outstanding Securities of such series entitled to join in such notice, which record date shall be at the close of business on the day the Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day - 34 - which is 90 days after such record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice which has been canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 502. SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE. The Company covenants that if: (1) default is made in the payment of any installment of interest (including any Additional Interest) on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (and premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal, including any sinking fund payment or analogous obligations (and premium, if any) and interest (including any Additional Interest); and, in addition thereto, all amounts owing the Trustee under Section 607. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon the Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion (or shall at the direction of the requisite percentage of Holders pursuant to Section 512) proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, (a) the Trustee (irrespective of whether the principal of the Securities of any series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or interest - 35 - (including any Additional Interest)) shall be entitled and empowered, by intervention in such proceeding or otherwise, (i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest (including any Additional Interest) owing and unpaid in respect to the Securities and to file such other papers or documents as may be necessary or advisable and to take any and all actions as are authorized under the Trust Indenture Act in order to have the claims of the Holders and any predecessor to the Trustee under Section 607 and of the Holders allowed in any such judicial proceedings; and (ii) and in particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same in accordance with Section 506; and (b) any custodian, receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee for distribution in accordance with Section 506, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it and any predecessor Trustee under Section 607. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors' or other similar committee. SECTION 505. TRUSTEE MAY ENFORCE CLAIM WITHOUT POSSESSION OF SECURITIES. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of all the amounts owing the Trustee and any predecessor Trustee under Section 607, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. SECTION 506. APPLICATION OF MONEY COLLECTED. Any money or property collected or to be applied by the Trustee with respect to a series of Securities pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money or property on account of principal (or premium, if any) or interest (including any Additional Interest), upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee and any predecessor Trustee under Section 607; - 36 - SECOND: To the payment of the amounts then due and unpaid upon such series of Securities for principal (and premium, if any) and interest (including any Additional Interest), in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such series of Securities for principal (and premium, if any) and interest (including any Additional Interest), respectively; and THIRD: The balance, if any, to the Person or Persons entitled thereto. SECTION 507. LIMITATION ON SUITS. No Holder of any Securities of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or for the appointment of a receiver, assignee, trustee, liquidator, sequestrator (or other similar official) or for any other remedy hereunder, unless: (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Securities, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders. SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right which is absolute and unconditional to receive payment of the principal of (and premium, if any) and (subject to Section 307) interest (including any Additional Interest) on such Security on the respective Stated Maturities expressed in such Security and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. In the case of Securities of a series issued to an NVP Trust, any holder of the corresponding series of Preferred Securities shall have the right set forth in the preceding sentence to directly institute a proceeding for enforcement of payment of the principal of (and premium, if any) and (subject to - 37 - Section 307) interest (including any Additional Interest) on any Security to such holder of the principal amount of or interest on the Securities having a principal amount equal to the aggregate liquidation preference of the corresponding series of Preferred Securities of such holder. SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 511. DELAY OR OMISSION NOT WAIVER. Except as otherwise provided in the last paragraph of Section 306, no delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 512. CONTROL BY HOLDERS. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that: (1) such direction shall not be in conflict with any rule of law or with this Indenture, (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and (3) subject to the provisions of Section 601, the Trustee shall have the right to decline to follow such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would be unjustly prejudicial to the Holders not joining in any such direction or would potentially involve the Trustee in personal liability. - 38 - Upon receipt by the Trustee of any written notice by the requisite number of Holders directing the time, method or place of conducting any such proceeding or exercising any such trust or power, with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Holders of Outstanding Securities of such series entitled to join in such notice, which record date shall be at the close of business on the day the Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided, that, unless the Holders of a majority in principal amount of the Outstanding Securities of such series shall have joined in such notice prior to the day which is 90 days after such record date, such notice shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new notice identical to a notice which has been canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 512. SECTION 513. WAIVER OF PAST DEFAULTS. The Holders of a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder and its consequences with respect to such series, except a default: (1) in the payment of the principal of (or premium, if any) or interest (including any Additional Interest) (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Trustee) on any Security of such series, or (2) in respect of a covenant or provision hereof which under this Indenture cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected, and, in the case of Securities of a series issued to an NVP Trust, should the holders of such Securities fail to waive such default, the holders of a majority in aggregate liquidation preference of the related series of Preferred Securities then outstanding shall have such right. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. No such rescission shall affect any subsequent default or impair any right consequent thereon. SECTION 514. UNDERTAKING FOR COSTS. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant - 39 - in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest (including any Additional Interest) on any Security on or after the respective Stated Maturities expressed in such Security. SECTION 515. WAIVER OF USURY, STAY OR EXTENSION LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VI THE TRUSTEE SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES. (a) Except during the continuance of an Event of Default, (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default actually known to a Responsible Officer of the Trustee has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct except that - 40 - (1) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of Holders pursuant to Section 512 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series. (d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (e) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 602. NOTICE OF DEFAULTS. Within 90 days after knowledge (as defined in Section 603(i)) by a Responsible Officer of the Trustee of the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of such series, as their names and addresses appear in the Securities Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest (including any Additional Interest) on any Security of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of Securities of such series; and provided, further, that, in the case of any default of the character specified in Section 501(3), no such notice to Holders of Securities of such series shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. SECTION 603. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of Section 601: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, Security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; - 41 - (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) shall be entitled, in the absence of bad faith on its part, to rely upon an Officers' Certificate; (d) the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, indenture, Security or other paper or document, but the Trustee in its discretion may make such inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (h) the Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Indenture; (i) the Trustee shall not be charged with knowledge of any Event of Default unless either (1) a Responsible Officer of the Trustee shall have actual knowledge or (2) the Trustee shall have received notice thereof in accordance with Section 105(1) hereof from the Company or a Holder; and (j) no permissive power or authority available to the Trustee shall be construed as a duty. SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of the Securities or the proceeds thereof. SECTION 605. MAY HOLD SECURITIES. The Trustee, any Paying Agent, Securities Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Securities Registrar or such other agent. - 42 - SECTION 606. MONEY HELD IN TRUST. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. SECTION 607. COMPENSATION AND REIMBURSEMENT. The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder in such amounts as the Company and the Trustee shall agree from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense (including the reasonable compensation and the expenses and disbursements of its agents and counsel) incurred without negligence or bad faith, arising out of or in connection with the acceptance or administration of this trust or the performance of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. This indemnification shall survive the termination of this Agreement. To secure the Company's payment obligations in this Section, the Company and the Holders agree that the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee. Such lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 501(4) or (5) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Reform Act of 1978 or a successor statute. SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS. The Trustee for the Securities of any series issued hereunder shall be subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the second to last paragraph of Section 310(b) of the Trust Indenture Act. SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be a Trustee hereunder which shall be (a) a corporation organized and doing business under the laws of the United States of America or of any State, Territory or the District of Columbia, authorized under - 43 - such laws to exercise corporate trust powers and subject to supervision or examination by federal, state, territorial or District of Columbia authority, or (b) a corporation or other Person organized and doing business under the laws of a foreign government that is permitted to act as Trustee pursuant to a rule, regulation or order of the Commission, authorized under such laws to exercise corporate trust powers, and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees, in either case having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by federal or state authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then, for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Neither the Company nor any Person directly or indirectly controlling, controlled by or under common control with the Company shall serve as Trustee for the Securities of any series issued hereunder. SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 611. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or - 44 - (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company, acting under authority of a Board Resolution, may remove the Trustee, or (ii) subject to Section 514, any Holder who has been a Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee with respect to the Securities of that or those series. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee with respect to the Securities of such series and supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a Holder of a Security for at least six months may, subject to Section 514, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Securities of such series as their names and addresses appear in the Securities Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. - 45 - (b) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be. (c) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated, and in case any Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor - 46 - Trustee or in the name of such successor Trustee, and in all cases the certificate of authentication shall have the full force which it is provided anywhere in the Securities or in this Indenture that the certificate of the Trustee shall have. SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, or of any State, Territory or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by federal or state authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of an Authenticating Agent shall be the successor Authenticating Agent hereunder, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any - 47 - successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provision of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607. If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: This is one of the Securities referred to in the within mentioned Indenture. _________________________ _________________________ As Trustee By: ____________________ As Authenticating Agent By: ____________________ Authorized Officer ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. The Company will furnish or cause to be furnished to the Trustee: (a) semi-annually, not more than 15 days after January 15 and July 15, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such January 1 and July 1, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished, excluding from any such list names and addresses received by the Trustee in its capacity as Securities Registrar. SECTION 702. PRESERVATION OF INFORMATION, COMMUNICATIONS TO HOLDERS. - 48 - (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Securities Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided in the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of information as to the names and addresses of the Holders made pursuant to the Trust Indenture Act. SECTION 703. REPORTS BY TRUSTEE. (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act, at the times and in the manner provided pursuant thereto. (b) Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 15 in each calendar year, commencing with the first July 15 after the first issuance of Securities under this Indenture. (c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange or self-regulatory organization upon which the Securities are listed or traded and also with the Commission. The Company will promptly notify the Trustee whenever the Securities are listed or traded on any stock exchange or self-regulatory organization. SECTION 704. REPORTS BY COMPANY. The Company shall file with the Trustee and with the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided in the Trust Indenture Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 shall be filed with the Trustee within 15 days after the same is required to be filed with the Commission. Notwithstanding that the Company may not be required to remain subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company shall continue to file with the Commission and provide the Trustee with the annual reports and the information, documents and other reports which are specified in Sections 13 and 15(d) of the - 49 - Securities Exchange Act of 1934. The Company also shall comply with the other provisions of Trust Indenture Act Section 314(a). ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and no Person shall consolidate with or merge into the Company or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless: (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, partnership or trust, shall be organized and existing under the laws of the United States of America or any State or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest (including any Additional Interest) on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event of Default, shall have happened and be continuing; (3) in the case of the Securities of a series issued to an NVP Trust, such consolidation, merger, conveyance, transfer or lease is permitted under the related Trust Agreement and Nevada Power Guarantee and does not give rise to any breach or violation of the related Trust Agreement or Nevada Power Guarantee; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Independent Counsel each stating that such consolidation, merger, conveyance, transfer or lease and any such supplemental indenture complies with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with; and the Trustee, subject to Section 601, may rely upon such Officers' Certificate and Opinion of Independent Counsel as conclusive evidence that such transaction complies with this Section 801. - 50 - SECTION 802. SUCCESSOR PERSON SUBSTITUTED. Upon any consolidation or merger by the Company with or into any other Person, or any conveyance, transfer or lease by the Company of its properties and assets substantially as an entirety to any Person in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; and in the event of any such conveyance, transfer or lease the Company shall be discharged from all obligations and covenants under the Indenture and the Securities and may be dissolved and liquidated. Such successor Person may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor Person instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication pursuant to such provisions and any Securities which such successor Person thereafter shall cause to be signed and delivered to the Trustee on its behalf for the purpose pursuant to such provisions. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale, conveyance or lease, such changes in phraseology and form may be made in the Securities thereafter to be issued as may be appropriate. ARTICLE IX SUPPLEMENTAL INDENTURES SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Securities contained; or (2) to convey, transfer, assign, mortgage or pledge any property to or with the Trustee or to surrender any right or power herein conferred upon the Company; or - 51 - (3) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or (4) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or (5) to add any additional Events of Default; or (6) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision; or (7) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (7) shall not materially adversely affect the interest of the Holders of Securities of any series or, in the case of the Securities of a series issued to an NVP Trust and for so long as any of the corresponding series of Preferred Securities shall remain outstanding, the holders of such Preferred Securities; or (8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee; or (9) to comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act, if qualified. SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the consent of the Holders of a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the written consent of the Holder of each Outstanding Security affected thereby, - 52 - (1) except to the extent permitted by Section 311 or as otherwise specified as contemplated by Section 301 with respect to the extension of the interest payment period of the Securities of any series, change the Stated Maturity of the principal of, or any installment of interest (including any Additional Interest) on, any Security, or reduce the principal amount thereof or the rate of interest thereon or reduce any premium payable upon the redemption thereof, or reduce the amount of principal of a Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change the place of payment where, or the coin or currency in which, any Security or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the date fixed for redemption thereof), or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 513 or Section 1005, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security affected thereby; or (4) modify the provisions in Article Thirteen of this Indenture with respect to the subordination of Outstanding Securities of any series in a manner adverse to the Holders thereof; PROVIDED that, in the case of the Securities of a series issued to an NVP Trust, so long as any of the corresponding series of Preferred Securities remains outstanding, no such amendment shall be made that adversely affects the holders of such Preferred Securities, and no termination of this Indenture shall occur, and no waiver of any Event of Default or compliance with any covenant under this Indenture shall be effective, without the prior consent of the holders of at least a majority of the aggregate liquidation preference of such Preferred Securities then outstanding unless and until the principal (and premium, if any) of the Securities of such series and all accrued and unpaid interest (including any Additional Interest) thereon have been paid in full; and PROVIDED, FURTHER that in the case of the Securities of a series issued to an NVP Trust, so long as any of the corresponding series of Preferred Securities remains outstanding, no amendment shall be made to Section 508 under this Indenture without the prior consent of the holders of each Preferred Security then outstanding unless and until the principal (and premium, if any) of the Securities of such series and all accrued and unpaid interest (including any Additional Interest) thereon have been paid in full. A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture that has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such - 53 - covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture, and that all conditions precedent have been complied with. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which potentially affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Company, bear a notation in form approved by the Company as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. - 54 - ARTICLE X COVENANTS SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company covenants and agrees for the benefit of each series of securities that it will duly and punctually pay the principal of (and premium, if any) and interest on the Securities of that series in accordance with the terms of such Securities and this Indenture. SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in each Place of Payment for any series, an office or agency where Securities of that series may be presented or surrendered for payment and an office or agency where Securities may be surrendered for transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company initially appoints the Trustee, acting through its Corporate Trust Office, as its agent for said purposes. The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain such office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all of such purposes, and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation and any change in the location of any such office or agency. SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities of such series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Holders or otherwise disposed of as herein provided, and will immediately notify the Trustee of its failure so to act. Whenever the Company shall have one or more Paying Agents, it will, prior to 10:00 a.m. New York City time on each due date of the principal of or interest on any Securities, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal - 55 - and premium (if any) or interest, and (unless such Paying Agent is the Trustee) the Company will immediately notify the Trustee of its failure so to act. The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee immediate written notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal (and premium, if any) or interest; (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent; and (4) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by the Company or any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or unclaimed property law) be paid on Company Request to the Company, or (if then held by the Company) shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or unclaimed property law) be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. - 56 - SECTION 1004. STATEMENT AS TO COMPLIANCE. The Company shall deliver to the Trustee, within 120 days after the end of each calendar year of the Company ending after the date hereof, an Officers' Certificate covering the preceding calendar year, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance, observance or fulfillment of or compliance with any of the terms, provisions, covenants and conditions of this Indenture, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. For the purpose of this Section 1004, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture. SECTION 1005. WAIVER OF CERTAIN COVENANTS. The Company may omit in any particular instance to comply with any covenant or condition as specified as contemplated by Section 301 with respect to the Securities of any series, if before or after the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company in respect of any such covenant or condition shall remain in full force and effect. SECTION 1006. ADDITIONAL SUMS. In the case of the Securities of a series issued to an NVP Trust, except as otherwise specified as contemplated by Section 301, in the event that (i) an NVP Trust is the Holder of all of the Outstanding Securities of such series, (ii) a Tax Event in respect of such NVP Trust shall have occurred and be continuing and (iii) the Company shall not have (x) redeemed the Securities of such series pursuant to Section 1107(b) or (y) terminated such NVP Trust pursuant to Section 902(b) of the related Trust Agreement, the Company shall pay to such NVP Trust (and its permitted successors or assigns under the related Trust Agreement) for so long as such NVP Trust (or its permitted successor or assignee) is the registered Holder of any Securities of such series, such additional amounts as may be necessary in order that the amount of distributions (including any Additional Amounts (as defined in the Trust Agreement)) then due and payable by such NVP Trust on the related Preferred Securities and Common Securities that at any time remain outstanding in accordance with the terms thereof shall not be reduced as a result of any Additional Taxes (the "Additional Sums"). Whenever in this Indenture or the Securities there is a reference in any context to the payment of principal of or interest on the Securities, such mention shall be deemed to include mention of the payments of the Additional Sums provided for in this paragraph to the extent that, in such context, Additional Sums are, were or would be payable in respect thereof pursuant to the provisions of this paragraph and express mention of the payment of Additional Sums (if applicable) in any provisions hereof shall not be construed as excluding Additional Sums in those provisions hereof where such express mention is not made, provided, however, that the extension of an interest payment period pursuant to Section 311 or the Securities shall not extend the payment of any Additional Sums that may be due and payable during such interest payment period. - 57 - SECTION 1007. ADDITIONAL COVENANTS. The Company covenants and agrees with each Holder of Securities of a series issued to an NVP Trust that it will not, and it will cause all Subsidiaries not to, (a) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of the Company's capital stock, or (b) make any payment of principal of, or interest or premium, if any, on or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks pari passu with or junior in right of payment to the Securities of such series or make any guarantee payments with respect to any guarantee of any indebtedness if such guarantee ranks pari passu or junior in right of payment to the Securities of such series (other than (a) dividends or distributions in Common Stock of the Company, (b) redemptions or purchases of any rights pursuant to the Company's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Nevada Power Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under the Company's Stock Purchase and Dividend Reinvestment Plan and any of the Company's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by the Company or any of its Subsidiaries) if at such time (i) there shall have occurred (A) any Event of Default or (B) any event that with the giving of notice or the lapse of time or both would constitute an Event of Default and in the case of (B), in respect of which the Company shall not have taken reasonable steps to cure, (ii) the Company shall be in default with respect to its payment of any obligations under the related Nevada Power Guarantee or (iii) the Company shall have given notice of its election to begin an Extension Period as provided herein and shall not have rescinded such notice, or such period, or any extension thereof, shall be continuing. The Company also covenants with each Holder of Securities of a series issued to an NVP Trust (i) to maintain directly or indirectly 100% ownership of the Common Securities of such NVP Trust; provided, however, that any permitted successor of the Company hereunder may succeed to the Company's ownership of such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate such NVP Trust, except (a) in connection with a distribution of the Securities of such series to the holders of Preferred Securities in liquidation of such NVP Trust or (b) in connection with certain mergers, consolidations or amalgamations permitted by the related Trust Agreement, (iii) remain the sole Depositor (as defined in the Trust Agreement) under each Trust Agreement and timely perform in all respects all of its duties as Depositor and (iv) to use its reasonable efforts, consistent with the terms and provisions of such Trust Agreement, to cause such NVP Trust to remain classified as a grantor trust and not as an association taxable as a corporation for United States federal income tax purposes. - 58 - ARTICLE XI REDEMPTION OF SECURITIES SECTION 1101. APPLICABILITY OF THIS ARTICLE. Redemption of Securities (whether by operation of a sinking fund or otherwise) as permitted or required by any form of Security issued pursuant to this Indenture shall be made in accordance with such form of Security and this Article; provided, however, that if any provision of any such form of Security shall conflict with any provision of this Article, the provision of such form of Security shall govern. Except as otherwise set forth in the form of Security for such series, each Security shall be subject to partial redemption only in the principal amount of $25 or, in the case of the Securities of a series issued to an NVP Trust, $25, or integral multiples thereof. SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the Company to redeem any Securities shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the Company of less than all of the Securities of any particular series and having the same terms, the Company shall, not less than 30 or more than 60 days prior to the date fixed for redemption (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such date and of the principal amount of Securities of that series to be redeemed. In the case of any redemption of Securities, the Company shall furnish the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing compliance with all conditions precedent. SECTION 1103. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption pro rata or, by such other method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence. The Trustee shall promptly notify the Company in writing of the Securities selected for partial redemption and the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the - 59 - portion of the principal amount of such Security which has been or is to be redeemed. If the Company shall so direct in writing, Securities registered in the name of the Company, any Affiliate or any Subsidiary thereof shall not be included in the Securities selected for redemption. SECTION 1104. NOTICE OF REDEMPTION. Notice of redemption shall be given by the Company or by the Trustee at the direction and expense of the Company, by first-class mail, postage prepaid, mailed not later than the thirtieth day, and not earlier than the sixtieth day, prior to the date fixed for redemption, to each Holder of Securities to be redeemed, at the address of such Holder as it appears in the Securities Register. With respect to Securities of each series to be redeemed, each notice of redemption shall state: (a) the date fixed for redemption for Securities of such series; (b) the redemption price at which Securities of such series are to be redeemed; (c) if less than all Outstanding Securities of such particular series and having the same terms are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the particular Securities to be redeemed; (d) that on the date fixed for redemption, the redemption price at which such Securities are to be redeemed will become due and payable upon each such Security or portion thereof, and that interest thereon, if any, shall cease to accrue on and after said date; (e) the place or places where such Securities are to be surrendered for payment of the redemption price at which such Securities are to be redeemed; and (f) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company and shall not be irrevocable. The notice if mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, a failure to give such notice by mail or any defect in the notice to the Holder of any Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security. SECTION 1105. DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m. New York City time on the Redemption Date specified in the notice of redemption given as provided in Section 1104, the Company will deposit with the Trustee or with - 60 - one or more paying agents an amount of money sufficient to redeem on the redemption date all the Securities so called for redemption at the applicable redemption price. SECTION 1106. PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If any notice of redemption has been given as provided in Section 1104, the Securities or portion of Securities with respect to which such notice has been given shall become due and payable on the date and at the place or places stated in such notice at the applicable redemption price. On presentation and surrender of such Securities at a place of payment in said notice specified, the said securities or the specified portions thereof shall be paid and redeemed by the Company at the applicable redemption price. Upon presentation of any Security redeemed in part only, the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Security or Securities of the same series, of authorized denominations, in aggregate principal amount equal to the unredeemed portion of the Security so presented and having the same Original Issue Date, Stated Maturity and terms. If a Global Security is so surrendered, such new Security will also be a new Global Security. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal of and premium, if any, on such Security shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. SECTION 1107. COMPANY'S RIGHT OF REDEMPTION. (a) Unless otherwise specified as contemplated by Section 301 with respect to the Securities of a particular series and notwithstanding any additional redemption rights that may be so specified, the Company may, at its option, redeem the Securities of any series after their date of issuance in whole at any time or in part from time to time, subject to the provisions of this clause (a) and the other provisions of this Article Eleven. Unless otherwise specified as contemplated by Section 301 with respect to the Securities of a particular series, the redemption price for any Security so redeemed pursuant to this clause (a) shall be equal to 100% of the principal amount of such Securities plus any accrued and unpaid interest, including any Additional Interest, to the date fixed for redemption. The Company shall not redeem the Securities in part unless all accrued and unpaid interest (including any Additional Interest) has been paid in full on all Securities Outstanding for all interest periods terminating on or prior to the date fixed for redemption. (b) In the case of the Securities of a series issued to an NVP Trust, except as otherwise specified as contemplated by Section 301, if a Special Event in respect of such NVP Trust shall occur and be continuing, the Company may, at its option, redeem the Securities of such series within 90 days of the occurrence of such Special Event, in whole but not in part, subject to the provisions of this clause (b) and the other provisions of this Article Eleven. The redemption price for any Security so redeemed pursuant to this clause (b) shall be equal to 100% of the principal amount - 61 - of such Securities then Outstanding plus accrued and unpaid interest, including any Additional Interest, to the date fixed for redemption. ARTICLE XII SINKING FUNDS SECTION 1201. APPLICABILITY OF ARTICLE. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301 for such Securities. The minimum amount of any sinking fund payment provided for by the terms of any Securities of any series is herein referred to as a "mandatory sinking fund payment", and any sinking fund payment in excess of such minimum amount which is permitted to be made by the terms of such Securities of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of any Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of such Securities. SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. In lieu of making all or any part of a mandatory sinking fund payment with respect to any Securities of a series in cash, the Company may at its option, at any time no more than 16 months and no less than 30 days prior to the date on which such sinking fund payment is due, deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired by the Company, except Securities of such series that have been redeemed through the application of mandatory or optional sinking fund payments pursuant to the terms of the Securities of such series, accompanied by a Company Order instructing the Trustee to credit such obligations and stating that the Securities of such series were originally issued by the Company by way of bona fide sale or other negotiation for value; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the redemption price for such Securities, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash in the currency in which the Securities of such series are payable (except as provided pursuant to Section 301) and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Such Officers' Certificate shall be - 62 - irrevocable and upon its delivery the Company shall be obligated to make the cash payment or payments therein referred to, if any, on or before the succeeding sinking fund payment date. In the case of the failure of the Company to deliver such Officers' Certificate (or, as required by this Indenture, the Securities, specified in such Officer's Certificate), the sinking fund payment due on the succeeding sinking fund payment date for such series shall be paid entirely in cash and shall be sufficient to redeem the principal amount of the Securities of such series subject to a mandatory sinking fund payment without the right to deliver or credit securities as provided in Section 1202 and without the right to make the optional sinking fund payment with respect to such series at such time. Any sinking fund payment or payments (mandatory or optional) made in cash plus any unused balance of any preceding sinking fund payments made with respect to the Securities of any particular series shall be applied by the Trustee (or by the Company if the Company is acting as its own Paying Agent) on the sinking fund payment date on which such payment is made (or, if such payment is made before a sinking fund payment date, on the sinking fund payment date immediately following the date of such payment) to the redemption of Securities of such series at the redemption price specified in such Securities with respect to the sinking fund. Any sinking fund moneys not so applied or allocated by the Trustee (or by the Company if the Company is acting as its own Paying Agent, segregated and held in trust as provided in Section 1003) for such series and together with such payment (or such amount so segregated) shall be applied in accordance with the provisions of this Section 1203. Any and all sinking fund moneys with respect to the Securities of any particular series held by the Trustee (or if the Company is acting as its own Paying Agent, segregated and held in trust as provided in Section 1003) on the last sinking fund payment date with respect to Securities of such series and not held for the payment or redemption of particular Securities of such series shall be applied by the Trustee (or by the Company if the Company is acting as its own Paying Agent), together with other moneys, if necessary, to be deposited (or segregated) sufficient for the purpose, to the payment of the principal of the Securities of such series at Maturity. The Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 1106. On or before each sinking fund payment date, the Company shall pay to the Trustee (or, if the Company is acting as its own Paying Agent, the Company shall segregate and hold in trust as provided in Section 1003) in cash a sum in the currency in which Securities of such series are payable (except as provided pursuant to Section 301) equal to the principal and any interest accrued to the redemption date for Securities or portions thereof to be redeemed on such sinking fund payment date pursuant to this Section 1203. Neither the Trustee nor the Company shall redeem any Securities of a series with sinking fund moneys or mail any notice of redemption of Securities of such series by operation of the sinking fund for such series during the continuance of a default in payment of interest, if any, on any Securities of such series or of any Event of Default (other than an Event of Default occurring as a consequence of this paragraph) with respect to the Securities of such series, except that if the notice of redemption shall have been provided in accordance with the provisions hereof, the Trustee (or the Company if the Company is then acting as its own Paying Agent) shall redeem such Securities if cash sufficient for that purpose shall be deposited with the Trustee (or segregated by the Company) for that purpose in accordance with the terms of this Article Twelve. Except as aforesaid, any moneys - 63 - in the sinking fund for such series at the time when any such default or Event of Default shall occur and any moneys thereafter paid into such sinking fund shall, during the continuance of such default or Event of Default, be held as security for the payment of the Securities of such series; provided, however, that in case such default or Event of Default shall have been cured or waived herein, such moneys shall thereafter be applied on the next sinking fund payment date for the Securities of such series on which such moneys may be applied pursuant to the provisions of this Section 1203. ARTICLE XIII SUBORDINATION OF SECURITIES SECTION 1301. SECURITIES SUBORDINATE TO SENIOR DEBT. The Company covenants and agrees, and each Holder of a Security, by its acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article, the payment of the principal of (and premium, if any) and interest (including any Additional Interest) on each and all of the Securities are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all amounts then due and payable in respect of all Senior Debt. SECTION 1302. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company (each such event, if any, herein sometimes referred to as a "Proceeding"), then the holders of Senior Debt shall be entitled to receive payment in full of principal of (and premium, if any) and interest, if any, on such Senior Debt, or provision shall be made for such payment in cash or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt, before the Holders of the Securities are entitled to receive or retain any payment or distribution of any kind or character, whether in cash, property or securities (including any payment or distribution which may be payable or deliverable by reason of the payment of any other Debt of the Company (including any series of the Securities) subordinated to the payment of the Securities, such payment or distribution being hereinafter referred to as a "Junior Subordinated Payment"), on account of principal of (or premium, if any) or interest (including any Additional Interest) on the Securities or on account of the purchase or other acquisition of Securities by the Company or any Subsidiary and to that end the holders of Senior Debt shall be entitled to receive, for application to the payment thereof, any payment or distribution of any kind or character, whether in cash, property or securities, including any Junior Subordinated Payment, which may be payable or deliverable in respect of the Securities in any such Proceeding. In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the Holder of any Security shall have received any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, including any Junior Subordinated Payment, before all Senior Debt is paid in full or payment thereof is provided for in cash or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt, and if written notice of such - 64 - fact shall, at or prior to the time of such payment or distribution, have been received by a Responsible Officer of the Trustee or, as the case may be, such Holder, then and in such event such payment or distribution shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of the Company for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. For purposes of this Article only, the words "any payment or distribution of any kind or character, whether in cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment which securities are subordinated in right of payment to all then outstanding Senior Debt to substantially the same extent as the Securities are so subordinated as provided in this Article. The consolidation of the Company with, or the merger of the Company into, another Person or the liquidation or dissolution of the Company following the sale of all or substantially all of its properties and assets as an entirety to another Person or the liquidation or dissolution of the Company following the sale of all or substantially all of its properties and assets as an entirety to another Person upon the terms and conditions set forth in Article Eight shall not be deemed a Proceeding for the purposes of this Section if the Person formed by such consolidation or into which the Company is merged or the Person which acquires by sale such properties and assets as an entirety, as the case may be, shall, as a part of such consolidation, merger, or sale comply with the conditions set forth in Article Eight. SECTION 1303. PRIOR PAYMENT TO SENIOR DEBT UPON ACCELERATION OF SECURITIES. In the event that any Securities are declared due and payable before their Maturity, then and in such event the holders of the Senior Debt outstanding at the time such Securities so become due and payable shall be entitled to receive payment in full of all amounts due on or in respect of such Senior Debt (including any amounts due upon acceleration), or provision shall be made for such payment in cash or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt, before the Holders of the Securities are entitled to receive any payment or distribution of any kind or character, whether in cash, properties or securities (including any Junior Subordinated Payment) by the Company on account of the principal of (or premium, if any) or interest (including any Additional Interest) on the Securities or on account of the purchase or other acquisition of Securities by the Company or any Subsidiary; provided, however, that nothing in this Section shall prevent the satisfaction of any sinking fund payment in accordance with this Indenture or as otherwise specified as contemplated by Section 301 for the Securities of any series by delivering and crediting pursuant to Section 1202 or as otherwise specified as contemplated by Section 301 for the Securities of any series Securities which have been acquired (upon redemption or otherwise) prior to such declaration of acceleration. In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, and if written notice of such fact shall, at or prior to the time of such payment, have been received by a Responsible Officer of the Trustee or, as the case may be, such Holder, then and in such event such payment shall be paid over and delivered forthwith to the Company. - 65 - The provisions of this Section shall not apply to any payment with respect to which Section 1302 would be applicable. SECTION 1304. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT. (a) In the event and during the continuation of any default in the payment of principal of (or premium, if any) or interest on any Senior Debt, or in the event that any event of default with respect to any Senior Debt shall have occurred and be continuing and shall have resulted in such Senior Debt becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, unless and until such event of default shall have been cured or waived or shall have ceased to exist and such acceleration shall have been rescinded or annulled, or (b) in the event any judicial proceeding shall be pending with respect to any such default in payment or such event or default, then no payment or distribution of any kind or character, whether in cash, properties or securities (including any Junior Subordinated Payment) shall be made by the Company on account of principal of (or premium, if any) or interest (including any Additional Interest), if any, on the Securities or on account of the purchase or other acquisition of Securities by the Company or any Subsidiary; provided, however, that nothing in this Section shall prevent the satisfaction of any sinking fund payment in accordance with this Indenture or as otherwise specified as contemplated by Section 301 for the Securities of any series by delivering and crediting pursuant to Section 1202 or as otherwise specified as contemplated by Section 301 for the Securities of any series Securities which have been acquired (upon redemption or otherwise) prior to such default in payment or event of default. In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, and if written notice of such fact shall, at or prior to the time of such payment, have been received by a Responsible Officer of the Trustee or, as the case may be, such Holder, then and in such event such payment shall be paid over and delivered forthwith to the Company. The provisions of this Section shall not apply to any payment with respect to which Section 1302 would be applicable. SECTION 1305. PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities shall prevent (a) the Company, at any time except during the pendency of any Proceeding referred to in Section 1302 or under the conditions described in Sections 1303 and 1304, from making payments at any time of principal of (and premium, if any) or interest on the Securities, or (b) the application by the Trustee of any money or Government Obligations deposited with it hereunder to the payment of or on account of the principal of (and premium, if any) or interest (including any Additional Interest) on the Securities or the retention of such payment by the Holders, if, at the time of such application by the Trustee, it did not have knowledge that such payment would have been prohibited by the provisions of this Article. - 66 - SECTION 1306. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT. Subject to the payment in full of all Senior Debt, or the provision for such payment in cash or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt, the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Debt pursuant to the provisions of this Article (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated to Senior Debt of the Company to substantially the same extent as the Securities are subordinated to the Senior Debt and is entitled to like rights of subrogation by reason of any payments or distributions made to holders of such Senior Debt) to the rights of the holders of such Senior Debt to receive payments and distributions of cash, property and securities applicable to the Senior Debt until the principal of (and premium, if any) and interest on the Securities shall be paid in full. For purposes of such subrogation or assignment, no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the holders of Senior Debt by Holders of the Securities or the Trustee, shall, as among the Company, its creditors other than holders of Senior Debt, and the Holders of the Securities, be deemed to be a payment or distribution by the Company to or on account of the Senior Debt. SECTION 1307. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Debt on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall (a) impair, as between the Company and the Holders of the Securities, the obligations of the Company, which are absolute and unconditional, to pay to the Holders of the Securities the principal of (and premium, if any) and interest (including any Additional Interest) on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Company of the Holders of the Securities and creditors of the Company other than their rights in relation to the holders of Senior Debt; or (c) prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture including, without limitation, filing and voting claims in any Proceeding, subject to the rights, if any, under this Article of the holders of Senior Debt to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder. SECTION 1308. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a Security by his or her acceptance thereof authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination provided in this Article and appoints the Trustee his or her attorney-in-fact for any and all such purposes. - 67 - SECTION 1309. NO WAIVER OF SUBORDINATION PROVISIONS. No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or be otherwise charged with. SECTION 1310. NOTICE TO TRUSTEE. The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until a Responsible Officer of the Trustee shall have received written notice thereof from the Company or a holder of Senior Debt or from any trustee, agent or representative therefor (whether or not the facts contained in such notice are true); provided, however, that if the Trustee shall not have received the notice provided for in this Section at least two Business Days prior to the date upon which by the terms hereof any monies may become payable for any purpose (including, without limitation, the payment of the principal of (and premium, if any) or interest (including any Additional Interest) on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary which may be received by it within two Business Days prior to such date. SECTION 1311. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Article Six, and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. SECTION 1312. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT. The Trustee, in its capacity as trustee under this Indenture, shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or to any other Person cash, property or securities to which any holders of Senior Debt shall be entitled by virtue of this Article or otherwise. - 68 - SECTION 1313. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT; PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Debt which may at any time be held by it, to the same extent as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. SECTION 1314. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee. SECTION 1315. CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT. For the purposes of this Article only, (a) the issuance and delivery of junior securities upon conversion or exchange of Securities shall not be deemed to constitute a payment or distribution on account of the principal of (or premium, if any) or interest (including any Additional Interest) on Securities or on account of the purchase or other acquisition of Securities, and (b) the payment, issuance or delivery of cash, property or securities (other than junior securities) upon conversion or exchange of a Security shall be deemed to constitute payment on account of the principal of such security. For the purposes of this Section, the term "junior securities" means (i) shares of any stock of any class of the Company and (ii) securities of the Company which are subordinated in right of payment to all Senior Debt which may be outstanding at the time of issuance or delivery of such securities to substantially the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article. * * * * This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. - 69 - IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. NEVADA POWER COMPANY By:________________________________________ Attest: ________________________________ IBJ SCHRODER BANK & TRUST COMPANY, as Trustee By:________________________________________ - 70 - State of : : ss. County of : On the _____ day of _________, ___ before me personally came __________, to me known, who being duly sworn, did depose and say that he/she is ______ of Nevada Power Company, one of the corporations described in and which executed the foregoing instrument; that the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. ______________________________ Notary Public My Commission Expires: State of : : ss. County of : On the _____ day of _______, ____ before me personally came __________, to me known, who being duly sworn, did depose and say that he/she is _________ of ____________________, a _____________________, described in and which executed the foregoing instrument; that he knows the seal of said association; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said association, and that he signed his name thereto by like authority. ______________________________ Notary Public My Commission Expires: - 71 - EX-4.02 4 EXHIBIT 4.02 [LETTERHEAD] EXHIBIT 4.02 CERTIFICATE OF TRUST OF NVP CAPITAL I THIS Certificate of Trust of NVP CAPITAL I (the "Trust") dated January 31, 1997, is being duly executed and filed by Delaware Trust Capital Management, Inc., a Delaware banking corporation, as trustee, to form a business trust under the Delaware Business Trust Act (12 DEL. C. Section 3801, ET SEQ.). 1. NAME. The name of the business trust formed hereby is NVP CAPITAL I. 2. DELAWARE TRUSTEE. The name and business address of the trustee of the Trust in the State of Delaware is Delaware Trust Capital Management, Inc., 900 Market Street, 548212, Wilmington, Delaware 19801, Attn: Corporate Trust Department. 3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon filing with the Secretary of State. IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust, has executed this Certificate of Trust as of the date first above written. DELAWARE TRUST CAPITAL MANAGEMENT, INC., as trustee By: /s/ Richard N. Smith ---------------------------- Name: Richard N. Smith Title: Vice President EX-4.03 5 EXHIBIT 4.03 EXHIBIT 4.03 TRUST AGREEMENT This TRUST AGREEMENT, dated as of January 31, 1997 (this "Trust Agreement"), between (i) NEVADA POWER COMPANY, a Nevada corporation (the "Depositor"), and (ii) DELAWARE TRUST CAPITAL MANAGEMENT, INC., a Delaware banking corporation (the "Trustee"). The Depositor and the Trustee hereby agree as follows: 1. The trust created hereby (the "Trust") shall be known as "NVP Capital I" in which name the Trustee, or the Depositor to the extent provided herein, may engage in the transactions contemplated hereby, make and execute contracts, and sue and be sued. 2. The Depositor hereby assigns, transfers conveys and sets over to the Trustee the sum of $10. The Trustee hereby acknowledges receipt of such amount in trust from the Depositor, which amount shall constitute the initial trust estate. The Trustee hereby declares that it will hold the trust estate in trust for the Depositor. It is the intention of the parties hereto that the Trust created hereby constitute a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 DEL. C. Section 3801, ET. SEQ. (the "Business Trust Act"), and that this document constitute the governing instrument of the Trust. The Trustee is hereby authorized and directed to execute and file a certificate of trust with the Delaware Secretary of State in accordance with the provisions of the Business Trust Act. 3. The Depositor and the Trustee will enter into an amended and restated Trust Agreement, satisfactory to each such party and substantially in the form included as an exhibit to the 1933 Act Registration Statement (as defined below), to provide for the contemplated operation of the Trust created hereby and the issuance of the Preferred Securities and Common Securities referred to therein. Prior to the execution and delivery of such amended and restated Trust Agreement, the Trustee shall not have any duty or obligation hereunder or with respect to the trust estate, except as otherwise required by applicable law or as may be necessary to obtain prior to such execution and delivery of any licenses, consents or approvals required by applicable law or otherwise. 4. The Depositor and the Trustee hereby authorize and direct the Depositor, as the sponsor of the Trust, (i) to file with the Securities and Exchange Commission (the "Commission") and execute, in each case on behalf of the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act Registration Statement"), including any pre-effective or post-effective amendments to the 1933 Act Registration Statement, relating to the registration under the Securities Act of 1933, as amended, of the Preferred Securities of the Trust and possible certain other securities and (b) a Registration Statement on Form 8-A (the "1934 Act Registration Statement") (including all pre-effective and post-effective amendments thereto) relating to the registration of the Preferred Securities of the Trust under the Securities Exchange Act of 1934, as amended; (ii) to file with the New York Stock Exchange or any other national stock exchange or The Nasdaq National Market (each, an "Exchange") and execute on behalf of the Trust one or more listing applications and all other applications, statements, certificates, agreements and other instruments as shall be necessary or desirable to cause the Preferred Securities to be listed on any of the Exchanges; (iii) to file and execute on behalf of the Trust such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as shall be necessary or desirable to register the Preferred Securities under the securities or blue sky laws or such jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or desirable and (iv) to execute on behalf of the Trust that certain Underwriting Agreement relating to the Preferred Securities, among the Trust, the Depositor and the several Underwriters named therein, substantially in the form included as an exhibit to the 1933 Act Registration Statement. In connection with the filings referred to above, the Depositor hereby constitutes and appoints Richard L. Hinkley and Richard C. Schmalz, Jr. and each of them, as its true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the Depositor or in the Depositor's name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to the 1933 Act Registration Statement and the 1934 Act Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Commission, the Exchange and administrators of state securities or blue sky laws, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as the Depositor might or could to in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their respective substitute or substitutes, shall do or cause to be done by virtue hereof. 5. This Trust Agreement may be executed in one or more counterparts. 6. The number of Trustees initially shall be one (1) and thereafer the number of Trustees shall be such number as shall be fixed from time to time by a written instrument signed by the Depositor which may increase or decrease the number of Trustees; provided, however, that to the extent required by the Business Trust Act, one Trustee shall either be a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware and otherwise meets the requirements of applicable Delaware law. Subject to the foregoing, the Depositor is entitled to appoint or remove without cause any Trustee at any time. The Trustees may resign upon thirty (30) days' prior notice to the Depositor. 7. This Trust Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware (without regard to conflict of laws of principles). [SIGNATURE PAGE FOLLOWS] 2 IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed as of the day and year first above written. NEVADA POWER COMPANY, as Depositor By: /s/ Cynthia K. Gillian ----------------------------- Name: Cynthia K. Gillian Title: Vice President, Retail Customer Operations DELAWARE TRUST CAPITAL MANAGEMENT, INC., as Trustee By: /s/ Richard N. Smith ----------------------------- Name: Richard N. Smith Title: Vice President 3 EX-4.10 6 EXHIBIT 4.10 EXHIBIT 4.10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- AMENDED AND RESTATED TRUST AGREEMENT among NEVADA POWER COMPANY, as Depositor, IBJ SCHRODER BANK & TRUST COMPANY, as Property Trustee, DELAWARE TRUST CAPITAL MANAGEMENT, INC., as Delaware Trustee, and THE ADMINISTRATIVE TRUSTEES NAMED HEREIN Dated as of March 1, 1997 NVP CAPITAL I - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TABLE OF CONTENTS ARTICLE I DEFINED TERMS SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .1 SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . .9 SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . 10 ARTICLE II ESTABLISHMENT OF THE TRUST SECTION 201. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 202. Office of the Delaware Trustee; Trust Principal Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 203. Initial Contribution of Trust Property; Organizational Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 204. Issuance of the Preferred Securities . . . . . . . . . . . . . 11 SECTION 205. Issuance of Common Securities; Subscription and Purchase of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 206. Declaration of Trust . . . . . . . . . . . . . . . . . . . . . 11 SECTION 207. Authorization to Enter into Certain Transactions . . . . . . . 12 SECTION 208. Assets of Trust. . . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 209. Title to Trust Property. . . . . . . . . . . . . . . . . . . . 15 ARTICLE III PAYMENT ACCOUNT SECTION 301. Payment Account. . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE IV DISTRIBUTIONS; REDEMPTION SECTION 401. Distributions. . . . . . . . . . . . . . . . . . . . . . . . . 16 SECTION 402. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 17 SECTION 403. Subordination of Common Securities . . . . . . . . . . . . . . 19 SECTION 404. Payment Procedures . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 405. Tax Returns and Reports. . . . . . . . . . . . . . . . . . . . 19 SECTION 406. Payment of Taxes, Duties, Etc. of the Trust. . . . . . . . . . 20 SECTION 407. Payments under Indenture . . . . . . . . . . . . . . . . . . . 20 -i- ARTICLE V TRUST SECURITIES CERTIFICATES SECTION 501. Initial Ownership. . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 502. The Trust Securities Certificates. . . . . . . . . . . . . . . 20 SECTION 503. Execution and Delivery of Trust Securities Certificates. . . . 20 SECTION 504. Registration of Transfer and Exchange of Preferred Securities Certificates. . . . . . . . . . . . . . . . . . . . 21 SECTION 505. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 21 SECTION 506. Persons Deemed Securityholders . . . . . . . . . . . . . . . . 22 SECTION 507. Access to List of Securityholders' Names and Addresses . . . . 22 SECTION 508. Maintenance of Office or Agency. . . . . . . . . . . . . . . . 22 SECTION 509. Appointment of Paying Agent. . . . . . . . . . . . . . . . . . 23 SECTION 510. Ownership of Common Securities by Depositor. . . . . . . . . . 23 SECTION 511. Book-Entry Preferred Securities Certificates; Common Securities Certificate. . . . . . . . . . . . . . . . . . . . 23 SECTION 512. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . 24 SECTION 513. Definitive Preferred Securities Certificates . . . . . . . . . 24 SECTION 514. Rights of Securityholders. . . . . . . . . . . . . . . . . . . 25 ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING SECTION 601. Limitations on Voting Rights . . . . . . . . . . . . . . . . . 26 SECTION 602. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . 27 SECTION 603. Meetings of Preferred Securityholders. . . . . . . . . . . . . 27 SECTION 604. Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . 27 SECTION 605. Proxies, etc.. . . . . . . . . . . . . . . . . . . . . . . . . 27 SECTION 606. Securityholder Action by Written Consent . . . . . . . . . . . 28 SECTION 607. Record Date for Voting and Other Purposes. . . . . . . . . . . 28 SECTION 608. Acts of Securityholders. . . . . . . . . . . . . . . . . . . . 28 SECTION 609. Inspection of Records. . . . . . . . . . . . . . . . . . . . . 29 ARTICLE VII REPRESENTATIONS AND WARRANTIES SECTION 701. Representations and Warranties of the Property Trustee and the Delaware Trustee . . . . . . . . . . . . . . . . . . . 29 SECTION 702. Representations and Warranties of Depositor. . . . . . . . . . 31 -ii- ARTICLE VIII THE TRUSTEES SECTION 801. Certain Duties and Responsibilities. . . . . . . . . . . . . . 31 SECTION 802. Certain Notices. . . . . . . . . . . . . . . . . . . . . . . . 33 SECTION 803. Certain Rights of Property Trustee . . . . . . . . . . . . . . 33 SECTION 804. Not Responsible for Recitals or Issuance of Securities . . . . 35 SECTION 805. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . 35 SECTION 806. Compensation; Indemnity; Fees. . . . . . . . . . . . . . . . . 35 SECTION 807. Corporate Property Trustee Required; Eligibility of Trustees . 36 SECTION 808. Conflicting Interests. . . . . . . . . . . . . . . . . . . . . 36 SECTION 809. Co-Trustees and Separate Trustee . . . . . . . . . . . . . . . 36 SECTION 810. Resignation and Removal; Appointment of Successor. . . . . . . 38 SECTION 811. Acceptance of Appointment by Successor . . . . . . . . . . . . 39 SECTION 812. Merger, Conversion, Consolidation or Succession to Business. . 40 SECTION 813. Preferential Collection of Claims Against Depositor or Trust . 40 SECTION 814. Reports by Property Trustee. . . . . . . . . . . . . . . . . . 40 SECTION 815. Reports to the Property Trustee. . . . . . . . . . . . . . . . 41 SECTION 816. Evidence of Compliance with Conditions Precedent . . . . . . . 41 SECTION 817. Number of Trustees . . . . . . . . . . . . . . . . . . . . . . 41 SECTION 818. Delegation of Power. . . . . . . . . . . . . . . . . . . . . . 42 ARTICLE IX TERMINATION, LIQUIDATION AND MERGER SECTION 901. Termination Upon Expiration Date . . . . . . . . . . . . . . . 42 SECTION 902. Early Termination. . . . . . . . . . . . . . . . . . . . . . . 42 SECTION 903. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 42 SECTION 904. Liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . 43 SECTION 905. Mergers, Consolidations, Amalgamations or Replacements of the Trust.. . . . . . . . . . . . . . . . . . . . . . . . . 44 ARTICLE X MISCELLANEOUS PROVISIONS SECTION 1001. Limitation of Rights of Securityholders. . . . . . . . . . . . 45 SECTION 1002. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 45 SECTION 1003. Separability . . . . . . . . . . . . . . . . . . . . . . . . . 46 SECTION 1004. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 46 SECTION 1005. Payments Due on Non-Business Day.. . . . . . . . . . . . . . . 46 SECTION 1006. Successors.. . . . . . . . . . . . . . . . . . . . . . . . . . 47 SECTION 1007. Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . . 47 SECTION 1008. Reports, Notices and Demands.. . . . . . . . . . . . . . . . . 47 -iii- SECTION 1009. Agreement Not to Petition. . . . . . . . . . . . . . . . . . . 47 SECTION 1010. Trust Indenture Act; Conflict with Trust Indenture Act . . . . 48 SECTION 1011. Acceptance of Terms of Trust Agreement, Guarantee and Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . 48 -iv- NVP Capital I Certain Sections of this Trust Agreement relating to Sections 310 through 318 of the Trust Indenture Act of 1939: Trust Indenture Trust Agreement Act Section Section (S) 310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . 807 (a)(2). . . . . . . . . . . . . . . . . . . . . . . . . 807 (a)(3). . . . . . . . . . . . . . . . . . . . . . . . . 809 (a)(4). . . . . . . . . . . . . . . . . . . . . . . . . 207(a)(ii) (b). . . . . . . . . . . . . . . . . . . . . . . . . . .808 (S) 311 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .813 (b). . . . . . . . . . . . . . . . . . . . . . . . . . .813 (S) 312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .507 (b). . . . . . . . . . . . . . . . . . . . . . . . . . .507 (c). . . . . . . . . . . . . . . . . . . . . . . . . . .507 (d). . . . . . . . . . . . . . . . . . . . . . . . . . .507 (S) 313 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .814(a) (b). . . . . . . . . . . . . . . . . . . . . . . . . . .814(b) (c). . . . . . . . . . . . . . . . . . . . . . . . . . .1008 (d). . . . . . . . . . . . . . . . . . . . . . . . . . .814(c) (S) 314 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .815 (b). . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (c)(1) . . . . . . . . . . . . . . . . . . . . . . . . .816 (c)(2) . . . . . . . . . . . . . . . . . . . . . . . . .816 (c)(3) . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (d). . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (e). . . . . . . . . . . . . . . . . . . . . . . . . . .101, 816 (S) 315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .801(a), 803(a) (b). . . . . . . . . . . . . . . . . . . . . . . . . . .802, 1008 (c). . . . . . . . . . . . . . . . . . . . . . . . . . .801(a) (d). . . . . . . . . . . . . . . . . . . . . . . . . . .801, 803 (e). . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (S) 316 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (a)(2) . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (b). . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (c). . . . . . . . . . . . . . . . . . . . . . . . . . .607 (S) 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (a)(2) . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable (b). . . . . . . . . . . . . . . . . . . . . . . . . . .509 (S) 318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . .1010 - ----------------- Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to be a part of the Trust Agreement. -v- AMENDED AND RESTATED TRUST AGREEMENT, dated as of March 1, 1997, among (i) Nevada Power Company, a Nevada corporation (including any successors or assigns, the "Depositor"), (ii) IBJ Schroder Bank & Trust Company, a banking corporation duly organized and existing under the laws of the State of New York, as property trustee (the "Property Trustee") and Delaware Trust Capital Management, Inc., a banking corporation duly organized and existing under the laws of the State of Delaware, as Delaware trustee (the "Delaware Trustee"), (iii) Richard L. Hinckley, an individual, and Richard C. Schmalz, Jr., an individual, each of whose address is c/o Nevada Power Company, 6226 West Sahara Avenue, Las Vegas, Nevada 89102 (each, an "Administrative Trustee" and, collectively, the "Administrative Trustees" and, collectively with the Property Trustee and Delaware Trustee, the "Trustees") and (iv) the several Securityholders, as hereinafter defined. W I T N E S S E T H: WHEREAS, the Depositor and the Delaware Trustee have heretofore duly declared and established a business trust pursuant to the Delaware Business Trust Act by the entering into of that certain Trust Agreement, dated as of January 31, 1997 (the "Original Trust Agreement"), and by the execution and filing by the Delaware Trustee with the Secretary of State of the State of Delaware of the Certificate of Trust, filed on January 31, 1997, attached as Exhibit A; and WHEREAS, the Depositor and the Delaware Trustee desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the Common Securities by the Trust to the Depositor, (ii) the issuance and sale of the Preferred Securities by the Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust from the Depositor of all of the right, title and interest in the Debentures and (iv) the appointment of the Administrative Trustees; NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Securityholders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows: ARTICLE I DEFINED TERMS SECTION 101. DEFINITIONS. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; -1- (b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Trust Agreement; and (d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision. "ACT", when used with respect to any Securityholder, has the meaning specified in Section 608. "ADDITIONAL AMOUNT" means, with respect to Trust Securities of a given Liquidation Amount and for a given period, the amount of Additional Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of Debentures for such period. "ADDITIONAL SUMS" has the meaning specified in Section 1006 of the Indenture. "ADMINISTRATIVE TRUSTEE" means each of Richard L. Hinckley and Richard C. Schmalz, Jr., each solely in such person's capacity as Administrative Trustee of the Trust formed and continued hereunder and not in such person's individual capacity, or such Administrative Trustee's successor in interest in such capacity, or any successor trustee appointed as herein provided. "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 the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "AUTHORIZED OFFICER" means, with respect to the Depositor, the Chairman of the Board and Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer or any other officer or agent of the Depositor duly authorized by the Board of Directors of the Depositor to act in respect of matters relating to this Trust Agreement. "BANKRUPTCY EVENT" means, with respect to any Person: (a) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or of any substantial part of its property or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or -2- (b) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or similar official) of such Person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt, or the taking of corporate action by such Person in furtherance of any such action. "BANKRUPTCY LAWS" has the meaning specified in Section 1009. "BOARD RESOLUTION" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Depositor to have been duly adopted by the Depositor's Board of Directors, or such committee of the Board of Directors or officers of the Depositor to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification, and delivered to the Trustees. "BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES" means a beneficial interest in the Preferred Securities Certificates, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 511. "BUSINESS DAY" means a day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed, or (c) a day on which the Property Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture Trustee is closed for business. "CERTIFICATE DEPOSITORY AGREEMENT" means the agreement among the Trust, the Depositor and The Depository Trust Company, as the initial Clearing Agency, dated as of the Closing Date, relating to the Trust Securities Certificates, substantially in the form attached as Exhibit B, as the same may be amended and supplemented from time to time. "CLEARING AGENCY" means an organization registered as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The Depository Trust Company will be the initial Clearing Agency. "CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "CLOSING DATE" means ____________, 1997. "CODE" means the Internal Revenue Code of 1986, as amended. "COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after -3- the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "COMMON SECURITY" means an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $25 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein. "COMMON SECURITIES CERTIFICATE" means a certificate evidencing ownership of Common Securities, substantially in the form attached as Exhibit C. "CORPORATE TRUST OFFICE" means the principal corporate trust office of the Property Trustee located in New York, New York which at the time of the execution of this Trust Agreement is located at One State Street, New York, New York 10004 Attention: Corporate Trust Department. "DEBENTURE EVENT OF DEFAULT" means an "Event of Default" as defined in the Indenture. "DEBENTURE REDEMPTION DATE" means, with respect to any Debentures to be redeemed under the Indenture, the date fixed for redemption under the Indenture. "DEBENTURE TAX EVENT" means a "Tax Event" as defined in the Indenture. "DEBENTURE TRUSTEE" means IBJ Schroder Bank & Trust Company, a banking corporation organized under the laws of the State of New York, as trustee under the Indenture and any duly appointed successor thereto. "DEBENTURES" means the $128,750,000.00 aggregate principal amount of the Depositor's ____% Junior Subordinated Deferrable Interest Debentures, Series A, issued pursuant to the Indenture. "DEFINITIVE PREFERRED SECURITIES CERTIFICATES" means either or both (as the context requires) of (a) Preferred Securities Certificates issued as Book-Entry Preferred Securities Certificates as provided in Section 511(a) and (b) Preferred Securities Certificates issued in certificated, fully registered form as provided in Section 513. "DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801, ET SEQ., as it may be amended from time to time. "DELAWARE TRUSTEE" means the commercial bank or trust company identified as the "Delaware Trustee" in the preamble to this Trust Agreement solely in its capacity as Delaware Trustee of the Trust formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed as herein provided. "DEPOSITOR" has the meaning specified in the preamble to this Agreement. "DISTRIBUTION DATE" has the meaning specified in Section 401(a). -4- "DISTRIBUTIONS" means amounts payable in respect of the Trust Securities as provided in Section 401. "EVENT OF DEFAULT" means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) the occurrence of a Debenture Event of Default; or (b) default by the Property Trustee in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or (c) default by the Property Trustee in the payment of any Redemption Price of any Trust Security when it becomes due and payable; or (d) default in the performance, or breach, in any material respect, of any covenant or warranty of the Trustees in this Trust Agreement (other than a covenant or warranty a default in the performance of which or the breach of which is dealt with in clause (b) or (c) above) and continuation of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the defaulting Trustee or Trustees by the Securityholders of at least 25% in aggregate liquidation preference of the Outstanding Preferred Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (e) the occurrence of a Bankruptcy Event with respect to the Trust or the Property Trustee, and in the case of the Property Trustee, the failure of the Common Securityholder to appoint a successor Property Trustee within 60 days thereof. "EXPENSE AGREEMENT" means the Agreement as to Expenses and Liabilities between the Depositor and the Trust, substantially in the form attached as Exhibit D, as amended from time to time. "EXPIRATION DATE" has the meaning specified in Section 901. "GUARANTEE" means the Guarantee Agreement executed and delivered by the Depositor and IBJ Schroder Bank & Trust Company, as guarantee trustee, contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the Securityholders of the Preferred Securities, as amended from time to time. "INDENTURE" means the Junior Subordinated Indenture, dated as of, March 1, 1997, as supplemented by a Supplemental Indenture No. 1, dated as of March 1, 1997, between the Depositor and the Debenture Trustee, as trustee, as amended or supplemented from time to time. "INVESTMENT COMPANY EVENT" means the receipt by the Trust of an Opinion of Counsel, rendered by a law firm having a recognized national tax and securities practice, to the effect that, as -5- a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be considered an "investment company" that is required to be registered under the 1940 Act, which Change in 1940 Act Law becomes effective on or after the date of original issuance of the Preferred Securities under this Trust Agreement. "LIEN" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "LIKE AMOUNT" means (a) with respect to a redemption of Trust Securities, Trust Securities having a Liquidation Amount equal to the principal amount of Debentures to be contemporaneously redeemed in accordance with the Indenture the proceeds of which will be used to pay the Redemption Price of such Trust Securities and (b) with respect to a distribution of Debentures to Securityholders of Trust Securities in connection with a dissolution or liquidation of the Trust, Debentures having a principal amount equal to the Liquidation Amount of the Trust Securities of the Securityholder to whom such Debentures are distributed. "LIQUIDATION AMOUNT" means the stated amount of $25 per Trust Security. "LIQUIDATION DATE" means the date on which Debentures are to be distributed to Securityholders of Trust Securities pursuant to Section 904(a) in connection with a termination and liquidation of the Trust. "LIQUIDATION DISTRIBUTION" has the meaning specified in Section 904(d). "1940 ACT" means the Investment Company Act of 1940, as amended. "OFFICERS' CERTIFICATE" means a certificate signed by any two Authorized Officers. One of the officers signing any Officers' Certificate given pursuant to Section 816 shall be the principal executive, financial or accounting officer of the Depositor. "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel for the Trust, the Property Trustee or the Depositor, and who shall be reasonably acceptable to the Property Trustee. "ORIGINAL TRUST AGREEMENT" has the meaning specified in the recitals to this Trust Agreement. "OUTSTANDING", when used with respect to Preferred Securities, means, as of the date of determination, all Preferred Securities theretofore executed and delivered under this Trust Agreement, except: (a) Preferred Securities theretofore cancelled by the Property Trustee or delivered to the Property Trustee for cancellation; (b) Preferred Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Securityholders of such Preferred Securities; PROVIDED that, if such Preferred Securities are -6- to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and (c) Preferred Securities which have been paid or in exchange for or in lieu of which other Preferred Securities have been executed and delivered pursuant to Section 504, 505, 511 or 513; provided, however, that in determining whether the Securityholders of the requisite Liquidation Amount of the Outstanding Preferred Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Securities that such Trustee knows to be so owned shall be so disregarded and (b) the foregoing shall not apply at any time when all of the outstanding Preferred Securities are owned by the Depositor, one or more of the Trustees and/or any such Affiliate. Preferred Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee's right so to act with respect to such Preferred Securities and that the pledgee is not the Depositor or any Affiliate of the Depositor. "OWNER" means each Person who is the beneficial owner of a Book-Entry Preferred Securities Certificate as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency (directly or indirectly, in accordance with the rules of such Clearing Agency). "PAYING AGENT" means any paying agent or co-paying agent appointed pursuant to Section 509 and shall initially be the Property Trustee. "PAYMENT ACCOUNT" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee with the Property Trustee in its corporate Trust department for the benefit of the Securityholders in which all amounts paid in respect of the Debentures will be held and from which the Property Trustee shall make payments to the Securityholders in accordance with Sections 401 and 402. "PERSON" means any individual, corporation, estate, partnership, joint venture, association, trust, joint stock company, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof or any other entity of whatever nature. "PREFERRED SECURITY" means an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $25 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein. "PREFERRED SECURITIES CERTIFICATE" means a certificate evidencing ownership of Preferred Securities, substantially in the form attached as Exhibit E. -7- "PROPERTY TRUSTEE" means the commercial bank or trust company identified as the "Property Trustee" in the preamble to this Trust Agreement solely in its capacity as Property Trustee of the Trust heretofore formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor property trustee appointed as herein provided. "REDEMPTION DATE" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each Debenture Redemption Date and the stated maturity of the Debentures shall be a Redemption Date for a Like Amount of Trust Securities. "REDEMPTION PRICE" means, with respect to any Trust Security, the Liquidation Amount of such Trust Security, plus accumulated and unpaid Distributions to the Redemption Date, plus the related amount of the premium, if any, paid by the Depositor upon the concurrent redemption of a Like Amount of Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among the Trust Securities. "RELEVANT TRUSTEE" shall have the meaning specified in Section 810. "RESPONSIBLE OFFICER" means, when used with respect to the Property Trustee, any officer assigned to the Corporate Trust Office, including any vice president, assistant vice president, assistant treasurer, assistant secretary or any other officer of the Property Trustee customarily performing functions similar to those performed by any of the above designated officers and having direct responsibility for the administration for this Declaration of Trust, and also, with respect to a particular matter, any other officer, to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "SECURITIES REGISTER" and "Securities Registrar" have the respective meanings specified in Section 504. "SECURITYHOLDER" means a Person in whose name a Trust Security or Securities is registered in the Securities Register; any such Person shall be deemed to be a beneficial owner within the meaning of the Delaware Business Trust Act. "SPECIAL EVENT" means a Tax Event or an Investment Company Event. "TAX EVENT" means the receipt by the Trust of an Opinion of Counsel, rendered by a law firm having a national tax and securities practice, to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of issuance of the Preferred Securities under this Trust Agreement, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days after the date of such Opinion of Counsel, subject to United States federal income tax with respect to income received or accrued on the Debentures, (ii) interest payable by the Depositor on the Debentures is not, or within 90 days after the date of such Opinion of Counsel, will not be, deductible by the Depositor, in whole or in part, for United States federal income tax purposes or (iii) the Trust is, or will be within 90 days after the date of such Opinion of Counsel, subject to more than a de minimis amount of other taxes, duties, assessments or other governmental charges. "TRUST" means the Delaware business trust created and continued hereby and identified on the cover page to this Trust Agreement. -8- "TRUST AGREEMENT" means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including all exhibits hereto, including, for all purposes of this Trust Agreement and any such modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Trust Agreement and any such modification, amendment or supplement, respectively. "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "TRUST PROPERTY" means (a) the Debentures, (b) the rights of the Property Trustee under the Guarantee, (c) any cash on deposit in, or owing to, the Payment Account and (d) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to the trusts of this Trust Agreement. "TRUST SECURITY" means any one of the Common Securities or the Preferred Securities. "TRUST SECURITIES CERTIFICATE" means any one of the Common Securities Certificates or the Preferred Securities Certificates. "TRUSTEES" means, collectively, the Property Trustee, the Delaware Trustee and the Administrative Trustees. "UNDERWRITING AGREEMENT" means the Terms Agreement, dated as of _______________, 1997, among the Trust, the Depositor and the Underwriters named therein, incorporating the Underwriting Agreement Basic Provisions of the Trust. SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. (a) Except as otherwise expressly provided in this Trust Agreement, upon any application or request by the Depositor to any Trustee to take any action under any provision of this Trust Agreement, the Depositor shall, if requested by such Trustee, furnish to such Trustee an Officers' Certificate stating that all conditions precedent (including any covenant compliance with which constitutes a condition precedent), if any, provided for in this Trust Agreement relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent (including any covenant compliance with which constitutes a condition precedent), if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Trust Agreement relating to such particular application or request, no additional certificate or opinion need be furnished. (b) Every certificate or opinion (including any Officers' Certificate or Opinion of Counsel) with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include: (i) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; -9- (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. (a) In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. (b) Any certificate (including any Officers' Certificate) or opinion of an officer of the Depositor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such Officers' Certificate or opinion is based are erroneous. Any such Officers' Certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Depositor stating that the information with respect to such factual matters is in the possession of the Depositor, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. (c) Where any Person is required to make, give or execute two more applications, requests, consents, certificates, statements, opinions or other instruments under this Trust Agreement, they may, but need not, be consolidated and form one instrument. (d) Whenever, subsequent to the receipt by any Trustee of any Board Resolution, Officers' Certificate, Opinion of Counsel or other document or instrument, a clerical, typographical or other inadvertent or unintentional error or omission shall be discovered therein, a new document or instrument may be substituted therefor in corrected form with the same force and effect as if originally filed in the corrected form and, irrespective of the date or dates of the actual execution and/or delivery thereof, such substitute document or instrument shall be deemed to have been executed and/or delivered as of the date or dates required with respect to the document or instrument for which it is substituted. Anything in this Trust Agreement to the contrary notwithstanding, if any such corrective document or instrument indicates that action has been taken by or at the request of the Depositor which could not have been taken had the original document or instrument not contained such error or omission, the action so taken shall not be invalidated or otherwise rendered ineffective but shall be and remain in full force and effect, except to the extent that such action was a result of willful misconduct or bad faith. -10- ARTICLE II ESTABLISHMENT OF THE TRUST SECTION 201. NAME. The Trust created and continued hereby shall be known as "NVP Capital I," as such name may be modified from time to time by the Administrative Trustees following written notice to the Securityholders of Trust Securities and the other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. SECTION 202. OFFICE OF THE DELAWARE TRUSTEE; TRUST PRINCIPAL PLACE OF BUSINESS. The address of the Delaware Trustee in the State of Delaware is c/o Delaware Trust Capital Management, Inc., 900 Market Street, Second Floor, Wilmington, Delaware, 18901, Attention: Corporate Trust Department, or such other address in the State of Delaware as the Delaware Trustee may designate by written notice to the Securityholders and the Depositor. The principal executive office of the Trust is c/o Nevada Power Company, 6226 West Sahara Avenue, Las Vegas, Nevada 89102. SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES. The Property Trustee acknowledges receipt in trust from the Depositor in connection with the Original Trust Agreement of the sum of $10, which constituted the initial Trust Property. The Depositor shall pay organizational expenses of the Trust as they arise or shall, upon request of any Trustee, promptly reimburse such Trustee for any such expenses paid by such Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such expenses. SECTION 204. ISSUANCE OF THE PREFERRED SECURITIES. On the Closing Date, an Administrative Trustee, on behalf of the Trust, shall execute in accordance with Section 502 and deliver to the Underwriters named in the Underwriting Agreement, Preferred Securities Certificates, registered in the name of the nominee of the initial Clearing Agency, in an aggregate amount of 5,000,000 Preferred Securities having an aggregate Liquidation Amount of $125,000,000, against receipt of the aggregate purchase price of such Preferred Securities of $125,000,000, which amount such Administrative Trustee shall promptly deliver to the Property Trustee. SECTION 205. ISSUANCE OF COMMON SECURITIES; SUBSCRIPTION AND PURCHASE OF DEBENTURES. On the Closing Date, an Administrative Trustee, on behalf of the Trust, shall execute in accordance with Section 502 and deliver to the Depositor, Common Securities Certificates, registered in the name of the Depositor, in an aggregate amount of 150,000 Common Securities having an aggregate Liquidation Amount of $3,750,000 against payment by the Depositor of such amount. Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase from the Depositor Debentures, registered in the name of the Trust and having an aggregate principal amount equal to $128,750,000, and, in satisfaction of the purchase price for such Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of $128,750,000. SECTION 206. DECLARATION OF TRUST. The exclusive purposes and functions of the Trust are (a) to issue and sell Trust Securities and use the proceeds from such sale to acquire the Debentures, (b) to receive payments to be made by the Depositor on the Debentures and to disburse -11- such payments in accordance with the terms hereof, and (c) to engage in those activities necessary, convenient or incidental thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to have all the rights, powers and duties to the extent set forth herein, and the Trustees hereby accept such appointment. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the benefit of the Securityholders. The Administrative Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the purposes of the Trust. The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Property Trustee or the Administrative Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Delaware Business Trust Act. SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS. (a) The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (b) of this Section, and in accordance with the following provisions (i) and (ii), the Administrative Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including without limitation, the following: (i) As among the Trustees, each Administrative Trustee shall have the power, duty and authority to act on behalf of the Trust with respect to the following matters: (A) the issuance and sale of the Trust Securities; (B) to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, the Expense Agreement, the Underwriting Agreement and the Certificate Depository Agreement and such other agreements, certificates and documents as may be necessary or desirable in connection with the purposes and functions of the Trust; (C) qualifying the Trust to do business in any jurisdiction as may be necessary or desirable; (D) assisting in the registration of the Preferred Securities under the Securities Act of 1933, as amended, and under state securities or blue sky laws, and the qualification of this Trust Agreement as a trust indenture under the Trust Indenture Act; (E) assisting in the listing of the Preferred Securities upon such national securities exchange, the Nasdaq National Market or such other interdealer quotation system or self-regulatory organization as shall be determined by the Depositor and the registration of the Preferred Securities under the Securities Exchange Act of 1934, as amended, and the preparation and filing of all notices and periodic and other reports and other documents pursuant to the foregoing; (F) the sending of notices (other than notices of default) and other information regarding the Trust Securities and the Debentures to the Securityholders in accordance with this Trust Agreement; -12- (G) the appointment of a Paying Agent, authenticating agent and Securities Registrar in accordance with this Trust Agreement; (H) registering transfer of the Trust Securities in accordance with this Trust Agreement; (I) to the extent provided in this Trust Agreement, the winding-up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware; (J) unless otherwise determined by the Depositor, the Property Trustee or the Administrative Trustees, or as otherwise required by the Delaware Business Trust Act or the Trust Indenture Act, to execute on behalf of the Trust (either acting alone or together with any or all of the Administrative Trustees) any documents that the Administrative Trustees have the power to execute pursuant to this Trust Agreement; (K) the performance of its obligations under this Trust Agreement; and (L) the taking of any action incidental to the foregoing as the Trustees may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement and to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). (ii) As among the Trustees, the Property Trustee shall have the power, duty and authority to act on behalf of the Trust with respect to the following matters: (A) the establishment and maintenance of the Payment Account; (B) the receipt of the Debentures; (C) the collection and deposit of interest, principal and any other payments made in respect of the Debentures in the Payment Account; (D) the distribution of amounts owed to the Securityholders in respect of the Trust Securities; (E) the exercise of all of the rights, powers and privileges of a holder of the Debentures; (F) the sending of notices of default and other information regarding the Trust Securities and the Debentures to the Securityholders in accordance with this Trust Agreement; (G) the distribution of the Trust Property in accordance with the terms of this Trust Agreement; -13- (H) to the extent provided in this Trust Agreement, the winding-up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware; (I) after an Event of Default the taking of any action incidental to the foregoing as the Property Trustee may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement and protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder); (J) to act as Paying Agent and/or Securities Registrar to the extent appointed as such hereunder; (K) the performance of its obligations under this Trust Agreement; and (L) except as otherwise provided in this Section 207(a)(ii), the Property Trustee shall have none of the duties, powers or the authority of the Administrative Trustees set forth in this Section 207(a)(i). (b) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, the Trustees shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Securityholders, except as expressly provided herein, (iii) take any action that would cause the Trust to fail or cease to qualify as a "grantor trust" for United States federal income tax purposes, (iv) incur any indebtedness for borrowed money or issue any other debt or (v) take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The Administrative Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as Securityholders. (c) In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects): (i) the preparation and filing by the Trust with the Commission and the execution on behalf of the Trust of a registration statement on the appropriate form in relation to the Preferred Securities and the Debentures, including any amendments thereto; (ii) the determination of the states or jurisdictions in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and the determination of any and all such acts, other than actions which must be taken by or on behalf of the Trust, and the advice to the Trustees of actions they must take on behalf of the Trust, and the preparation for execution and filing of any documents to be executed and filed by the Trust or on behalf -14- of the Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such states or jurisdictions; (iii) the preparation for filing by the Trust and execution on behalf of the Trust of an application to the New York Stock Exchange or any other national stock exchange or the Nasdaq National Market for listing upon notice of issuance of any Preferred Securities and the filing thereafter of such notifications and documents as may be necessary from time to time to maintain such listing; (iv) the preparation for filing by the Trust with the Commission and the execution on behalf of the Trust of a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, including any amendments thereto; (v) the selection of the investment banker or bankers to act as underwriters with respect to the offer and sale by the Trust of the Preferred Securities and the negotiation of the terms of, and the execution and delivery of, the Underwriting Agreement providing for the sale of the Preferred Securities; and (vi) the taking of any other actions necessary or desirable to carry out any of the foregoing activities. (d) Notwithstanding anything herein to the contrary, the Administrative Trustees are authorized and directed to conduct the affairs of the Trust and to operate the Trust so that the Trust will not be deemed to be an "investment company" required to be registered under the 1940 Act, or taxed as a corporation for United States federal income tax purposes and so that the Debentures will be treated as indebtedness of the Depositor for United States federal income tax purposes. In this connection, the Depositor and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that each of the Depositor and the Administrative Trustees determines in their discretion to be necessary or desirable for such purposes, as long as such action does not adversely affect in any material respect the interests of the Securityholders of the Preferred Securities. SECTION 208. ASSETS OF TRUST. The assets of the Trust shall consist of the Trust Property. SECTION 209. TITLE TO TRUST PROPERTY. Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Securityholders in accordance with this Trust Agreement. -15- ARTICLE III PAYMENT ACCOUNT SECTION 301. PAYMENT ACCOUNT. (a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and any agent of the Property Trustee shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Securityholders and for distribution as herein provided, including (and subject to) any priority of payments provided for herein. (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal of or interest on, and any other payments or proceeds with respect to, the Debentures. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof. ARTICLE IV DISTRIBUTIONS; REDEMPTION SECTION 401. DISTRIBUTIONS (a) Distributions on the Trust Securities shall be cumulative, and will accumulate whether or not there are funds of the Trust available for the payment of Distributions. Distributions shall accrue from _____________, 1997, and, except in the event that the Depositor exercises its right to defer the payment of interest on the Debentures pursuant to the Indenture, shall be payable quarterly in arrears on the last day of March, June, September and December of each year, commencing on ____________, 1997. If any date on which a Distribution is otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such Distribution shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date (each date on which distributions are payable in accordance with this Section 401(a) a "Distribution Date"). (b) The Trust Securities represent undivided beneficial interests in the Trust Property, and, the Distributions on the Trust Securities shall be payable at a rate of ____% per annum of the Liquidation Amount of the Trust Securities. The amount of Distributions payable for any full period shall be computed on the basis of a 360-day year of twelve 30-day months. For periods less than a full month, interest payable shall reflect interest on Trust Securities computed on the basis of the actual number of elapsed days based on a 360-day year. -16- The amount of Distributions payable for any period shall include the Additional Amounts, if any. (c) Distributions on the Trust Securities shall be made by the Property Trustee from the Payment Account and shall be payable on each Distribution Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Distributions. (d) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Securityholders thereof as they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be one Business Day prior to such Distribution Date; PROVIDED, HOWEVER, that in the event that the Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to the relevant Distribution Date. SECTION 402. REDEMPTION. (a) On each Debenture Redemption Date and on the stated maturity of the Debentures, the Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price. (b) Notice of redemption shall be given by the Depositor or by the Property Trustee at the Depositor's direction and expense by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date to each Securityholder of Trust Securities to be redeemed, at such Securityholder's address appearing in the Security Register. All notices of redemption shall state: (i) the Redemption Date; (ii) the Redemption Price; (iii) the CUSIP number; (iv) if less than all the Outstanding Trust Securities are to be redeemed, the identification and the total Liquidation Amount of the particular Trust Securities to be redeemed; and (v) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust Security to be redeemed and that distributions thereon will cease to accrue on and after said date. (c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of Debentures. Redemptions of the Trust Securities shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Redemption Price. (d) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then, by 2:00 p.m., New York City time, on the Redemption Date, subject to Section -17- 402(c), the Property Trustee will, so long as the Preferred Securities are in book-entry-only form, deposit irrevocably with the Clearing Agency for the Preferred Securities funds sufficient to pay the applicable Redemption Price and will give such Clearing Agency irrevocable instructions and authority to pay the Redemption Price to the beneficial owners of the Preferred securities in book-entry-only form. If the Preferred Securities are no longer in book-entry-only form, the Property Trustee, subject to Section 402(c), will irrevocably deposit with the Paying Agent funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions and authority to pay the Redemption Price to the Securityholders thereof upon surrender of their Preferred Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Securityholders of such Trust Securities as they appear on the Securities Register for the Trust Securities on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of Securityholders holding Trust Securities so called for redemption will cease, except the right of such Securityholders to receive the Redemption Price and any Distribution payable on or prior to the Redemption Date, but without interest, and such Securities will cease to be Outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of any Trust Securities called for redemption is improperly withheld or refused and not paid either by the Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust Securities will continue to accrue, at the then applicable rate, from the Redemption Date originally established by the Trust for such Trust Securities to the date such Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price. (e) Payment of the Redemption Price on the Trust Securities shall be made to the record Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be one Business Day prior to the relevant Redemption Date; PROVIDED, HOWEVER, that in the event that the Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the date fifteen days prior to the relevant Redemption Date. (f) Subject to Section 403(a), if less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated on a pro rata basis (based on Liquidation Amounts) among the Common Securities and the Preferred Securities. The particular Preferred Securities to be redeemed shall be selected on a pro rata basis (based upon Liquidation Amounts) not more than 60 days nor less than 30 days prior to the Redemption Date by the Property Trustee from the Outstanding Preferred Securities not previously called for redemption, by such method (including, without limitation, by lot) as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $25 or an integral multiple of $25 in excess thereof) of the Liquidation Amount of Preferred Securities of a denomination larger than $25. The Property Trustee shall promptly notify the Security Registrar in writing of the Preferred Securities selected for redemption and, in the case of any -18- Preferred Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Securities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the Liquidation Amount of Preferred Securities that has been or is to be redeemed. SECTION 403. SUBORDINATION OF COMMON SECURITIES. (a) Payment of Distributions (including Additional Amounts, if applicable) on, and the Redemption Price of, the Trust Securities, as applicable, shall be made, subject to Section 402(f), pro rata among the Common Securities and the Preferred Securities based on the Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Date or Redemption Date any Event of Default resulting from a Debenture Event of Default shall have occurred and be continuing, no payment of any Distribution (including Additional Amounts, if applicable) on, or Redemption Price of, any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions (including Additional Amounts, if applicable) on all Outstanding Preferred Securities for all Distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Preferred Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including Additional Amounts, if applicable) on, or the Redemption Price of, Preferred Securities then due and payable. (b) In the case of the occurrence of any Event of Default resulting from a Debenture Event of Default, the Securityholder of Common Securities will be deemed to have waived any right to act with respect to any such Event of Default under this Trust Agreement until the effect of all such Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until any such Event of Default under this Trust Agreement with respect to the Preferred Securities has been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the Securityholders of the Preferred Securities and not the Securityholder of the Common Securities, and only the Securityholders of the Preferred Securities will have the right to direct the Property Trustee to act on their behalf. SECTION 404. PAYMENT PROCEDURES. Payments of Distributions (including Additional Amounts, if applicable) in respect of the Preferred Securities shall be made by check mailed to the address of the Securityholder entitled thereto as such address shall appear on the Securities Register or, if the Preferred Securities are held by a Clearing Agency, such Distributions shall be made to the Clearing Agency in immediately available funds, which shall credit the relevant Persons' accounts at such Clearing Agency on the applicable Distribution Dates pursuant to the Clearing Agency rules and procedures for such distributions. Payments in respect of the Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Common Securityholder. SECTION 405. TAX RETURNS AND REPORTS. The Administrative Trustees shall prepare (or cause to be prepared), at the Depositor's expense, and file all United States federal, state and local tax and information returns and reports required to be filed by or in respect of the Trust. In this -19- regard, the Administrative Trustees shall (a) prepare and file (or cause to be prepared and filed) the appropriate Internal Revenue Service Form required to be filed in respect of the Trust in each taxable year of the Trust and (b) prepare and furnish (or cause to be prepared and furnished) to each Securityholder the appropriate Internal Revenue Service form required to be furnished to such Securityholder or the information required to be provided on such form. The Administrative Trustees shall provide the Depositor and the Property Trustee with a copy of all such returns and reports promptly after such filing or furnishing. The Trustees shall comply with United States federal withholding and backup withholding tax laws and information reporting requirements with respect to any payments to Securityholders under the Trust Securities. SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST. Upon receipt under the Debentures of Additional Sums, the Property Trustee shall promptly pay any taxes, duties or governmental charges of whatsoever nature (other than withholding taxes) imposed on the Trust by the United States or any other taxing authority. SECTION 407. PAYMENTS UNDER INDENTURE. Any amount payable hereunder to any Securityholder of Preferred Securities shall be reduced by the amount of any corresponding payment such Securityholder has directly received pursuant to Section 508 of the Indenture. ARTICLE V TRUST SECURITIES CERTIFICATES SECTION 501. INITIAL OWNERSHIP. Upon the formation of the Trust and the contribution by the Depositor pursuant to Section 203 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the Trust. SECTION 502. THE TRUST SECURITIES CERTIFICATES. The Preferred Securities Certificates shall be issued in minimum denominations of $25 Liquidation Amount and integral multiples of $25 in excess thereof, and the Common Securities Certificates shall be issued in denominations of $25 Liquidation Amount and integral multiples thereof. The Trust Securities Certificates shall be executed on behalf of the Trust by manual signature of at least one Administrative Trustee. Trust Securities Certificates bearing the manual signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate in such transferee's name pursuant to Sections 504, 511 and 513. SECTION 503. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES. On the Closing Date, the Administrative Trustees shall cause Trust Securities Certificates, in an aggregate -20- Liquidation Amount as provided in Sections 204 and 205, to be executed on behalf of the Trust and delivered to or upon the written order of the Depositor, signed by its chairman of the board or chief executive officer, its president, any vice president, treasurer or assistant treasurer or controller without further corporate action by the Depositor, in authorized denominations. SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES CERTIFICATES. The Depositor shall keep or cause to be kept, at the office or agency maintained pursuant to Section 508, a register or registers for the purpose of registering Trust Securities Certificates and transfers and exchanges of Preferred Securities Certificates (the "Securities Register") in which the registrar designated by the Depositor (the "Securities Registrar"), subject to such reasonable regulations as it may prescribe, shall provide for the registration of Preferred Securities Certificates and Common Securities Certificates (subject to Section 510 in the case of the Common Securities Certificates) and registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Property Trustee shall be the initial Securities Registrar. Upon surrender for registration of transfer of any Preferred Securities Certificate at the office or agency maintained pursuant to Section 508, the Administrative Trustees or any one of them shall execute and deliver, in the name of the designated transferee or transferees, one or more new Preferred Securities Certificates in authorized denominations of a like aggregate Liquidation Amount dated the date of execution by such Administrative Trustee or Trustees. The Securities Registrar shall not be required to register the transfer of any Preferred Securities that have been called for redemption. At the option of a Securityholder, Preferred Securities Certificates may be exchanged for other Preferred Securities Certificates in authorized denominations of the same class and of a like aggregate Liquidation Amount upon surrender of the Preferred Securities Certificates to be exchanged at the office or agency maintained pursuant to Section 508. Every Preferred Securities Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Property Trustee and the Securities Registrar duly executed by the Securityholder or his attorney duly authorized in writing. Each Preferred Securities Certificate surrendered for registration of transfer or exchange shall be cancelled and subsequently disposed of by the Property Trustee in accordance with its customary practice. No service charge shall be made for any registration of transfer or exchange of Preferred Securities Certificates, but the Securities Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Securities Certificates. SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES. If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities Registrar, or if the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to the Securities Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrative Trustees, or any one of them, on behalf of the Trust shall -21- execute and make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrative Trustees or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an undivided beneficial interest in the assets of the Trust, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time. SECTION 506. PERSONS DEEMED SECURITYHOLDERS. The Administrative Trustees or the Securities Registrar shall treat the Person in whose name any Trust Securities Certificate shall be registered in the Securities Register as the owner of such Trust Securities Certificate for the purpose of receiving distributions and for all other purposes whatsoever, and neither the Trustees nor the Securities Registrar shall be bound by any notice to the contrary. SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES. The Administrative Trustees or the Depositor shall furnish or cause to be furnished (a) to the Property Trustee, semi-annually on or before January 15 and July 15 in each year, a list, in such form as the Property Trustee may reasonably require, of the names and addresses of the Securityholders as of the most recent record date and (b) to the Property Trustee, promptly after receipt by any Administrative Trustee or the Depositor of a request therefor from the Property Trustee in order to enable the Property Trustee to discharge its obligations under this Trust Agreement, in each case to the extent such information is in the possession or control of the Administrative Trustees or the Depositor and is not identical to a previously supplied list or has not otherwise been received by the Property Trustee in its capacity as Securities Registrar. The rights of Securityholders to communicate with other Securityholders with respect to their rights under this Trust Agreement or under the Trust Securities, and the corresponding rights of the Property Trustee shall be as provided in the Trust Indenture Act. Each Securityholder, by receiving and holding a Trust Securities Certificate, and each Owner shall be deemed to have agreed not to hold the Depositor, the Property Trustee or the Administrative Trustees accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. SECTION 508. MAINTENANCE OF OFFICE OR AGENCY. The Administrative Trustees shall maintain an office or offices or agency or agencies where Preferred Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Trustees in respect of the Trust Securities Certificates may be served. The Administrative Trustees initially designate Nevada Power Company, 6226 West Sahara Avenue, Las Vegas, Nevada 89102, Attention: Treasurer, as the office for such purposes. The Administrative Trustees shall give prompt written notice to the Depositor, the Property Trustee and to the Securityholders of any change in the location of the Securities Register or any such office or agency. -22- SECTION 509. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make distributions to Securityholders from the Payment Account and shall report the amounts of such distributions to the Property Trustee and the Administrative Trustees. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the distributions referred to above. The Administrative Trustees may revoke such power and remove the Paying Agent if such Trustees determine in their sole discretion that the Paying Agent shall have failed to perform its obligations under this Trust Agreement in any material respect. The Paying Agent shall initially be the Property Trustee, and any co-paying agent chosen by the Property Trustee and acceptable to the Administrative Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees, the Property Trustee and the Depositor. In the event that the Property Trustee shall no longer be the Paying Agent or a successor Paying Agent shall resign or its authority to act be revoked, the Administrative Trustees shall appoint a successor that is acceptable to the Property Trustee and the Depositor to act as Paying Agent (which shall be a bank or trust company). The Administrative Trustees shall cause such successor Paying Agent or any additional Paying Agent appointed by the Administrative Trustees to execute and deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 801, 803 and 806 shall apply to the Property Trustee also in its role as Paying Agent, for so long as the Property Trustee shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. On the Closing Date, the Depositor shall acquire and retain beneficial and record ownership of the Common Securities. To the fullest extent permitted by law, other than a transfer in connection with a consolidation or merger of the Depositor into another corporation, or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an entirety to any Person, pursuant to Section 801 of the Indenture, any attempted transfer of the Common Securities shall be void. The Administrative Trustees shall cause each Common Securities Certificate issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE". SECTION 511. BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON SECURITIES CERTIFICATE. (a) The Preferred Securities Certificates, upon original issuance, will be issued in the form of a typewritten Preferred Securities Certificate or Certificates representing Book-Entry Preferred Securities Certificates, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such Preferred Securities Certificate or Certificates shall initially be registered on the Securities Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Owner will receive a Definitive Preferred Securities Certificate representing such Owner's interest in such Preferred Securities, except as -23- provided in Section 513. Unless and until Definitive Preferred Securities Certificates have been issued to Owners pursuant to Section 513: (i) the provisions of this Section 511(a) shall be in full force and effect; (ii) the Securities Registrar and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Trust Agreement relating to the Book-Entry Preferred Securities Certificates (including the payment of the Liquidation Amount of and Distributions on the Book-Entry Preferred Securities Certificates and the giving of instructions or directions to Owners of Book-Entry Preferred Securities Certificates) as the sole Securityholder of Book-Entry Preferred Securities and shall have no obligations to the Owners thereof; (iii) to the extent that the provisions of this Section 511 conflict with any other provisions of this Trust Agreement, the provisions of this Section 511 shall control; and (iv) the rights of the Owners of the Book-Entry Preferred Securities Certificates shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Certificate Depository Agreement, unless and until Definitive Preferred Securities Certificates are issued pursuant to Section 513, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments on the Preferred Securities to such Clearing Agency Participants. (b) A single Common Securities Certificate representing the Common Securities shall be issued to the Depositor in the form of a definitive Common Securities Certificate. SECTION 512. NOTICES TO CLEARING AGENCY. To the extent that a notice or other communication to the Owners is required under this Trust Agreement, unless and until Definitive Preferred Securities Certificates shall have been issued to Owners pursuant to Section 513, the Trustees shall give all such notices and communications specified herein to be given to Owners to the Clearing Agency, and shall have no obligations to the Owners. SECTION 513. DEFINITIVE PREFERRED SECURITIES CERTIFICATES. If (a) the Depositor advises the Trustees in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Preferred Securities Certificates, and the Depositor is unable to locate a qualified successor, (b) the Depositor at its option advises the Trustees in writing that it elects to terminate the book-entry system through the Clearing Agency, or (c) after the occurrence of a Debenture Event of Default, Owners of Preferred Securities Certificates representing beneficial interests aggregating a majority of the Liquidation Amount advise the Property Trustee in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interest of the Owners of Preferred Securities Certificates, then the Property Trustee shall notify the Clearing Agency and the Clearing Agency shall notify all Owners of Preferred Securities Certificates and the other Trustees of the occurrence of any such event and of the availability of the Definitive Preferred Securities Certificates to Owners of such class or classes, as applicable, requesting the -24- same. Upon surrender to the Property Trustee of the typewritten Preferred Securities Certificate or Certificates representing the Book-Entry Preferred Securities Certificates by the Clearing Agency, accompanied by registration instructions, the Administrative Trustees, or any one of them, shall execute the Definitive Preferred Securities Certificates in accordance with the instructions of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Preferred Securities Certificates, the Trustees shall recognize the Securityholders of the Definitive Preferred Securities Certificates as Securityholders. The Definitive Preferred Securities Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by the Administrative Trustees or any one of them. SECTION 514. RIGHTS OF SECURITYHOLDERS. (a) The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 209, and the Securityholders shall not have any right or title therein other than the undivided beneficial interest in the assets of the Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or similar rights and when issued and delivered to Securityholders against payment of the purchase price therefor will be fully paid and nonassessable by the Trust. The Securityholders of the Trust Securities, in their capacities as such, shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. (b) For so long as any Preferred Securities remain Outstanding, if, upon a Debenture Event of Default, the Debenture Trustee fails or the holders of not less than 25% in principal amount of the outstanding Debentures fail to declare the principal of all of the Debentures to be immediately due and payable pursuant to the terms of the Indenture, the Securityholders of at least 25% in Liquidation Amount of the Preferred Securities then Outstanding shall have such right by a notice in writing to the Depositor and the Debenture Trustee; and upon any such declaration such principal amount of and the accrued interest on all of the Debentures shall become immediately due and payable, provided that the payment of principal and interest on such Debentures shall remain subordinated to the extent provided in the Indenture. (c) For so long as any Preferred Securities remain Outstanding, to the fullest extent permitted by law and subject to the terms of this Trust Agreement, upon a Debenture Event of Default specified in Section 501(1) or 501(2) of the Indenture, any Securityholder of Preferred Securities shall have the right to directly institute a proceeding for enforcement of payment to such Securityholder of the principal amount of or interest on the Debentures having a principal amount equal to the Liquidation Amount of the Preferred Securities of such Securityholder (a "Direct Action"). In connection with such Direct Action, the rights of the Securityholders of the Common Securities will be subrogated to the rights of any Securityholder of the Preferred Securities to the extent of any payment made by the Depositor to such Securityholder of Preferred Securities in such -25- Direct Action. Except as set forth in this Section 514(c), the Securityholders of Preferred Securities will not be able to exercise directly any other remedy available to the holders of the Debentures or assert directly any other rights in respect of the Debentures. ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING SECTION 601. Limitations on Voting Rights. (a) Except as provided in this Section, in Sections 810 and 1002 and in the Indenture and as otherwise required by law, no Holders of Preferred Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates, be construed so as to constitute the Securityholders from time to time as partners or members of an association. (b) So long as any Debentures are held by the Property Trustee, the Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or executing any trust or power conferred on the Debenture Trustee with respect to such Debentures, (ii) waive any past default which is waivable under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable or (iv) consent to any amendment, modification or termination of the Indenture or the Debentures, where such consent shall be required, without, in each case, obtaining the prior approval of the Securityholders of a majority in aggregate Liquidation Amount of all Outstanding Preferred Securities; provided, however, that where a consent under the Indenture would require the consent of each Securityholder of Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each Securityholder of Preferred Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of the Securityholders of Preferred Securities, except by a subsequent vote of the Securityholders of Preferred Securities. The Property Trustee shall notify all Securityholders of the Preferred Securities of any notice of default received from the Debenture Trustee with respect to the Debentures. In addition to obtaining the foregoing approvals of the Securityholders of the Preferred Securities, prior to taking any of the foregoing actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that the Trust will not be classified as an association taxable as a corporation for United States federal income tax purposes on account of such action. (c) If any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect in any material respect the powers, preferences or special rights of the Preferred Securities, whether by way of amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Securityholders of Outstanding Preferred Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Securityholders of a -26- majority in Liquidation Amount of the Outstanding Preferred Securities. No amendment to this Trust Agreement may be made if, as a result of such amendment, the Trust would be classified as an association taxable as a corporation for United States federal income tax purposes. SECTION 602. NOTICE OF MEETINGS. Notice of all meetings of the Preferred Securityholders, stating the time, place and purpose of the meeting, shall be given by the Property Trustee pursuant to Section 1008 to each Preferred Securityholder of record, at his registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice. SECTION 603. MEETINGS OF PREFERRED SECURITYHOLDERS. No annual meeting of Securityholders is required to be held. The Administrative Trustees, however, shall call a meeting of Securityholders to vote on any matter upon the written request of the Preferred Securityholders of record of 25% of the Preferred Securities (based upon their Liquidation Amount) and the Administrative Trustees or the Property Trustee may, at any time in its discretion, call a meeting of Preferred Securityholders to vote on any matters as to which Preferred Securityholders are entitled to vote. Preferred Securityholders of record of a majority of the Outstanding Preferred Securities (based upon their Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting of Securityholders. If a quorum is present at a meeting, an affirmative vote by the Preferred Securityholders of record present, in person or by proxy, holding more than a majority of the Preferred Securities (based upon their Liquidation Amount) held by the Preferred Securityholders of record present, either in person or by proxy, at such meeting shall constitute the action of the Securityholders, unless this Trust Agreement requires a greater number of affirmative votes. SECTION 604. VOTING RIGHTS. Securityholders shall be entitled to one vote for each $25 of Liquidation Amount represented by their Trust Securities in respect of any matter as to which such Securityholders are entitled to vote. SECTION 605. PROXIES, ETC. At any meeting of Securityholders, any Securityholder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not -27- be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution. SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any action which may be taken by Securityholders at a meeting may be taken without a meeting if Securityholders holding a majority of all Outstanding Trust Securities (based upon their Liquidation Amount) entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing. SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES. For the purposes of determining the Securityholders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than 90 days nor less than 30 days prior to the date of any meeting of Securityholders or the payment of a distribution not otherwise provided for in this Trust Agreement or other action, as the case may be, as a record date for the determination of the identity of the Securityholders of record for such purposes. SECTION 608. ACTS OF SECURITYHOLDERS. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Securityholders or Owners may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders or Owners in person or by an agent duly appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to an Administrative Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders or Owners signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 801) conclusive in favor of the Trustees, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which any Trustee receiving the same deems sufficient. The ownership of Preferred Securities shall be proved by the Securities Register. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security -28- and the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security. Without limiting the foregoing, a Securityholder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount. If any dispute shall arise between the Securityholders and the Administrative Trustees or among such Securityholders or Administrative Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Securityholder or Administrative Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter. A Securityholder may institute a legal proceeding directly against the Depositor under the Guarantee to enforce its rights under the Guarantee without first instituting a legal proceeding against the Guarantee Trustee (as defined in the Guarantee), the Trust or any Person or entity. SECTION 609. INSPECTION OF RECORDS. Upon reasonable notice to the Administrative Trustees and the Property Trustee, the records of the Trust shall be open to inspection by Securityholders during normal business hours for any purpose reasonably related to such Securityholder's interest as a Securityholder. ARTICLE VII REPRESENTATIONS AND WARRANTIES SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE. (a) The Delaware Trustee hereby represents and warrants for the benefit of the Depositor and the Securityholders that: (i) it is a Delaware banking corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (ii) it has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (iii) this Trust Agreement has been duly authorized, executed and delivered by it and constitutes its valid and legally binding agreement enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, -29- moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (iv) the execution, delivery and performance by it of this Trust Agreement has been duly authorized by all necessary corporate or other action on its part and does not require any approval of its stockholders and such execution, delivery and performance will not (i) violate its charter or by-laws, (ii) violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the creation or imposition of, any Lien on any properties included in the Trust Property pursuant to the provisions of, any indenture, mortgage, credit agreement, license or other agreement or instrument to which it is a party or by which it is bound, or (iii) violate any law, governmental rule or regulation of the United States or the State of Delaware, as the case may be, governing its banking or trust powers or any order, judgment or decree applicable to it; (v) neither the authorization, execution or delivery by it of this Trust Agreement nor the consummation of any of the transactions by it contemplated herein or therein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing federal law governing its banking or trust powers under the laws of the United States or the State of Delaware; (vi) there are no proceedings pending or, to the best of its knowledge, threatened against or affecting it in any court or before any governmental authority, agency or arbitration board or tribunal which, individually or in the aggregate, would materially and adversely affect the Trust or would question its right, power and authority to enter into or perform its obligations as one of the Trustees under this Trust Agreement. (b) The Property Trustee represents and warrants for the benefit of the Depositor and the Securityholders that: (i) it is a New York banking corporation duly organized, validly existing and in good standing under the laws of the State of New York; (ii) it has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (iii) this Trust Agreement has been duly authorized, executed and delivered by it and constitutes its valid and legally binding agreement enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (iv) the execution, delivery and performance by it of this Trust Agreement has been duly authorized by all necessary corporate or other action on its part and does not require any -30- approval of its stockholders and such execution, delivery and performance will not (A) violate its charter or by-laws, (B) violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the creation or imposition of, any Lien on any properties included in the Trust Property pursuant to the provisions of, any indenture, mortgage, credit agreement, license or other agreement or instrument to which it is a party or by which it is bound, or (C) violate any law, governmental rule or regulation of the United States or the State of New York, as the case may be, governing its banking or trust powers or any order, judgment or decree applicable to it; (v) neither the authorization, execution or delivery by it of this Trust Agreement nor the consummation of any of the transactions by it contemplated herein or therein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing federal law governing its banking or trust powers under the laws of the United States or the State of New York; (vi) there are no proceedings pending or, to the best of its knowledge, threatened against or affecting it in any court or before any governmental authority, agency or arbitration board or tribunal which, individually or in the aggregate, would materially and adversely affect the Trust or would question its right, power and authority to enter into or perform its obligations as one of the Trustees under this Trust Agreement. SECTION 702. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR. The Depositor hereby represents and warrants for the benefit of the Securityholders that: (a) the Trust Securities Certificates issued at each Time of Delivery on behalf of the Trust have been duly authorized and will have been duly and validly executed, issued and delivered by the Trustees pursuant to the terms and provisions of, and in accordance with the requirements of, this Trust Agreement and the Securityholders will be, as of such date, entitled to the benefits of this Trust Agreement; and (b) there are no taxes, fees or other governmental charges payable by the Trust (or the Trustees on behalf of the Trust) under the laws of the State of Delaware or any political subdivision thereof in connection with the execution, delivery and performance by the Property Trustee or the Delaware Trustee, as the case may be, of this Trust Agreement. ARTICLE VIII THE TRUSTEES SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES. (a) The duties and responsibilities of the Trustees shall be as provided by this Trust Agreement and, in the case of the Property Trustee, by the Trust Indenture Act. The Property Trustee, before the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred, shall undertake to perform only such duties and obligations as are specifically set forth in this Trust Agreement and the Trust Indenture Act and no implied covenants shall be read into this Trust Agreement against the Property Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 802) of which a Responsible Officer of the Property Trustee has actual knowledge, the Property Trustee shall exercise such rights and powers vested in it by this Trust Agreement and the Trust Indenture Act, and use the same degree of care and skill in its exercise, as a prudent individual would exercise or use under the circumstances in the conduct of his or her own affairs. Notwithstanding the foregoing, no provision of this Trust Agreement shall require the Trustees to expend or risk their own funds or otherwise incur any financial liability in the performance of any of their duties hereunder, or in the exercise of any of their rights or powers, -31- if they shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section. Nothing in this Trust Agreement shall be construed to release the Property Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct. To the extent that, at law or in equity, an Administrative Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to the Securityholders, such Administrative Trustee shall not be liable to the Trust or to any Securityholder for such Trustee's good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of the Administrative Trustees otherwise existing at law or in equity, are agreed by the Depositor and the Securityholders to replace such other duties and liabilities of the Administrative Trustees. (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the revenue and proceeds from the Trust Property and only to the extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 801(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act. (c) No provision of this Trust Agreement shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) the Property Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts; (ii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Securityholders of not less than a majority in Liquidation Amount of the Trust Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement; (iii) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Debentures and the Payment Account shall be to deal with such Property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement and the Trust Indenture Act; -32- (iv) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Depositor, and money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 301 and except to the extent otherwise required by law; and (v) the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of the Administrative Trustees or the Depositor. SECTION 802. CERTAIN NOTICES. Within fifteen Business Days after the occurrence of any Event of Default known (as set forth in Section 803(m)) to the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent provided in Section 1008, notice of such Event of Default to the Securityholders, the Administrative Trustees and the Depositor, unless such Event of Default shall have been cured or waived; PROVIDED, that, except for a default in the payment of principal of (or premium, if any) or interest on any of the Debentures, the Property Trustee shall be protected in withholding such notice if and so long as the Board of Directors, the executive committee, or a trust committee of directors and/or Responsible Officers of the Property Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Preferred Securities. The Depositor and the Administrative Trustees are required to file annually with the Property Trustee a certificate (and in the case of the Depositor, an Officers' Certificate) as to whether or not they are in compliance with all the conditions and covenants applicable to them under the Trust Agreement and, with respect to the certificate of the Administrative Trustees, the Property Trustee may rely on such certificate to the same effect as it can rely on an Officers' Certificate. Within five Business Days after the receipt of notice of the Depositor's exercise of its right to defer the payment of interest on the Debentures pursuant to the Indenture, the Administrative Trustees shall transmit, in the manner and to the extent provided in Section 1008, notice of such exercise to the Securityholders and the Property Trustee, unless such exercise shall have been revoked or unless the Administrative Trustees have received a written certification from the Debenture Trustee that such notice has been duly given. SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the provisions of Section 801: (a) the Property Trustee may rely and shall be protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Securityholder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) if no Event of Default has occurred and is continuing and (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action or (ii) in construing any of the provisions of this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (iii) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Preferred Securityholders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken and the Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that if the Property Trustee -33- does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders and shall have no liability except for its own bad faith, negligence or willful misconduct; (c) any direction or act of the Depositor or the Administrative Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers' Certificate; (d) whenever in the administration of this Trust Agreement, the Property Trustee shall deem it desirable that a matter be established before undertaking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) shall be entitled in the absence of bad faith on its part, to request and rely upon certificate which, upon receipt of such request, shall be promptly delivered by the Depositor (in which case such certificate shall be an Officers' Certificate) or the Administrative Trustees (and if from the Administrative Trustees, the Property Trustee may rely on such Certificate to the same extent it can rely on an Officers' Certificate of the Depositor); (e) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any rerecording, refiling or reregistration thereof; (f) the Property Trustee may consult with counsel (which counsel may be counsel to the Depositor or any of its Affiliates, and may include any of its employees) and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction; (g) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Securityholders pursuant to this Trust Agreement, unless such Securityholders shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (h) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless requested in writing to do so by one or more Securityholders, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit; -34- (i) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys, provided that the Property Trustee shall be responsible for its own negligence or recklessness with respect to selection of any agent or attorney appointed by it hereunder; (j) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder the Property Trustee (i) may request instructions from the Securityholders of the Trust Securities which instructions may only be given by the Securityholders of the same proportion in Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust Securities in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in acting in accordance with such instructions; (k) the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement; (l) when the Property Trustee incurs expenses or renders services in connection with a Bankruptcy Event, such expenses (including the fees and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy law or law relating to creditors rights generally; and (m) the Property Trustee shall not be charged with knowledge or an Event of Default unless a Responsible Officer of the Property Trustee obtains actual knowledge of such event or the Property Trustee receives written notice of such event from Securityholders holding at least 25%, of the Outstanding Trust Securities (based upon Liquidation Amount). No provision of this Trust Agreement shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee shall be construed to be a duty. SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Trust, and the Trustees do not assume any responsibility for their correctness. The Trustees shall not be accountable for the use or application by the Depositor of the proceeds of the Debentures. SECTION 805. MAY HOLD SECURITIES. Except as provided in the definition of the term "Outstanding" in Article I, any Trustee or any other agent of any Trustee or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and, subject to Sections 808 and 813, may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such other agent. SECTION 806. COMPENSATION; INDEMNITY; FEES. The Depositor agrees: (a) to pay to the Trustees from time to time reasonable compensation for all services rendered by them hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the -35- Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (c) to indemnify each of the Trustees or any predecessor Trustee for, and to hold the Trustees harmless against, any loss, damage, claims, liability, penalty or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Trust Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The provisions of this Section 806 shall survive the termination of this Trust Agreement or the earlier resignation or removal of any Trustee. No Trustee may claim any lien or charge on any Trust Property as a result of any amount due pursuant to this Section 806. SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES. (a) There shall at all times be a Property Trustee hereunder with respect to the Trust Securities. The Property Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. (b) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind that entity. (c) There shall at all times be a Delaware Trustee with respect to the Trust Securities. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity with its principal place of business in the State of Delaware and that otherwise meets the requirements of applicable Delaware law that shall act through one or more persons authorized to bind such entity. SECTION 808. CONFLICTING INTERESTS. If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement. SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE. Unless an Event of Default shall have occurred and be continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property -36- may at the time be located, the Depositor and the Administrative Trustees, by agreed action of the majority of such Trustees, shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such purpose join with the Administrative Trustees in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to the extent required by law to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case a Debenture Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make such appointment. Any co-trustee or separate trustee appointed pursuant to this Section shall either be (i) a natural person who is at least 21 years of age and a resident of the United States or (ii) a legal entity with its principal place of business in the United States that shall act through one or more persons authorized to bind such entity. Should any written instrument from the Depositor be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Depositor. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: (a) The Trust Securities shall be executed and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustees specified hereunder, shall be exercised, solely by such Trustees and not by such co-trustee or separate trustee. (b) The rights, powers, duties and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee. (c) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case a Debenture Event of Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join -37- with the Property Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section. (d) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee or any other trustee hereunder. (e) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee. (f) Any Act of Securityholders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. No resignation or removal of any Trustee (the "Relevant Trustee") and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 811. Subject to the immediately preceding paragraph, the Relevant Trustee may resign at any time with respect to the Trust Securities by giving written notice thereof to the Securityholders. If the instrument of acceptance by the successor Trustee required by Section 811 shall not have been delivered to the Relevant Trustee within 30 days after the giving of such notice of resignation, the Relevant Trustee may petition, at the expense of the Depositor, any court of competent jurisdiction for the appointment of a successor Relevant Trustee with respect to the Trust Securities. Unless a Debenture Event of Default shall have occurred and be continuing, any Trustee may be removed at any time by Act of the Common Securityholder. If a Debenture Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed at such time by Act of the Securityholders of a majority in Liquidation Amount of the Preferred Securities, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). An Administrative Trustee may be removed by the Common Securityholder at any time. If any Trustee shall resign, be removed or become incapable of acting as a Trustee, or if a vacancy shall occur in the office of any Trustee for any cause, at a time when no Debenture Event of Default shall have occurred and be continuing, the Common Securityholder, by Act of the Common Securityholder delivered to the retiring Trustee, shall promptly appoint a successor Trustee or Trustees with respect to the Trust Securities and the Trust, and the successor Trustee shall comply with the applicable requirements of Section 811. If the Property Trustee or the Delaware Trustee shall resign, be removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case may be, at a time when a Debenture Event of Default shall have occurred and be continuing, the Preferred Securityholders, by Act of the Securityholders of a majority in Liquidation Amount of the Preferred Securities then Outstanding delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees with respect to the Trust -38- Securities and the Trust, and such successor Trustee shall comply with the applicable requirements of Section 811. If an Administrative Trustee shall resign, be removed or become incapable of acting as Administrative Trustee, at a time when a Debenture Event of Default shall have occurred and be continuing, the Common Securityholder, by Act of the Common Securityholder delivered to the Administrative Trustee, shall promptly appoint a successor Administrative Trustee or Administrative Trustees with respect to the Trust Securities and the Trust, and such successor Administrative Trustee or Administrative Trustees shall comply with the applicable requirements of Section 811. If no successor Relevant Trustee with respect to the Trust Securities shall have been so appointed by the Common Securityholder or the Preferred Securityholders and accepted appointment in the manner required by Section 811, any Securityholder who has been a Securityholder of Trust Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee with respect to the Trust Securities. The Property Trustee shall give notice of each resignation and each removal of a Trustee and each appointment of a successor Trustee to all Securityholders in the manner provided in Section 1008 and shall give notice to the Depositor. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee. Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the Depositor, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (a) the unanimous act of remaining Administrative Trustees if there are at least two of them or (b) otherwise by the Depositor (with the successor in each case being a Person who satisfies the eligibility requirement for Administrative Trustees set forth in Section 807). SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the appointment hereunder of a successor Trustee such successor Trustee so appointed shall execute, acknowledge and deliver to an Administrative Trustee on behalf of the Trust and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Depositor or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and if the Property Trustee is the resigning Trustee shall duly assign, transfer and deliver to the successor Trustee all property and money held by such retiring Property Trustee hereunder. In case of the appointment hereunder of a successor Relevant Trustee with respect to the Trust Securities and the Trust, the retiring Relevant Trustee and each successor Relevant Trustee with respect to the Trust Securities shall execute and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Trust and (b) shall add to or change any of the provisions of this Trust -39- Agreement as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Relevant Trustee, it being understood that nothing herein or in such amendment shall constitute such Relevant Trustees co-trustees of the same trust and that each such Relevant Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Relevant Trustee and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Trust; but, on request of the Trust or any successor Relevant Trustee such retiring Relevant Trustee shall duly assign, transfer and deliver to such successor Relevant Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Trust. Upon request of any such successor Relevant Trustee, the Trust shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be. No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article. SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Property Trustee, the Delaware Trustee or any Administrative Trustee that is not a natural person may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Relevant Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of such Relevant Trustee, shall be the successor of such Relevant Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST. If and when the Property Trustee or the Delaware Trustee shall be or become a creditor of the Depositor or the Trust (or any other obligor upon the Debentures or the Trust Securities), the Property Trustee or the Delaware Trustee, as the case may be, shall be subject to and shall take all actions necessary in order to comply with the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor or Trust (or any such other obligor). SECTION 814. REPORTS BY PROPERTY TRUSTEE. (a) Not later than February 15 of each year commencing with February 15, 1998, the Property Trustee shall transmit to all Securityholders in accordance with Section 1008, and to the Depositor, a brief report dated as of the next preceding December 31 with respect to: (i) its eligibility under Section 807 or, in lieu thereof, if to the best of its knowledge it has continued to be eligible under said Section, a written statement to such effect; -40- (ii) a statement that the Property Trustee has complied with all of its obligations under this Trust Agreement during the twelve-month period (or, in the case of the initial report, the period since the Closing Date) ending with such December 31 or, if the Property Trustee has not complied in any material respect with such obligations, a description of such noncompliance; and (iii) any change in the property and funds in its possession as Property Trustee since the date of its last report and any action taken by the Property Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially affects the Trust Securities. (b) In addition, the Property Trustee shall transmit to Securityholders such reports concerning the Property Trustee and its actions under this Trust Agreement as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. (c) A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Property Trustee with each national securities exchange, the Nasdaq National Market or such other interdealer quotation system or self-regulatory organization upon which the Trust Securities are listed or traded, with the Commission and with the Depositor. SECTION 815. REPORTS TO THE PROPERTY TRUSTEE. The Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if any) and the compliance certificate required by Section 314(a) of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each of the Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers' Certificate. SECTION 817. NUMBER OF TRUSTEES. (a) The number of Trustees shall be four, provided that the Securityholder of all of the Common Securities by written instrument may increase or decrease the number of Administrative Trustees. The Property Trustee and the Delaware Trustee may be the same person. (b) If a Trustee ceases to hold office for any reason and the number of Administrative Trustees is not reduced pursuant to Section 817(a), or if the number of Trustees is increased pursuant to Section 817(a), a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in accordance with Section 810. (c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul the Trust. Whenever a vacancy in the -41- number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 810, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Agreement), shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement. SECTION 818. DELEGATION OF POWER. (a) Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Section 207(a), including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing. (b) The Administrative Trustees shall have power to delegate from time to time to such of their number or to the Depositor the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. ARTICLE IX TERMINATION, LIQUIDATION AND MERGER SECTION 901. TERMINATION UPON EXPIRATION DATE. Unless earlier terminated, the Trust shall automatically terminate on ___________, 2052 (the "Expiration Date"), following the distribution of the Trust Property in accordance with Section 904. SECTION 902. EARLY TERMINATION. The first to occur of any of the following events is an "Early Termination Event": (a) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, the Depositor; (b) the written direction to the Property Trustee from the Depositor at any time (which direction is optional and wholly within the discretion of the Depositor) to terminate the Trust and distribute the Debentures in exchange for the Preferred Securities; (c) the redemption of all of the Preferred Securities in connection with the redemption of all of the Debentures; and (d) the entry of an order for dissolution of the Trust by a court of competent jurisdiction. SECTION 903. TERMINATION. The respective obligations and responsibilities of the Trustees and the Trust created and continued hereby shall terminate upon the latest to occur of the following: (a) the distribution by the Property Trustee to Securityholders upon the liquidation of the -42- Trust pursuant to Section 904, or upon the redemption of all of the Trust Securities pursuant to Section 402, of all amounts required to be distributed hereunder upon the final payment of the Trust Securities; (b) the payment of any expenses owed by the Trust; and (c) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust or the Securityholders. SECTION 904. LIQUIDATION. (a) If an Early Termination Event specified in clause (a), (b) or (d) of Section 902 occurs or upon the Expiration Date, the Trust shall be liquidated by the Trustees as expeditiously as the Trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to each Securityholder a Like Amount of Debentures, subject to Section 904(d). Notice of liquidation shall be given by the Depositor or the Property Trustee at the direction and expense of the Depositor by first-class mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder's address appearing in the Securities Register. All notices of liquidation shall: (i) state the Liquidation Date; (ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Debentures; and (iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Debentures, or if Section 904(d) applies receive a Liquidation Distribution, as the Administrative Trustees or the Property Trustee shall deem appropriate. (b) Except where Section 902(c) or 904(d) applies, in order to effect the liquidation of the Trust and distribution of the Debentures to Securityholders, the Property Trustee shall establish a record date for such distribution (which shall be not more than 45 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Debentures in exchange for the Outstanding Trust Securities Certificates. (c) Except where Section 902(c) or 904(d) applies, after the Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Debentures will be issued to Securityholders of Trust Securities Certificates, upon surrender of such certificates to the Administrative Trustees or their agent for exchange, (iii) the Depositor shall use its reasonable efforts to have the Debentures listed on the New York Stock Exchange or on such other stock exchange, interdealer quotation system or self-regulatory organization as the Preferred Securities are then listed or traded, (iv) any Trust Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Debentures, accruing interest at the rate provided for in the Debentures from the last Distribution Date on which a Distribution was made on such Trust Securities Certificates until such certificates are so surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Securityholders of Trust Securities Certificates with respect to such Debentures), and (v) all rights of Securityholders holding Trust -43- Securities will cease, except the right of such Securityholders to receive Debentures upon surrender of Trust Securities Certificates. (d) In the event that, notwithstanding the other provisions of this Section 904, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Debentures in the manner provided herein is determined by the Property Trustee not to be practical, the Trust Property shall be liquidated, and the Trust shall be dissolved, wound-up or terminated, by the Property Trustee in such manner as the Property Trustee determines. In such event, on the date of the dissolution, winding-up or other termination of the Trust, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to Securityholders, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If, upon any such dissolution, winding-up or termination, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Securityholder of the Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution, winding-up or termination pro rata (determined as aforesaid) with Securityholders of Preferred Securities, except that, if a Debenture Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities. SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST. The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other body, except pursuant to this Section 905. At the request of the Depositor, with the consent of or notice to the Administrative Trustees and without the consent of the Securityholders of the Preferred Securities, the Trust may merge with or into, consolidate, amalgamate, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any state; provided, that (i) such successor entity either (a) expressly assumes all of the obligations of the Trust with respect to the Preferred Securities or (b) substitutes for the Preferred Securities other securities having substantially the same terms as the Preferred Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Preferred Securities rank in priority with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a trustee of such successor entity possessing the same powers and duties as the Property Trustee as the holder of the Debentures, (iii) the Successor Securities are listed or traded, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Preferred Securities are then listed or traded, if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Securityholders of the Preferred Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Depositor -44- has received an Opinion of Counsel experienced in such matters to the effect that (a) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Securityholders of the Preferred Securities (including any Successor Securities) in any material respect, and (b) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor such successor entity will be required to register as an investment company under the 1940 Act and (viii) the Depositor owns all of the Common Securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of Securityholders of 100% in Liquidation Amount of the Preferred Securities, consolidate, amalgamate, merge with or into, be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it or acquire or lease its properties and assets substantially as an entirety if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. ARTICLE X MISCELLANEOUS PROVISIONS SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS. The death or incapacity of any person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement, or entitle the legal representatives or heirs of such person or any Securityholder for such person to claim an accounting, take any action or bring any proceeding in any court for a partition or winding-up of the arrangements contemplated hereby, or otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. SECTION 1002. AMENDMENT. (a) This Trust Agreement may be amended from time to time by the Trustees and the Depositor, without the consent of any Securityholders, (i) to cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement, or (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will be classified for United States federal income tax purposes as a grantor trust at all times that any Trust Securities are outstanding or to ensure that the Trust will not be required to register as an investment company under the 1940 Act; provided, however, that in the case of clause (i), such action shall not adversely affect in any material respect the interests of any Securityholder, and any amendments of this Trust Agreement shall become effective when notice thereof is given to the Securityholders. (b) Except as provided in Section 1002(c) hereof, any provision of this Trust Agreement may be amended by the Trustees and the Depositor with (i) the consent of Securityholders representing a majority (based upon Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel experienced in such matters to the effect that -45- such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for United States federal income tax purposes or the Trust's exemption from status of an investment company under the 1940 Act. (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Securityholder (such consent being obtained in accordance with Section 603 or 606 hereof), this Trust Agreement may not be amended to (i) change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a Securityholder to institute suit for the enforcement of any such payment on or after such date. Notwithstanding any other provision herein, without the unanimous consent of the Securityholders (such consent being obtained in accordance with Section 603 or 606 hereof), this paragraph (c) of this Section 1002 may not be amended. (d) Notwithstanding any other provisions of this Trust Agreement, no Trustee shall enter into or consent to any amendment to this Trust Agreement which would cause the Trust to fail or cease to qualify for the exemption from status of an investment company under the 1940 Act or fail or cease to be classified as a grantor trust for United States federal income tax purposes. (e) Notwithstanding anything in this Trust Agreement to the contrary, without the consent of the Depositor, this Trust Agreement may not be amended in a manner which imposes any additional obligation on the Depositor. (f) In the event that any amendment to this Trust Agreement is made, the Administrative Trustees shall promptly provide to the Depositor a copy of such amendment. (g) Neither the Property Trustee nor the Delaware Trustee shall be required to enter into any amendment to this Trust Agreement which affects its own rights, duties or immunities under this Trust Agreement. The Property Trustee shall be entitled to receive an Opinion of Counsel and an Officers' Certificate stating that any amendment to this Trust Agreement is in compliance with this Trust Agreement. SECTION 1003. SEPARABILITY. In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 1004. GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE. SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY. If the date fixed for any payment on any Trust Security shall be a day that is not a Business Day, then such payment need not be made on such date but may be made on the next succeeding day that is a Business Day (except as otherwise -46- provided in Sections 401(a) and 402(d)), with the same force and effect as though made on the date fixed for such payment, and no interest shall accrue thereon for the period after such date. SECTION 1006. SUCCESSORS. This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Trust or the Relevant Trustee, including any successor by operation of law. Except in connection with a consolidation, merger or sale involving the Depositor that is permitted under Article Eight of the Indenture and pursuant to which the assignee agrees in writing to perform the Depositor's obligations hereunder, the Depositor shall not assign its obligations hereunder. SECTION 1007. HEADINGS. The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement. SECTION 1008. REPORTS, NOTICES AND DEMANDS. Any report, notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may be given or served in writing by deposit thereof, first-class postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (a) in the case of a Preferred Securityholder, to such Preferred Securityholder as such Securityholder's name and address may appear on the Securities Register; and (b) in the case of the Common Securityholder or the Depositor, to Nevada Power Company, 6226 West Sahara Avenue, Las Vegas, Nevada 89102, Attention: Treasurer, facsimile no.: (702)367-5629. Any notice to Preferred Securityholders shall also be given to such owners as have, within two years preceding the giving of such notice, filed their names and addresses with the Property Trustee for that purpose. Such notice, demand or other communication to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or transmission. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Trust, the Property Trustee or the Administrative Trustees shall be given in writing addressed (until another address is published by the Trust) as follows: (a) with respect to the Property Trustee to IBJ Schroder Bank & Trust Company, One State Street, New York, New York 10004, Attention: Corporate Trust Department; (b) with respect to the Delaware Trustee, to Delaware Trust Capital Management, Inc., 900 Market Street, Second Floor, Wilmington, Delaware 19801, Attention: Corporate Trust Department; and (c) with respect to the Administrative Trustees, to them at the address above for notices to the Depositor, marked "Attention: Administrative Trustees of NVP Capital I." Such notice, demand or other communication to or upon the Trust or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust or the Property Trustee. SECTION 1009. AGREEMENT NOT TO PETITION. Each of the Trustees and the Depositor agree for the benefit of the Securityholders that, until at least one year and one day after the Trust has been terminated in accordance with Article IX, they shall not file, or join in the filing of, a petition against the Trust under any bankruptcy, insolvency, reorganization or other similar law (including, without limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Trust under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 1009, the Property Trustee -47- agrees, for the benefit of Securityholders, that at the expense of the Depositor, it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be stopped and precluded therefrom and such other defenses, if any, as counsel for the Trustee or the Trust may assert. The provisions of this Section 1009 shall survive the termination of this Trust Agreement. SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT. (a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a trustee for the purposes of the Trust Indenture Act. (c) If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Trust Agreement by any of the provisions of the Trust Indenture Act, such required provision shall control. If any provision of this Trust Agreement modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Trust Agreement as so modified or excluded, as the case may be. (d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Securities as equity securities representing undivided beneficial interests in the assets of the Trust. SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND INDENTURE. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS. -48- NEVADA POWER COMPANY By: ____________________________________ Name: ____________________________________ Title: ____________________________________ IBJ SCHRODER BANK & TRUST COMPANY as Property Trustee By: ____________________________________ Name: ____________________________________ Title: ____________________________________ DELAWARE TRUST CAPITAL MANAGEMENT, INC., as Delaware Trustee By: ____________________________________ Name: ____________________________________ Title: ____________________________________ ______________________________________________ Richard L. Hinckley, as Administrative Trustee ______________________________________________ Richard C. Schmalz, Jr., as Administrative Trustee -49- EXHIBIT A CERTIFICATE OF TRUST OF NVP CAPITAL I THIS Certificate of Trust of NVP Capital I (the "Trust"), dated as of __________, 1997, is being duly executed and filed by Delaware Trust Capital Management, Inc., a Delaware banking corporation, as trustee, to form a business trust under the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.). 1. Name. The name of the business trust formed hereby is NVP Capital I. 2. Delaware Trustee. The name and business address of the trustee of the Trust in the State of Delaware are Delaware Trust Capital Management, Inc., 900 Market Street, Second Floor, Wilmington, Delaware 18901. 3. Effective Date. This Certificate of Trust shall be effective upon filing with the Secretary of State. IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust, has executed this Certificate of Trust as of the date first above written. Delaware Trust Capital Management, Inc., as trustee By: ____________________________________ Name: ____________________________________ Title: ____________________________________ A-1 EXHIBIT B The Depository Trust Company, 55 Water Street, 49th Floor, New York, New York 10041-0099. Attention: John C. Drennan General Counsel's Office Re: NVP Capital I % Cumulative Quarterly Income Preferred Securities, Series A ----------------------------------------------- Ladies and Gentlemen: The purpose of this letter is to set forth certain matters relating to the issuance and deposit with The Depository Trust Company ("DTC") of the NVP Capital I ____% Cumulative Quarterly Income Preferred Securities, Series A (the "Preferred Securities"), of NVP Capital I, a Delaware business trust (the "Issuer"), formed pursuant to a Trust Agreement among Nevada Power Company ("NVP"), as Depositor and IBJ Schroder Bank & Trust Company, as Property Trustee, Delaware Trust Capital Management, Inc., as Delaware Trustee and the Administrative Trustees named therein. The payment of distributions on the Preferred Securities and payments due upon liquidation of Issuer or redemption of the Preferred Securities, to the extent the Issuer has funds available for the payment thereof, are guaranteed by NVP to the extent set forth in a Guarantee Agreement dated March 1, 1997 by NVP with respect to the Preferred Securities. NVP and the Issuer propose to sell the Preferred Securities to certain Underwriters (the "Underwriters") pursuant to an Underwriting Agreement dated ______, 1997 by and among the Underwriters, the Issuer and NVP, and the Underwriters wish to take delivery of the Preferred Securities through DTC. IBJ Schroder Bank & Trust Company is acting as transfer agent and registrar with respect to the Preferred Securities (the "Transfer Agent and Registrar"). To induce DTC to accept the Preferred Securities as eligible for deposit at DTC, and to act in accordance with DTC's rules with respect to the Preferred Securities, the Issuer, the Transfer Agent and Registrar and DTC agree among each other as follows: 1. Prior to the closing of the sale of the Preferred Securities to the Underwriters, which is expected to occur on or about ______, 1997, there shall be deposited with DTC one or more global certificates (individually and collectively, the "Global Certificate") registered in the name of DTC's Preferred Securities nominee, Cede & Co., representing an aggregate of 5,000,000 Preferred Securities and bearing the following legend: Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), B-1 to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. 2. The Amended and Restated Trust Agreement of the Issuer provides for the voting by holders of the Preferred Securities under certain limited circumstances. The Issuer shall establish a record date for such purposes and shall, to the extent possible, give DTC notice of such record date not less than 15 calendar days in advance of such record date. 3. In the event of a stock split, conversion, recapitalization, reorganization or any other similar transaction resulting in the cancellation of all or any part of the Preferred Securities outstanding, the Issuer or the Transfer Agent and Registrar shall send DTC a notice of such event at least 5 business days prior to the effective date of such event. 4. In the event of distribution on, or an offering or issuance of rights with respect to, the Preferred Securities outstanding, the Issuer or the Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount of and conditions, if any, applicable to the payment of any such distribution or any such offering or issuance of rights; (b) any applicable expiration or deadline date, or any date by which any action on the part of the holders of Preferred Securities is required; and (c) the date any required notice is to be mailed by or on behalf of the Issuer to holders of Preferred Securities or published by or on behalf of the Issuer (whether by mail or publication, the "Publication Date"). Such notice shall be sent to DTC by a secure means (e.g., legible telecopy, registered or certified mail, overnight delivery) in a timely manner designed to assure that such notice is in DTC's possession no later than the close of business on the business day before the Publication Date. The Issuer or the Transfer Agent and Registrar will forward such notice either in a separate secure transmission for each CUSIP number or in a secure transmission of multiple CUSIP numbers (if applicable) that includes a manifest or list of each CUSIP number submitted in that transmission. (The party sending such notice shall have a method to verify subsequently the use of such means and the timeliness of such notice.) The Publication Date shall be not less than 30 calendar days nor more than 60 calendar days prior to the payment of any such distribution or any such offering or issuance of rights with respect to the Preferred Securities. After establishing the amount of payment to be made on the Preferred Securities, the Issuer or the Transfer Agent and Registrar will notify DTC's Dividend Department of such payment 5 business days prior to payment date. Notices to DTC's Dividend Department by telecopy shall be sent to (212) 709- 1723. Such notices by mail or by any other means shall be sent to: B-2 Manager, Announcements Dividend Department The Depository Trust Company 7 Hanover Square, 23rd Floor New York, New York 10004-2695 The Issuer or the Transfer Agent and Registrar shall confirm DTC's receipt of such telecopy by telephoning the Dividend Department at (212) 709-1270. 5. In the event of a redemption by the Issuer of the Preferred Securities, notice specifying the terms of the redemption and the Publication Date of such notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC not less than 30 calendar days prior to such event by a secure means in the manner set forth in paragraph 4. Such redemption notice shall be sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190, and receipt of such notice shall be confirmed by telephoning (516) 227-4070. Notice by mail or by any other means shall be sent to: Call Notification Department The Depository Trust Company 711 Stewart Avenue Garden City, New York 11530-4719 6. In the event of any invitation to tender the Preferred Securities, notice specifying the terms of the tender and the Publication Date of such notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by a secure means and in a timely manner as described in paragraph 4. Notices to DTC pursuant to this paragraph and notices of other corporate actions (including mandatory tenders, exchanges and capital changes), shall be sent, unless notification to another department is expressly provided for herein, by telecopy to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094 and receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by mail or any other means to: Manager, Reorganization Department Reorganization Window The Depository Trust Company 7 Hanover Square, 23rd Floor New York, New York 10004-2695 7. All notices and payment advices sent to DTC shall contain the CUSIP number or numbers of the Preferred Securities and the accompanying designation of the Preferred Securities, which, as of the date of this letter, is "NVP Capital I ____% Cumulative Quarterly Income Preferred Securities, Series A". 8. Distribution payments or other cash payments with respect to the Preferred Securities evidenced by the Global Certificate shall be received by Cede & Co., as nominee of DTC, or its registered assigns in next day funds on each payment date (or in accordance with existing B-3 arrangements between the Issuer or the Transfer Agent and Registrar and DTC). Such payments shall be made payable to the order of Cede & Co., and shall be addressed as follows: NDFS Redemption Department The Depository Trust Company 7 Hanover Square, 23rd Floor New York, New York 10004-2695 9. DTC may by prior written notice direct the Issuer and the Transfer Agent and Registrar to use any other telecopy number or address of DTC as the number or address to which notices or payments may be sent. 10. In the event of a conversion, redemption, or any other similar transaction (e.g., tender made and accepted in response to the Issuer's or the Transfer Agent and Registrar's invitation) necessitating a reduction in the aggregate number of Preferred Securities outstanding evidenced by the Global Certificate, DTC, in its discretion: (a) may request the Issuer or the Transfer Agent and Registrar to issue and countersign a new Global Certificate; or (b) may make an appropriate notation on the Global Certificate indicating the date and amount of such reduction. 11. DTC may discontinue its services as a securities depositary with respect to the Preferred Securities at any time by giving at least 90 days' prior written notice to the Issuer and the Transfer Agent and Registrar (at which time DTC will confirm with the Issuer or the Transfer Agent and Registrar the aggregate number of Preferred Securities deposited with it) and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Issuer may determine to make alternative arrangements for book-entry settlement for the Preferred Securities, make available one or more separate global certificates evidencing Preferred Securities to any Participant having Preferred Securities credited to its DTC account, or issue definitive Preferred Securities to the beneficial holders thereof, and in any such case, DTC agrees to cooperate fully with the Issuer and the Transfer Agent and Registrar and to return the Global Certificate, duly endorsed for transfer as directed by the Issuer or the Transfer Agent and Registrar, together with any other documents of transfer reasonably requested by the Issuer or the Transfer Agent and Registrar. 12. In the event that the Issuer determines that beneficial owners of Preferred Securities shall be able to obtain definitive Preferred Securities, the Issuer or the Transfer Agent and Registrar shall notify DTC of the availability of certificates. In such event, the Issuer or the Transfer Agent and Registrar shall issue, transfer and exchange certificates in appropriate amounts, as required by DTC and others, and DTC agrees to cooperate fully with the Issuer and the Transfer Agent and Registrar and to return the Global Certificate, duly endorsed for transfer as directed by the Issuer or the Transfer Agent and Registrar, together with any other documents of transfer reasonably requested by the Issuer or the Transfer Agent and Registrar. 13. This letter may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. B-4 Nothing herein shall be deemed to require the Transfer Agent and Registrar to advance funds on behalf of NVP Capital I. Very truly yours, NVP CAPITAL I (As Issuer) By: ______________________________ Administrative Trustee By: ______________________________ Name: Title: IBJ SCHRODER BANK & TRUST COMPANY (As Transfer Agent and Registrar) By: ______________________________ Name: Title: RECEIVED AND ACCEPTED: THE DEPOSITORY TRUST COMPANY By__________________________ Authorized Officer B-5 EXHIBIT C THIS CERTIFICATE IS NOT TRANSFERABLE Certificate Number Number of Common Securities: C-1 Certificate Evidencing Common Securities of NVP CAPITAL I ____% Common Securities (liquidation amount $25 per Common Security) NVP Capital I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that Nevada Power Company (the "Holder") is the registered owner of the number set forth above of the common securities of the Trust representing undivided beneficial interests in the assets of the Trust and designated the ___% Common Securities (liquidation amount $25 per Common Security) (the "Common Securities"). In accordance with Section 510 of the Trust Agreement (as defined below) the Common Securities are not transferable and any attempted transfer hereof shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of March 1, 1997 as the same may be amended from time to time (the "Trust Agreement") including the designation of the terms of the Common Securities as set forth therein. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed this certificate this ______ day of ________, ____. NVP CAPITAL I By___________________________ Name: Administrative Trustee C-1 EXHIBIT D AGREEMENT AS TO EXPENSES AND LIABILITIES AGREEMENT dated as of March 1, 1997, between Nevada Power Company, a Nevada corporation ("Nevada Power"), and NVP Capital I, a Delaware business trust (the "Trust"). WHEREAS, the Trust intends to issue and sell its preferred securities (the "Preferred Securities"); NOW, THEREFORE, in consideration of the acceptance of the Preferred Securities by each holder thereof, which acceptance Nevada Power acknowledges shall benefit Nevada Power and which acceptance Nevada Power acknowledges will be made in reliance upon the execution and delivery of this Agreement, Nevada Power and the Trust hereby agree as follows: ARTICLE 1 Section 1.1 ASSUMPTION BY NEVADA POWER. Subject to the terms and conditions hereof, Nevada Power hereby irrevocably and unconditionally assumes and agrees to make the full payment, when and as due, of any and all Obligations (as hereinafter defined) to each person or entity to whom the Trust is now or hereafter becomes indebted or liable (the "Beneficiaries"). As used herein, "Obligations" means any indebtedness, costs, expenses or liabilities of the Trust, other than obligations of the Trust to pay to holders of any Preferred Securities or other similar interests in the Trust the amounts due such holders pursuant to the terms of the Preferred Securities or such other similar interests, as the case may be. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof. Section 1.2 TERM OF AGREEMENT. This Agreement shall terminate and be of no further force and effect upon the date on which there are no Beneficiaries remaining; PROVIDED, HOWEVER, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any Beneficiary must restore payment of any sums paid on account of any Obligation under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute. Section 1.3 WAIVER OF NOTICE. D-1 Nevada Power hereby waives (i) notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and (ii) presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. Section 1.4 NO IMPAIRMENT. The obligations, covenants, agreements and duties of Nevada Power under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the extension of time for the payment by the Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with, the Obligations; (b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or (c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the assets of the Trust. Neither the Trust nor any Beneficiary shall have any obligation to give notice to, or obtain the consent of, Nevada Power with respect to the happening of any of the foregoing. Section 1.5 ENFORCEMENT. A Beneficiary may enforce this Agreement directly against Nevada Power and Nevada Power waives any right or remedy to require that any action be brought against the Trust or any other person or entity before proceeding against Nevada Power. ARTICLE II Section 2.1 BINDING EFFECT. All of the obligations, covenants, duties and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of Nevada Power. Section 2.2 AMENDMENT. D-2 So long as there shall remain any Beneficiary or any Preferred Securities of any series are outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to the holders of the Preferred Securities. Section 2.3 NOTICES. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by mail), telex or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of an answer-back, if sent by telex): NVP Capital I c/o Nevada Power Company 6226 West Sahara Avenue Las Vegas, NV 89102 Facsimile: (702) 367-5684 Attn: Administrative Trustees Nevada Power Company 6226 West Sahara Avenue Las Vegas, NV 89102 Facsimile: (702) 367-5864 Attn: Treasurer Section 2.4 This agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Nevada (without regard to conflict of laws principles). D-3 THIS AGREEMENT is executed as of the day and year first above written. NEVADA POWER COMPANY By: ------------------------------------------ Name: Title: NVP CAPITAL I By: ------------------------------------------ Name: , not in his individual capacity, but solely as Administrative Trustee D-4 EXHIBIT E IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This Preferred Security is a Global Certificate within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of The Depository Trust Company (the "Depository") or a nominee of the Depository. This Preferred Security is exchangeable for Preferred Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Trust Agreement and no transfer of this Preferred Security (other than a transfer of this Preferred Security as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Preferred Security is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York) to NVP Capital I or its agent for registration of transfer, exchange or payment, and any Preferred Security issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. Certificate Number Number of Preferred Securities: __________ P- CUSIP NO. Certificate Evidencing Preferred Securities of NVP Capital I _____% Cumulative Quarterly Income Preferred Securities, Series A (liquidation amount $25 per Preferred Security) NVP Capital I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that ____________________ (the "Holder") is the registered owner of the number set forth above of the preferred securities of the Trust representing an undivided beneficial interest in the assets of the Trust and designated the NVP Capital I ____% Cumulative Quarterly Income Preferred Securities, Series A (liquidation amount $25 per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 504 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities are set forth in, and this certificate and the Preferred Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and E-1 Restated Trust Agreement of the Trust dated as of March 1, 1997, as the same may be amended from time to time (the "Trust Agreement") including the designation of the terms of Preferred Securities as set forth therein. The Holder is entitled to the benefits of the Guarantee Agreement entered into by Nevada Power Company, a Nevada corporation, and IBJ Schroder Bank & Trust Company as guarantee trustee, dated as of March 1, 1997 (the "Guarantee"), to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed this certificate this ___________ day of __________, ____. NVP CAPITAL I By: ______________________________ Name: Administrative Trustee E-2 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security to: __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ (Insert assignee's social security or tax identification number) __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ (Insert address and zip code of assignee) and irrevocably appoints __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date:_____________ Signature:___________________________ (Sign exactly as your name appears on the other side of this Preferred Security Certificate) SIGNATURE(S) GUARANTEED: ___________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. E-3 EX-4.12 7 EXHIBIT 4.12 EXHIBIT 4.12 _____________________________________________________________________________ GUARANTEE AGREEMENT Between NEVADA POWER COMPANY (as Guarantor) and IBJ SCHRODER BANK & TRUST COMPANY (as Guarantee Trustee) dated as of March 1, 1997 ______________________________________________________________________________ TABLE OF CONTENTS ----------------- PAGE ---- ARTICLE I DEFINITIONS SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II TRUST INDENTURE ACT SECTION 201. Trust Indenture Act; Application. . . . . . . . . . . . . . . . 4 SECTION 202. List of Holders . . . . . . . . . . . . . . . . . . . . . . . . 4 SECTION 203. Reports by the Guarantee Trustee. . . . . . . . . . . . . . . . 5 SECTION 204. Periodic Reports to Guarantee Trustee . . . . . . . . . . . . . 5 SECTION 205. Evidence of Compliance with Conditions Precedent. . . . . . . . 5 SECTION 206. Events of Default; Waiver . . . . . . . . . . . . . . . . . . . 5 Section 207. Event of Default; Notice. . . . . . . . . . . . . . . . . . . . 5 SECTION 208. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE III POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE SECTION 301. Powers and Duties of the Guarantee Trustee. . . . . . . . . . . 6 SECTION 302. Certain Rights of Guarantee Trustee. . . . . . . . . . . . . 8 SECTION 303. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 ARTICLE IV GUARANTEE TRUSTEE SECTION 401. Guarantee Trustee; Eligibility. . . . . . . . . . . . . . . . . 9 SECTION 402. Appointment, Removal and Resignation of the Guarantee Trustee .10 ARTICLE V GUARANTEE SECTION 501. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . .11 SECTION 502. Waiver of Notice and Demand . . . . . . . . . . . . . . . . . .11 SECTION 503. Obligations Not Affected. . . . . . . . . . . . . . . . . . . .11 -i- TABLE OF CONTENTS ----------------- (continued) PAGE ---- SECTION 504. Rights of Holders . . . . . . . . . . . . . . . . . . . . . . .12 SECTION 505. Guarantee of Payment. . . . . . . . . . . . . . . . . . . . . .12 SECTION 506. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . .12 ARTICLE VI COVENANTS AND SUBORDINATION SECTION 601. Subordination. . . . . . . . . . . . . . . . . . . . . . . . . .13 SECTION 602. Pari Passu Guarantees. . . . . . . . . . . . . . . . . . . . . .13 ARTICLE VII TERMINATION SECTION 701. Termination . . . . . . . . . . . . . . . . . . . . . . . . . .13 ARTICLE VIII MISCELLANEOUS SECTION 801. Successors and Assigns. . . . . . . . . . . . . . . . . . . . .14 SECTION 802. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .14 SECTION 803. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 SECTION 804. Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 SECTION 805. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . .15 SECTION 806. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .16 -ii- CROSS-REFERENCE TABLE* Section of Section of Trust Indenture Act Guarantee of 1939, as amended Agreement - --------------------- --------- 310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .401(a) 310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .401(c), 208 310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .Inapplicable 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .202(b) 311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .202(b) 311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .Inapplicable 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .202(a) 312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .202(b) 313. . . . . . . . . . . . . . . . . . . . . . . . . . . . .203 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .204 314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .Inapplicable 314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .205 314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . .Inapplicable 314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . .101,205, 302 314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . .201, 302 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .301(d) 315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .207 315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .301 315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . .301(d) 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .101,206, 504 316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .503 316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .802 317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .Inapplicable 317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .Inapplicable 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .201(b) 318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .201 318(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .201(a) - -------------------- * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. GUARANTEE AGREEMENT This GUARANTEE AGREEMENT, dated as of March 1, 1997, is executed and delivered by Nevada Power Company, a Nevada corporation (the "Guarantor"), and IBJ Schroder Bank & Trust Company, a banking corporation organized under the laws of New York, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of NVP Capital I, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of March 1, 1997 among the Trustees named therein and Nevada Power Company, as Depositor, the Issuer is issuing ______________ of its ____% Cumulative Quarterly Income Preferred Securities, Series A (liquidation preference $25 per preferred security) (the "Preferred Securities") representing preferred undivided beneficial ownership interests in the Issuer and having the terms set forth in the Trust Agreement; WHEREAS, the Preferred Securities will be sold by or on behalf of the Issuer and the proceeds thereof, together with the proceeds from the issuance of the Issuer's Common Securities (as defined below), will be used to purchase the Debentures (as defined in the Trust Agreement) of the Guarantor which will be deposited with Delaware Trust Capital Management, Inc., as Property Trustee under the Trust Agreement, as trust assets; and WHEREAS, in order to enhance the value of the Preferred Securities the Guarantor desires to irrevocably and unconditionally agree, to the extent set forth herein, to pay to the Holders (as defined herein) the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the purchase of Debentures, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the benefit of the Holders from time to time. ARTICLE I DEFINITIONS SECTION 101. DEFINITIONS. As used in this Guarantee Agreement, the terms set forth below shall, unless the context otherwise requires, have the following meanings. Capitalized or otherwise defined terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect on the date hereof. "Affiliate" of any specified Person means any other Person directly or indirectly -1- controlling or controlled by or under direct or indirect common control with such specified Person, PROVIDED, HOWEVER, that an Affiliate of the Guarantor shall not be deemed to include the Issuer. For the purposes of this definition, "CONTROL" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing. "Common Securities" means the securities representing common undivided beneficial interests in the assets of the Issuer. "Debt" means, with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent, (i) every obligation of such Person for money borrowed; (ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; (iii) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (iv) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business); (v), every capital lease obligation of such Person; and (vi) every obligation of the type referred to in clauses (i) through (v) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable, directly or indirectly, as obligor or otherwise. "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Guarantee Agreement; PROVIDED, however, that, except with respect to a default in payment of any Guarantee Payments, the Guarantor shall have received notice of default and shall not have cured such default within 60 days after receipt of such notice. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions that are required to be paid on the Preferred Securities, if and to the extent the Property Trustee has available at such time in the Payment Account funds sufficient to make such payment, (ii) the Redemption Price with respect to the Preferred Securities called for redemption by the Issuer but only to the extent the Property Trustee has available, when due, in the Payment Account funds sufficient to make such payment, and (iii) upon a voluntary or involuntary termination, winding-up or dissolution of the Issuer (unless Debentures are distributed to the Holders, the lesser of (a) the aggregate of the Liquidation Amount and all accrued and unpaid Distributions on the Preferred Securities to the date of payment but only to the extent the Property Trustee has available in the Payment Account funds sufficient to make such payment and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer (in either case, the "Liquidation Distribution"). "Guarantee Trustee" means IBJ Schroder Bank & Trust Company, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Guarantee Trustee. -2- "Holder" means any holder, as registered on the books and records of the Issuer, of any Preferred Securities then outstanding; PROVIDED, HOWEVER, that in determining whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Indenture" means the Junior Subordinated Indenture dated as of March 1, 1997, as supplemented and amended, between the Guarantor and IBJ Schroder Bank & Trust Company, as trustee, pursuant to which the Debentures are issued. "List of Holders" has the meaning specified in Section 202 (a) . "Majority in liquidation preference of the Securities" means, except as provided by the Trust Indenture Act, a vote by the Holder(s), voting separately as a class, of more than 50% of the liquidation preference of all then outstanding Preferred Securities. "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chairman of the Board and Chief Executive Officer, President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate delivered to the Guarantee Trustee with respect to compliance with a condition precedent or a covenant provided for in this Guarantee Agreement shall include: (1) a statement that the persons making such certificate or opinion has read such condition or covenant; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such persons, such condition or covenant has been complied with. "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company or corporation, trust, unincorporated organization, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Responsible Officer" means, with respect to the Guarantee Trustee, any Senior Vice President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of the Corporate Trust Department of the Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Senior Debt" means the principal of and premium, if any and interest, if any (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Guarantor whether or not such claim for post-petition interest is allowed in such proceeding), on Debt, whether incurred on or prior to the date of this Guarantee or thereafter incurred, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are not superior in right of payment to the Guarantee or to other Debt which is pari passu with, or subordinated to, the Guarantee; PROVIDED, however, that Senior Debt shall not be deemed to include (a) any Debt of the Guarantor which when incurred and without respect to any election under Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the Guarantor, (b) any Debt of the Guarantor to any of its Subsidiaries, (c) Debt to any employee of the Guarantor, (d) any liability for taxes, (e) Debt or other monetary obligations to trade creditors created or assumed by the Guarantor or any of its Subsidiaries in the ordinary course of business in -3- connection with the obtaining of goods, materials or services and (f) Debt issued under the Indenture. "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 401. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended. ARTICLE II TRUST INDENTURE ACT SECTION 201. TRUST INDENTURE ACT; APPLICATION. (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by such provisions. (b) If and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 202. LIST OF HOLDERS. (a) The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (a) semiannually, on or before January 15 and July 15 of each year, a list, in such form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders ("List of Holders") as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as the Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished, in each case to the extent such information is in the possession or control of the Guarantor and is not identical to a previously supplied list of Holders or has not otherwise been received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Guarantee Trustee shall comply with its obligations under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act. SECTION 203. REPORTS BY THE GUARANTEE TRUSTEE. Not later than February 15 of each year, commencing February 15, 1998, the Guarantee Trustee shall provide to the Holders such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture -4- Act. SECTION 204. PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange Commission and the Holders such documents, reports and information, if any, as required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. SECTION 205. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with such conditions precedent, if any, provided for in this Guarantee Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate. SECTION 206. EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in liquidation preference of the Preferred Securities may, on behalf of the Holders, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent therefrom. Section 207. EVENT OF DEFAULT; NOTICE. (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders, notices of all Events of Default known (as set forth in Section 2.07(b)) to the Guarantee Trustee, unless such defaults have been cured before the giving of such notice, provided, that, except in the case of a default in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected in withholding such notice if and so long as the Board of Directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless either (i) a Responsible Officer of the Guarantee Trustee shall have actual knowledge, or (2) a Responsible Officer charged with the administration of the Trust Agreement shall have obtained written notice, of such Event of Default. SECTION 208. CONFLICTING INTERESTS. The Trust Agreement shall be deemed to be specifically described in this Guarantee -5- Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE III POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE SECTION 301. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not transfer this Guarantee Agreement to any Person except a Holder exercising his or her rights pursuant to Section 504(iv) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment hereunder, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. (b) If an Event of Default has occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the Holders. (c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this Guarantee Agreement against the Guarantee Trustee. In case an Event of Default known (as set forth in Section 207(b)) to the Guarantee Trustee has occurred (that has not been cured or waived pursuant to Section 206), the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement; and (B) in the absence of bad faith on the part of the Guarantee Trustee, -6- the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee Agreement; (ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in liquidation preference of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) no provision of this Guarantee Agreement shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee Agreement or adequate indemnity against such risk or liability is not reasonably assured to it. SECTION 302. CERTAIN RIGHTS OF GUARANTEE TRUSTEE. (a) Subject to the provisions of Section 301: (i) The Guarantee Trustee may rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, Officers' Certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. (ii) Any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate unless otherwise prescribed herein. (iii) Whenever, in the administration of this Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved or established before -7- taking, suffering or omitting to take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request from the Guarantee Trustee, shall be promptly delivered by the Guarantor. (iv) The Guarantee Trustee may consult with legal counsel, and the written advice or opinion of such legal counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or opinion. Such legal counsel may be legal counsel to the Guarantor or any of its Affiliates and may be one of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction. (v) The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee such adequate security and indemnity as would satisfy a reasonable person in the position of the Guarantee Trustee, against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided that, nothing contained in this Section 302(a)(v) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement. (vi) The Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. (vii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder. (viii) Whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders, (B) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (C) shall be protected in acting in accordance with such instructions. -8- (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty to act in accordance with such power and authority. SECTION 303. INDEMNITY. The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Guarantee Trustee will not claim or exact any lien or charge on any Guarantee Payments as a result of any amount due to it under this Guarantee Agreement. ARTICLE IV GUARANTEE TRUSTEE SECTION 401. GUARANTEE TRUSTEE; ELIGIBILITY. (a) There shall at all times be a Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000, and shall be a corporation meeting the requirements of Section 310(c) of the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority, then, for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 401(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 402(c). (c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. -9- SECTION 402. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE TRUSTEE. (a) Subject to Section 402(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor and the Guarantee Trustee. (c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 402 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. ARTICLE V GUARANTEE SECTION 501. GUARANTEE. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or assert other than the defense of payment. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. SECTION 502. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives notice of acceptance of the Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Guarantee Trustee, Issuer or any other Person before proceeding against -10- the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 503. OBLIGATIONS NOT AFFECTED. The obligations, covenants, agreements and duties of the Guarantor under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions (other than an extension of time for payment of Distributions that results from the extension of any interest payment period on the Debentures as so provided in the Indenture), Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities; (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Preferred Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the Preferred Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 503 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. There shall be no obligation of the Holders or the Guarantee Trustee to give notice to, or obtain the consent of, the Guarantor with respect to the happening of any of the foregoing. SECTION 504. RIGHTS OF HOLDERS. -11- The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in liquidation preference of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) any Holder may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against the Guarantee Trustee, the Issuer or any other Person. SECTION 505. GUARANTEE OF PAYMENT. This Guarantee Agreement creates a guarantee of payment and not of collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts theretofore paid by the Issuer) or upon distribution of Debentures to Holders as provided in the Trust Agreement. SECTION 506. SUBROGATION. The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement and shall have the right to waive payment by the Issuer pursuant to Section 501; provided, HOWEVER, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Guarantee Agreement. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. SECTION 507. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 503 hereof. ARTICLE VI COVENANTS AND SUBORDINATION SECTION 601. SUBORDINATION. This Guarantee Agreement will constitute an unsecured obligation of the Guarantor and will rank subordinate and junior in right of' payment to all Senior Debt of the Guarantor. -12- SECTION 602. PARI PASSU GUARANTEES. This Guarantee Agreement shall rank pari passu with any similar Guarantee Agreements issued by the Guarantor on behalf of the holders of Preferred Securities issued by NVP Capital II. ARTICLE VII TERMINATION SECTION 701. TERMINATION. This Guarantee Agreement shall terminate and be of no further force and effect upon (i) full payment of the Redemption Price of all Preferred Securities, (ii) the distribution of Debentures to the Holders in exchange for all of the Preferred Securities or (iii) full payment of the amounts payable in accordance with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid with respect to Preferred Securities or this Guarantee Agreement. ARTICLE VIII MISCELLANEOUS SECTION 801. SUCCESSORS AND ASSIGNS. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Preferred Securities then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Article Eight of the Indenture and pursuant to which the assignee agrees in writing to perform the Guarantor's obligations hereunder, the Guarantor shall not assign its obligations hereunder. SECTION 802. AMENDMENTS. Except with respect to any changes which do not adversely affect the rights of the Holders in any material respect (in which case no consent of the Holders will be required), this Guarantee Agreement may only be amended with the prior approval of the Holders of a Majority in liquidation preference of the Securities. The provisions of Article VI of the Trust Agreement concerning meetings of the Holders shall apply to the giving of such approval. SECTION 803. NOTICES. Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or mailed by first class mail as follows: -13- (a) if given to the Guarantor, to the address set forth below or such other address, facsimile number or to the attention of such other Person as the Guarantor may give notice of to the Holders: Nevada Power Company 6226 West Sahara Avenue Las Vegas, Nevada 89102 Facsimile No.: (702) 367-5864 Attention: Treasurer with a copy to: Nevada Power Company 6226 West Sahara Avenue Las Vegas, Nevada 89102 Facsimile No.: (702) 367-5629 Attention: General Counsel (b) if given to the Issuer, in care of the Guarantee Trustee, at the Issuer's (and the Guarantee Trustee's) address set forth below or such other address, facsimile number or to the attention of such other Person as the Guarantee Trustee on behalf of the Issuer may give notice to the Holders: NVP Capital I c/o Nevada Power Company 6226 West Sahara Avenue Las Vegas, Nevada 89102 Facsimile No: (702) 367-5864 Attention: Treasurer with a copy to: IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 Facsimile No.: (212) 858-2952 Attention: Corporate Trust Department (c) if given to any Holder, at the address set forth on the books and records of the Issuer. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. -14- SECTION 804. BENEFIT. This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Preferred Securities. SECTION 805. INTERPRETATION. In this Guarantee Agreement, unless the context otherwise requires: (a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto have the respective meanings assigned to them in Section 101; (b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout; (c) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented or amended from time to time; (d) all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement unless otherwise specified; (e) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise requires; (f) a reference to the singular includes the plural and vice versa; and (g) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders. SECTION 806. GOVERNING LAW. This Guarantee Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York without regard to the conflict of law principles thereof. -15- This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. NEVADA POWER COMPANY By: ___________________________________________ Name: Title: IBJ SCHRODER BANK & TRUST COMPANY, as Guarantee Trustee By: ___________________________________________ Name: Title: -16- EX-4.13 8 SUPPLEMENTAL INDENTURE NO. 1 - ------------------------------------------------------------------------------ NEVADA POWER COMPANY to IBJ SCHRODER BANK & TRUST COMPANY, as Trustee SUPPLEMENTAL INDENTURE NO. 1 Dated as of March 1, 1997 $_______________ ___________% Junior Subordinated Deferrable Interest Debentures Series A - ------------------------------------------------------------------------------ NEVADA POWER COMPANY $____________ _____% Junior Subordinated Deferrable Interest Debentures Series A SUPPLEMENTAL INDENTURE NO. 1 SUPPLEMENTAL INDENTURE No. 1, dated as of ________ __, 1997, between Nevada Power Company, a Nevada corporation (the "Company"), and IBJ Schroder Bank & Trust Company, a New York banking corporation, as Trustee (the "Trustee"). RECITALS The Company has heretofore executed and delivered to the Trustee a Junior Subordinated Indenture, dated as of March 1, 1997 (the "Indenture"), providing for the issuance from time to time of series of the Company's Securities. Section 301 of the Indenture provides for various matters with respect to any series of Securities issued under the Indenture to be established in an indenture supplemental to the Indenture. Section 901(3) of the Indenture provides for the Company and the Trustee to enter into an indenture supplemental to the Indenture to establish the form or terms of Securities of any series as provided by Sections 201 and 301 of the Indenture. For and in consideration of the premises and the issuance of the series of Securities provided for herein, it is mutually covenanted and agreed, for the equal and proportionate benefit of the Holders of the Securities of such series, as follows: ARTICLE 1 RELATION TO INDENTURE; DEFINITIONS Section 1.1. This Supplemental Indenture No. 1 constitutes an integral part of the Indenture. Section 1.2. For all purposes of this Supplemental Indenture No. 1: (1) Capitalized terms used herein without definition shall have the meanings specified in the Indenture or in the Amended and Restated Trust Agreement, dated as of March 1, 1997, among the Company, as Depositor, IBJ Schroder Bank & Trust Company, as Property Trustee, Delaware Trust Capital Management, Inc., as Delaware Trustee, and the Administrative Trustees named therein, as the case may be; -1- (2) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Supplemental Indenture No. 1; and (3) The terms "herein", "hereof", "hereunder" and other words of similar import refer to this Supplemental Indenture No. 1. ARTICLE 2 THE SERIES OF SECURITIES Section 2.1. Title of the Securities. There shall be a series of Securities designated the "____% Junior Subordinated Deferrable Interest Debentures, Series A" (the "Securities"). Section 2.2. Limitation on Aggregate Principal Amount; Date of Securities. The aggregate principal amount of the Securities shall be limited to $___________. Each Security shall be dated the date of its authentication. Section 2.3. Principal Payment Date. The principal amount of the Securities Outstanding (together with any accrued and unpaid interest (including any Additional Interest) thereon) shall be payable in a single installment on ________ __, 2037; provided, that the Company may (i) change the Maturity Date upon the occurrence of an exchange of the Securities for the Preferred Securities subject to certain conditions set forth in Section 314 of the Indenture, which changed Maturity Date shall in no case be earlier than ______ __, 2002 or later than _______ __, 2046 and (ii) extend the Maturity Date subject to certain conditions specified in Section 314 of the Indenture, which extended Maturity Date shall in no case be later than _______ __, 2046. Section 2.4. Interest and Interest Rates. The rate of interest on each Security shall be ____% per annum, accruing from ________ __, 1997 and, subject to Section 2.5, interest shall be payable, quarterly in arrears, on March 31, June 30, September 30 and December 31 of each year (each such date, an "Interest Payment Date"), commencing ________, 1997. The rate of any Additional Interest that shall accrue on each Security shall be at the same rate per annum. The amount of interest payable for any period shall be computed on the basis of a 360-day year of twelve 30-day months. For any period of less than a full month, interest payable shall reflect interest on the Securities computed on the basis of the actual number of elapsed days based ona 360-day year. In the event that any date on which interest is payable on a Security is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Security (or one or more Predecessor Securities) is registered in the Securities Register at the close of business on the Regular Record Date for such interest installment, which, if such Security is a Global Security issued to the Depositary, shall be the close of business on the Business Day next preceding such Interest Payment Date. The interest so payable on any Security which is not -2- punctually paid or duly provided for on any Interest Payment Date shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name such Security (or one or more Predecessor Securities) is registered in the Securities Register at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 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, the Nasdaq National Market or other applicable interdealer quotation system or self-regulatory organization on which the Securities may be listed, and upon such notice as may be required by such exchange or other self-regulatory organization, all as more fully provided in the Indenture. Section 2.5. Extension of Interest Payment Period. (a) So long as no Event of Default shall have occurred and be continuing, the Company shall have the right, at any time during the term of the Securities, from time to time, to defer the payment of interest on the Securities for up to 20 consecutive quarters with respect to each deferred period (each, an "Extension Period"), during which Extension Periods the Company shall have the right to make payments of interest on any Interest Payment Date. No Extension Period shall end on a date other than an Interest Payment Date (and any interest so deferred shall be payable to the Holders on the Regular Record Date to the Interest Payment Date which ends the Extension Period). At the end of any such Extension Period the Company shall pay all interest then accrued and unpaid on the Securities (together with Additional Interest thereon, if any, at the annual rate of ____%, compounded quarterly, to the extent permitted by applicable law), provided, that during any such Extension Period, the Company will not, and will cause all Subsidiaries not to (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks PARI PASSU with or junior in right of payment to the Securities or make any guarantee payments with respect to indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to the Securities (other than (a) dividends or distributions in Common Stock of the Company, (b) redemptions or purchases of any rights pursuant to the Company's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Nevada Power Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under the Company's Stock Purchase and Dividend Reinvestment Plan and any of the Company's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by the Company or any of its Subsidiaries). Prior to the termination of any such Extension Period, the Company may further extend the interest payment period. Notwithstanding any provision of this Supplemental Indenture No. 1 or the Indenture to the contrary, no Extension Period shall exceed 20 consecutive quarters or extend beyond the Maturity Date of the Securities. Upon termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may elect to begin a new Extension Period, subject to the requirements hereof. No interest shall be due and payable during an Extension Period, except at the end thereof. The Company shall give the Holders of the Securities and the Property Trustee, the Administrative Trustees and the Trustee written notice of its election to begin or continue any such Extension Period at least one Business Day prior to the earlier of (i) the date -3- the Distributions on the Preferred Securities would have been payable except for the election to begin or continue such Extension Period or (ii) the date the Administrative Trustees are required to give notice to any securities exchange, the Nasdaq National Market or other applicable interdealer quotation system or self-regulatory organization or to holders of such Preferred Securities of the record date or the date such Distributions are payable, but in any event not less than one Business Day prior to such record date. The Trustee shall promptly give notice of the Company's election to begin or continue any such Extension Period to the holders of the outstanding Preferred Securities and pursuant to Section 802 of the Trust Agreement, to the Administrative Trustees thereunder. Section 2.6. Place of Payment. The Place of Payment where the Securities may be presented or surrendered for payment, where the Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and the Indenture may be served shall be the Corporate Trust Office of the Trustee. Section 2.7. Redemption. At any time on or after ________ __, 2002, the Company may, at its option, subject to the terms and conditions of Article Eleven of the Indenture, redeem the Securities in whole at any time or in part from time to time, without premium or penalty, at a redemption price equal to 100% of the principal amount thereof plus the accrued and unpaid interest, including Additional Interest, if any, to the date fixed for redemption. If a Special Event in respect of NVP Capital I shall occur and be continuing, the Company may, at its option, redeem the Securities within 90 days of the occurrence of such Special Event, in whole but not in part, subject to the provisions of Article Eleven of the Indenture. The redemption price for any Security so redeemed shall be equal to 100% of the principal amount thereof plus accrued and unpaid interest, including Additional Interest, if any, to the date fixed for redemption. Section 2.8. Exchange. At any time, the Company may terminate NVP Capital I and cause the Securities to be distributed to Holders of the Trust Securities in liquidation of NVP Capital I. Section 2.9. Denomination. The Securities shall be in registered form without coupons and shall be issuable in denominations of $25 and integral multiples thereof. Section 2.10. Currency. Principal and interest on the Securities shall be payable in Dollars. Section 2.11. Form of Securities. The Securities shall be substantially in the form attached as Exhibit A hereto. Section 2.12. Securities Registrar and Paying Agent. The Trustee shall initially serve as Securities Registrar and Paying Agent. -4- Section 2.13. Sinking Fund Obligations. The Company has no obligation to redeem or purchase any Securities pursuant to any sinking fund or analogous requirement or upon the happening of a specified event or at the option of a Holder thereof. ARTICLE 3 MISCELLANEOUS PROVISIONS Section 3.1. The Indenture, as supplemented and amended by this Supplemental Indenture No. 1, is in all respects hereby adopted, ratified and confirmed. Section 3.2. This Supplemental Indenture No. 1 may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. Section 3.3. THIS SUPPLEMENTAL INDENTURE NO. 1 AND EACH SECURITY SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 1 to be duly executed, as of the day and year first written above. NEVADA POWER COMPANY By: ___________________________________ Name: Title: Attest: _______________________ IBJ SCHRODER BANK & TRUST COMPANY, as Trustee By: ___________________________________ Name: Title: -5- EXHIBIT A [FORM OF FACE OF SECURITY] IF THE SECURITY IS TO BE A GLOBAL SECURITY - This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of The Depository Trust Company (the "Depository") or a nominee of the Depository. This Security is exchangeable for Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Indenture and no transfer of this Security (other than a transfer of this Security as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Security is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York) to Nevada Power Company or its agent for registration of transfer, exchange or payment, and any Security issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. NEVADA POWER COMPANY ____% Junior Subordinated Deferrable Interest Debentures Series A No. __________ $_____________ CUSIP ________ NEVADA POWER COMPANY, a corporation organized and existing under the laws of Nevada (hereinafter called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to _______________, or registered assigns, the principal sum of __________________ Dollars on ________ __, 2037; provided, that the Company may (i) change the maturity date upon the occurrence of an exchange of the Securities for the Trust Securities subject to certain conditions set forth in Section 314 of the Indenture, which changed maturity date shall in no case be earlier than ______ __, 2002 or later than _______ __, 2046 and (ii) extend the maturity date subject to certain conditions specified in Section 314 of the Indenture, which extended maturity date shall in no case be later than _______ __, 2046. The Company further promises to pay interest on said principal sum from ________ __, 1997 or from the most recent interest payment date (each such date, an "Interest Payment Date") on which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on March 31, June 30, September 30 and December 31 of each year, commencing _________, 1997, at the rate of ____% per annum, until the principal hereof shall have become due and payable, plus Additional Interest, if any, until the principal hereof is paid or duly provided for or made available for payment and on any overdue principal and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue A-1 installment of interest at the rate of ____% per annum, compounded quarterly. The amount of interest payable for any period will be computed on the basis of twelve 30-day months and a 360-day year. For any period of less than a full month, interest payable shall reflect interest on the Securities computed on the basis of the actual number of elapsed days based on a 360-day year. In the event that any date on which interest is payable on this Security is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. A "Business Day" shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office of the Trustee or the principal office of the Property Trustee under the Trust Agreement hereinafter referred to for NVP Capital I, is closed for business. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities, as defined in the Indenture) is registered at the close of business on the Regular Record Date for such interest installment, which shall be the close of business on the Business Day next preceding such Interest Payment Date. Any such interest installment not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 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, the Nasdaq National Market or other applicable interdealer quotation system or self-regulatory organization on which the Securities of this series may be listed or traded, and upon such notice as may be required by such exchange or other self-regulatory organization, all as more fully provided in said Indenture. So long as no Event of Default under the Indenture shall have occurred and be continuing, the Company shall have the right at any time during the term of this Security, from time to time, to defer the payment of interest on such Security for up to 20 consecutive quarters with respect to each deferral period (each an "Extension Period"), during which Extension Periods the Company shall have the right to make payments of interest on any Interest Payment Date. No Extension Period shall end on a date other than Interest Payment Date (and any interest so deferred shall be payable to the Holders on the Regular Record Date to the Interest Payment Date which ends the Extension Period). And at the end of such Extension Period, the Company shall pay all interest then accrued and unpaid (together with Additional Interest thereon to the extent permitted by applicable law); provided that during any such Extension Period, the Company will not, and will cause all Subsidiaries not to (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock or (ii) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem, or make any sinking fund payment with respect to, any indebtedness that ranks PARI PASSU with or junior in right of payment to this Security or make any guarantee payments with respect to any indebtedness if such guarantee ranks PARI PASSU with or junior in right of payment to this Security A-2 (other than (a) dividends or distributions in Common Stock of the Company, (b) redemptions or purchases of any rights pursuant to the Company's Stock Purchase Rights Plan, or any successor to such Stock Purchase Rights Plan, and the declaration of a dividend of such rights or the issuance of Preferred Stock under such plans in the future, (c) payments under any Nevada Power Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock under the Company's Stock Purchase and Dividend Reinvestment Plan and any of the Company's benefit plans for its directors, officers or employees and (e) purchases of Common Stock required to prevent the loss or secure the renewal or reinstatement of any government license or franchise held by the Company or any of its Subsidiaries). Prior to the termination of any such Extension Period, the Company may further extend the interest payment period. Notwithstanding any provision herein or in the Indenture to the contrary, no Extension Period shall exceed 20 consecutive quarters or extend beyond the Maturity Date of this Security. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may elect to begin a new Extension Period, subject to the requirements hereof. No interest shall be due and payable during an Extension Period except at the end thereof. The Company shall give the Holder of this Security and the Trustee written notice of its election to begin or continue an Extension Period at least one Business Day prior to the earlier of (i) the date the Distributions on the Preferred Securities would have been payable except for the election to begin or continue such Extension Period or (ii) the date the Administrative Trustees are required to give notice to any securities exchange, the Nasdaq National Market or other applicable interdealer quotation system or self-regulatory organization or to holders of such Preferred Securities of the record date or the date such Distributions are payable, but in any event not less than one Business Day prior to such record date. Payment of the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Company maintained for that purpose in the United States, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Securities Register or (ii) by wire transfer in immediately available funds at such place and to such account as may be designated by the Person entitled thereto as specified in the Securities Register. The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payments to the prior payment in full of all Senior Debt, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. A-3 Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: NEVADA POWER COMPANY By:____________________________________ [President or Vice President] Attest: ____________________________________ [Secretary or Assistant Secretary] This is one of the Securities referred to in the within mentioned Indenture. IBJ SCHRODER BANK & TRUST COMPANY, as Trustee By:______________________________ Authorized Officer [FORM OF REVERSE OF SECURITY] This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under a Junior Subordinated Indenture, dated as of March 1, 1997, as amended (herein called the "Indenture"), between the Company and IBJ Schroder Bank & Trust Company, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, limited in aggregate principal amount to $___________. A-4 All terms used in this Security that are defined in the Indenture or in the Amended and Restated Trust Agreement, dated as of March 1, 1997 (the "Trust Agreement"), for NVP Capital I among Nevada Power Company, as Depositor, and the Trustees and the other trustees named therein, shall have the meanings assigned to them in the Indenture or the Trust Agreement, as the case may be. On or after ________ __, 2002, the Company may at any time, at its option, subject to the terms and conditions of Article Eleven of the Indenture, redeem this Security in whole at any time or in part from time to time, without premium or penalty, at a redemption price equal to 100% of the principal amount thereof plus the accrued and unpaid interest, including Additional Interest, if any, to the date fixed for redemption. If a Special Event in respect of NVP Capital I shall occur and be continuing, the Company may, at its option, redeem this Security within 90 days of the occurrence of such Special Event, in whole but not in part, subject to the provisions of Section 1107 and the other provisions of Article Eleven of the Indenture. The redemption price for any Security so redeemed shall be equal to 100% of the principal amount thereof plus accrued and unpaid interest, including Additional Interest, if any, to the date fixed for redemption. In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions for satisfaction, discharge and defeasance at any time of the entire indebtedness of this Security upon compliance by the Company with certain conditions set forth in the Indenture. The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee at any time to enter into a supplemental indenture or indentures for the purpose of modifying in any manner the rights and obligations of the Company and of the Holders of the Securities, with the consent of the Holders of a majority in principal amount of the Outstanding Securities of each series to be affected by such supplemental indenture. The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. A-5 As provided in and subject to the provisions of the Indenture, if an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all the Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), provided that, in the case of the Securities of a series issued to an NVP Trust, if upon an Event of Default, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series fail to declare the principal of all the Securities of that series to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the corresponding series of Preferred Securities then outstanding shall have such right by a notice in writing to the Company and the Trustee; and upon any such declaration such principal amount (or specified amount) of and the accrued interest (including any Additional Interest) on all the Securities of such series shall become immediately due and payable, provided that the payment of principal and interest (including any Additional Interest) on such Securities shall remain subordinated to the extent provided in Article Thirteen of the Indenture. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained under Section 1002 of the Indenture duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Securities of this series are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of such series of a different authorized denomination, as requested by the Holder surrendering the same. A-6 The Company and, by its acceptance of this Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, this Security agree that for United States federal, state and local tax purposes it is intended that this Security constitute indebtedness. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. A-7 EX-4.14 9 EXHIBIT 4.14 AGREEMENT AS TO EXPENSES AND LIABILITIES AGREEMENT dated as of March 1, 1997, between Nevada Power Company, a Nevada corporation ("Nevada Power"), and NVP Capital I, a Delaware business trust (the "Trust"). WHEREAS, the Trust intends to issue and sell its preferred securities: NOW, THEREFORE, in consideration of the acceptance of the Preferred Securities by each holder thereof, which acceptance Nevada Power acknowledges shall benefit Nevada Power and which acceptance Nevada Power acknowledges will be made in reliance upon the execution and delivery of this Agreement, Nevada Power and the Trust hereby agree as follows: ARTICLE I Section 1.1 ASSUMPTION BY NEVADA POWER. Subject to the terms and conditions hereof, Nevada Power hereby irrevocably and unconditionally assumes the full payment, when and as due, of any and all Obligations (as hereinafter defined) to each person or entity to whom the Trust is now or hereafter becomes indebted or liable (the "Beneficiaries"). As used herein, "Obligations" means any indebtedness, costs, expenses or liabilities of the Trust, other than obligations of the Trust to pay to holders of any Preferred Securities or other similar interests in the Trust the amounts due such holders pursuant to the terms of the Preferred Securities or such other similar interests, as the case may be. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof. Section 1.2 TERM OF AGREEMENT. This Agreement shall terminate and be of no further force and effect upon the date on which there are no Beneficiaries remaining; PROVIDED, HOWEVER, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any Beneficiary must restore payment of any sums paid on account of any Obligation under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute. Section 1.3 WAIVER OF NOTICE. Nevada Power hereby waives (i) notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and (ii) presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. Section 1.4 NO IMPAIRMENT. The obligations, covenants, agreements and duties of Nevada Power under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the extension of time for the payment by the Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with the Obligations; (b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or (c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the assets of the Trust. Neither the Trust nor any Beneficiary shall have any obligation to give notice to, or obtain the consent of, Nevada Power with respect to the happening of any of the foregoing. Section 1.5 ENFORCEMENT. A Beneficiary may enforce this Agreement directly against Nevada Power and Nevada Power waives any right or remedy to require that any action be brought against the Trust or any other person or entity before proceeding against Nevada Power. -2- ARTICLE II Section 2.1 BINDING EFFECT. All of the obligations, covenants, duties and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of Nevada Power. Section 2.2 AMENDMENT. So long as there shall remain any Beneficiary or any Preferred Securities of any series are outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to the holders of the Preferred Securities. Section 2.3 NOTICES. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by mail), telex or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of an answer-back, if sent by telex): NVP Capital I c/o Nevada Power Company 6226 West Sahara Avenue Las Vegas, NV 89102 Facsimile: (702) 367-5684 Attn: Administrative Trustee Nevada Power Company 6226 West Sahara Avenue Las Vegas, NV 89102 Facsimile: (702) 367-5684 Attn: Treasurer Section 2.4 This agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York (without regard to conflict of laws principles). -3- THIS AGREEMENT is executed as of the day and year first above written. NEVADA POWER COMPANY By: ------------------------------------- Name: Title: NVP CAPITAL I By: ------------------------------------- Name: ,not in his individual capacity, but solely as Administrative Trustee -4- EX-25.01 10 EXHIBIT 25.01 ------------------------------------ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- IBJ SCHRODER BANK & TRUST COMPANY (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) New York 13-5375195 (State of Incorporation (I.R.S. Employer if not a U.S. national bank) Identification No.) One State Street, New York, New York 10004 (Address of principal executive offices) (Zip code) Alfred Bonanno, Assistant Vice President IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 (212) 858-2000 NEVADA POWER COMPANY (Exact name of obligor as specified in its charter) Nevada 88-0045330 (State of jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6226 West Sahara Avenue 89151 Las Vegas, Nevada (Zip code) (Address of principal executive office) % JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES SERIES A --- (Title of Securities) ------------------------------- Item 1. General information Furnish the following information as to the trustee: (a) Name and address of examining or supervising authority to which it is subject. New York State Banking Department Two Rector Street New York, New York Federal Deposit Insurance Corporation Washington, D.C. Federal Reserve Bank of New York Second District 33 Liberty Street New York, New York (b) Whether it is authorized to exercise corporate trust powers. Yes Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. The obligor is not an affiliate of the trustee. Item 3. Voting securities of the trustee. Furnish the following information as to each class of voting securities of the trustee: As of March 6, 1997 Col. A Col. B Title of class Amount Outstanding 2 Item 4. Trusteeships under other indentures. If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, furnish the following information: (a) Title of the securities outstanding under each such other indenture Not Applicable (b) A brief statement of the facts relied upon as a basis for the claim that no conflicting interest within the meaning of Section 310 (b)(1) of the Act arises as a result of the trusteeship under any such other Indenture, including a statement as to how the indenture securities will rank as compared with the securities issued under such other indenture. Item 5. Interlocking directorates and similar relationships with the obligor or underwriters. If the trustee or any of the directors or executive officers of the trustee is a director, officer, partner, employee, appointee, or representative of the obligor or of any underwriter for the obligor, identify each such person having any such connection and state the nature of each such connection. Not Applicable Item 6. Voting securities of the trustee owned by the obligor or its officials. Furnish the following information as to the voting securities of the trustee owned beneficially by the obligor and each director, partner, and executive officer of the obligor: As of March 6, 1997 Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially securities represented by amount given in Col. C - -------------- -------------- ------------ ------------------------- Not Applicable 3 Item 7. Voting securities of the trustee owned by underwriters or their officials. Furnish the following information as to the voting securities of the trustee owned beneficially by each underwriter for the obligor and each director, partner and executive officer of each such underwriter: As of March 6, 1997 Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially securities represented by amount given in Col. C - -------------- -------------- ------------ ------------------------- Not Applicable Item 8. Securities of the obligor owned or held by trustee Furnish the following information as to securities of the obligor owned beneficially or held as collateral security for obligations in default by the trustee: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable 4 if the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information as to each class of securities of such underwriter any of which are so owned or held by the trustee: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable Item 10. Ownership or holdings by the trustee of voting securities of certain affiliates or securityholders of the obligor. If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or more of the voting securities of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable 5 Item 11. Ownership or holdings by the trustee of any securities of a person owning 50 percent or more of the voting securities of the obligor. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of the voting securities of the obligor, furnish the following information as to each class of securities of such any of which are so owned or held by the trustee: As of March 6, 1997 Col A Col. B Col. C Nature of Indebtedness Amount Outstanding Date Due - ---------------------- ------------------- ------------- Not Applicable Item 12. Indebtedness of the Obligor to the Trustee. Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the following information: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable Item 13. Defaults by the Obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. 6 (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. Not Applicable Item 14. Affiliations with the Underwriters If any underwriter is an affiliate of the trustee, describe each such affiliation. Not Applicable Item 15. Foreign Trustees. Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not Applicable Item 16. List of Exhibits. List below all exhibits filed as part of this statement of eligibility. *1. A copy of the Charter of IBJ Schroder Bank & Trust Company as amended to date. (See Exhibit 1A to Form T-1, Securities and Exchange Commission File No. 22-18460). *2. A copy of the Certificate of Authority of the Trustee to Commence Business (Included in Exhibit I above). *3. A copy of the Authorization of the Trustee, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). *4 A copy of the existing By-Laws of the Trustee, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). 7 5. A copy of each indenture referred to in item 4, if the Obligor is in default. Not Applicable. 6. The consent of the United States institutional trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. The Exhibits thus designated are incorporated herein by reference as exhibits hereto. Following the description of such Exhibits is a reference to the copy of the Exhibit heretofore filed with the Securities and Exchange Commission, to which there have been no amendments or changes. NOTE ---- In answering any item in (this Statement of Eligibility which relates to matters specularity within the knowledge of the obligor and its directors or officers, the trustee has relied upon information furnished to it by the obligor. In as much as this Form T-1 is filed prior to the ascertainment by the trustee of all facts on which to base responsive answers to Item 2, the answer to said item are based on incomplete information. Item 2, may, however, be considered as correct unless amended by an amendment to this Form T-1. Pursuant to General Instruction B, the trustee has responded to items 1, 2 and 16 of this form since to the best knowledge of the trustee as indicated in item 13, the obligor is not in default under any indenture under which the applicant is trustee. 8 SIGNATURE --------- Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 6th day of March, 1997. IBJ SCHRODER BANK & TRUST COMPANY By: /s/ Alfred Bonanno --------------------------------- Alfred Bonanno Assistant Vice President EXHIBIT 6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, as amended, in connection with the proposed issue by NVP Capital I of its ___% Cumulative Quarterly Income Preferred Securities, we hereby consent that reports of examinations by Federal, State, Territorial, or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. IBJ SCHRODER BANK & TRUST COMPANY By: /s/ Alfred Bonanno --------------------------------- Alfred Bonanno Assistant Vice President Dated: March 6, 1997 EXHIBIT 7 CONSOLIDATED REPORT OF CONDITION OF IBJ SCHRODER BANK & TRUST COMPANY OF NEW YORK, NEW YORK AND FOREIGN AND DOMESTIC SUBSIDIARIES REPORT AS OF SEPTEMBER 30, 1996
DOLLAR AMOUNTS IN THOUSANDS -------------- ASSETS ------ Cash and balance due from depository institutions: Noninterest-bearing balances and currency and coin....................$ 34,228 Interest-bearing balances..............................................$ 229,175 Securities: Held-to-maturity securities................................$ 174,175 Available-for-sale securities..............................$ 36,168 Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries and in IBFs: Federal Funds sold.....................................................$ 15,062 Securities purchased under agreements to resell........................$ -0- Loans and lease financing receivables: Loans and leases, net of unearned income...................$ 1,780,278 LESS: Allowance for loan and lease losses..................$ 56,976 LESS: Allocated transfer risk reserve......................$ -0- Loans and leases, net of unearned income, allowance, and reserve.......$1,723,302 Trading assets held in trading accounts.................................$ 622 Premises and fixed assets (including capitalized leases)................$ 4,264 Other real estate owned.................................................$ 397 Investments in unconsolidated subsidiaries and associated companies.....$ -0- Customers' liability to this bank on acceptances outstanding............$ 105 Intangible assets.......................................................$ 153,290 TOTAL ASSETS............................................................$2,371,320
LIABILITIES ----------- Deposits: In domestic offices....................................................$ 671,747 Noninterest-bearing.....................................$ 224,231 Interest-bearing........................................$ 447,516 In foreign offices, Edge and Agreement subsidiaries, and IBFs...........$ 856,540 Noninterest-bearing.....................................$ 17,313 Interest-bearing........................................$ 839,227 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal Funds purchased................................................$ 430,500 Securities sold under agreements to repurchase.........................$ -0- Demand notes issued to the U.S. Treasury................................$ 50,000 Trading Liabilities.....................................................$ 539 Other borrowed money: a) With a remaining maturity of one year or less.......................$ 61,090 b) With a remaining maturity of more than one year.....................$ 7,647 Mortgage indebtedness and obligations under capitalized leases..........$ -0- Bank's liability on acceptances executed and outstanding................$ 105 Subordinated notes and debentures.......................................$ -0- Other liabilities.......................................................$ 77,289 TOTAL LIABILITIES.......................................................$2,155,457 Limited-life preferred stock and related surplus........................$ -0- EQUITY CAPITAL Perpetual preferred stock and related surplus...........................$ -0- Common stock............................................................$ 29,649 Surplus (exclude all surplus related to preferred stock)................$ 217,008 Undivided profits and capital reserves..................................$ (30,795) Net unrealized gains (losses) on available-for-sale securities..........$ 1 Cumulative foreign currency transaction adjustment......................$ -0- TOTAL EQUITY CAPITAL....................................................$ 215,863 TOTAL LIABILITIES AND EQUITY CAPITAL....................................$2,371,320
EX-25.02 11 EXHIBIT 25.02 ------------------------------------ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- IBJ SCHRODER BANK & TRUST COMPANY (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) New York 13-5375195 (State of Incorporation (I.R.S. Employer if not a U.S. national bank) Identification No.) One State Street, New York, New York 10004 (Address of principal executive offices) (Zip code) Alfred Bonanno, Assistant Vice President IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 (212) 858-2000 (Name, Address and Telephone Number of Agent for Service) NVP CAPITAL I (Exact name of obligor as specified in its charter) Nevada To be applied for (State of jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6226 West Sahara Avenue 89151 Las Vegas, Nevada (Zip code) (Address of principal executive office) % CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES --- (Title of Securities) ------------------------------- Item 1. General information Furnish the following information as to the trustee: (a) Name and address of examining or supervising authority to which it is subject. New York State Banking Department Two Rector Street New York, New York Federal Deposit Insurance Corporation Washington, D.C. Federal Reserve Bank of New York Second District 33 Liberty Street New York, New York (b) Whether it is authorized to exercise corporate trust powers. Yes Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. The obligor is not an affiliate of the trustee. Item 3. Voting securities of the trustee. Furnish the following information as to each class of voting securities of the trustee: As of March 6, 1997 Col. A Col. B Title of class Amount Outstanding Not Applicable 2 Item 4. Trusteeships under other indentures. If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, furnish the following information: (a) Title of the securities outstanding under each such other indenture Not Applicable (b) A brief statement of the facts relied upon as a basis for the claim that no conflicting interest within the meaning of Section 310 (b)(1) of the Act arises as a result of the trusteeship under any such other Indenture, including a statement as to how the indenture securities will rank as compared with the securities issued under such other indenture. Item 5. Interlocking directorates and similar relationships with the obligor or underwriters. If the trustee or any of the directors or executive officers of the trustee is a director, officer, partner, employee, appointee, or representative of the obligor or of any underwriter for the obligor, identify each such person having any such connection and state the nature of each such connection. Not Applicable Item 6. Voting securities of the trustee owned by the obligor or its officials. Furnish the following information as to the voting securities of the trustee owned beneficially by the obligor and each director, partner, and executive officer of the obligor:
As of March 6, 1997 Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially securities represented by amount given in Col. C - -------------- -------------- ------------------------ -------------------------
Not Applicable 3 Item 7. Voting securities of the trustee owned by underwriters or their officials. Furnish the following information as to the voting securities of the trustee owned beneficially by each underwriter for the obligor and each director, partner and executive officer of each such underwriter:
As of March 6, 1997 Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially securities represented by amount given in Col. C - -------------- -------------- ------------------------ ------------------------- Not Applicable
Item 8. Securities of the obligor owned or held by trustee Furnish the following information as to securities of the obligor owned beneficially or held as collateral security for obligations in default by the trustee: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable Item 9. Securities of underwriters owned or held by the trustee. 4 If the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information as to each class of securities of such underwriter any of which are so owned or held by the trustee: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable Item 10. Ownership or holdings by the trustee of voting securities of certain affiliates or securityholders of the obligor. If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or more of the voting securities of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable 5 Item 11. Ownership or holdings by the trustee of any securities of a person owning 50 percent or more of the voting securities of the obligor. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of the voting securities of the obligor, furnish the following information as to each class of securities of such any of which are so owned or held by the trustee: As of March 6, 1997 Col A Col. B Col. C Nature of Indebtedness Amount Outstanding Date Due - ---------------------- ------------------- ------------- Not Applicable Item 12. Indebtedness of the Obligor to the Trustee. Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the following information: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable Item 13. Defaults by the Obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. Not Applicable 6 (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. Not Applicable Item 14. Affiliations with the Underwriters. If any underwriter is an affiliate of the trustee, describe each such affiliation. Not Applicable Item 15. Foreign Trustees. Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not Applicable Item 16. List of Exhibits. List below all exhibits filed as part of this statement of eligibility. *1. A copy of the Charter of IBJ Schroder Bank & Trust Company as amended to date. (See Exhibit 1A to Form T-1, Securities and Exchange Commission File No. 22-18460). *2. A copy of the Certificate of Authority of the Trustee to Commence Business (Included in Exhibit I above). *3. A copy of the Authorization of the Trustee, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). *4 A copy of the existing By-Laws of the Trustee, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). 7 5. A copy of each indenture referred to in Item 4, if the Obligor is in default. Not Applicable. 6. The consent of the United States institutional trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. The Exhibits thus designated are incorporated herein by reference as exhibits hereto. Following the description of such Exhibits is a reference to the copy of the Exhibit heretofore filed with the Securities and Exchange Commission, to which there have been no amendments or changes. NOTE In answering any item in this Statement of Eligibility which relates to matters peculiarly within the knowledge of the obligor and its directors or officers, the trustee has relied upon information furnished to it by the obligor. Inasmuch as this Form T-1 is filed prior to the ascertainment by the trustee of all facts on which to base responsive answers to Item 2, the answer to said item are based on incomplete information. Item 2, may, however, be considered as correct unless amended by an amendment to this Form T-1. Pursuant to General Instruction B, the trustee has responded to items 1, 2 and 16 of this form since to the best knowledge of the trustee as indicated in Item 13, the obligor is not in default under any indenture under which the applicant is trustee. 8 SIGNATURE --------- Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 6th day of March, 1997. IBJ SCHRODER BANK & TRUST COMPANY By: /s/ Alfred Bonanno --------------------------------- Alfred Bonanno Assistant Vice President EXHIBIT 6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, as amended, in connection with the proposed issue by NVP Capital I of its ___% Cumulative Quarterly Income Preferred Securities, we hereby consent that reports of examinations by Federal, State, Territorial, or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. IBJ SCHRODER BANK & TRUST COMPANY By: --------------------------------- Alfred Bonanno Assistant Vice President Dated: March 6, 1997 EXHIBIT 7 CONSOLIDATED REPORT OF CONDITION OF IBJ SCHRODER BANK & TRUST COMPANY OF NEW YORK, NEW YORK AND FOREIGN AND DOMESTIC SUBSIDIARIES REPORT AS OF SEPTEMBER 30, 1996
DOLLAR AMOUNTS IN THOUSANDS -------------- ASSETS ------ Cash and balance due from depository institutions: Noninterest-bearing balances and currency and coin.....................$ 34,228 Interest-bearing balances..............................................$ 229,175 Securities: Held-to-maturity securities................................$ 174,707 Available-for-sale securities..............................$ 36,168 Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries and in IBFs: Federal Funds sold.....................................................$ 15,062 Securities purchased under agreements to resell........................$ -0- Loans and lease financing receivables: Loans and leases, net of unearned income...................$ 1,780,278 LESS: Allowance for loan and lease losses..................$ 56,976 LESS: Allocated transfer risk reserve......................$ -0- Loans and leases, net of unearned income, allowance, and reserve.......$1,723,302 Trading assets held in trading accounts.................................$ 622 Premises and fixed assets (including capitalized leases)................$ 4,264 Other real estate owned.................................................$ 397 Investments in unconsolidated subsidiaries and associated companies.....$ -0- Customers' liability to this bank on acceptances outstanding............$ 105 Intangible assets.......................................................$ -0- Other assets............................................................$ 153,290 TOTAL ASSETS............................................................$2,371,320
LIABILITIES ----------- Deposits: In domestic offices....................................................$ 671,747 Noninterest-bearing.....................................$ 224,231 Interest-bearing........................................$ 447,516 In foreign offices, Edge and Agreement subsidiaries, and IBFs...........$ 856,540 Noninterest-bearing.....................................$ 17,313 Interest-bearing........................................$ 839,227 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal Funds purchased................................................$ 430,500 Securities sold under agreements to repurchase.........................$ -0- Demand notes issued to the U.S. Treasury................................$ 50,000 Trading Liabilities.....................................................$ 539 Other borrowed money: a) With a remaining maturity of one year or less.......................$ 61,090 b) With a remaining maturity of more than one year.....................$ 7,647 Mortgage indebtedness and obligations under capitalized leases..........$ -0- Bank's liability on acceptances executed and outstanding................$ 105 Subordinated notes and debentures.......................................$ -0- Other liabilities.......................................................$ 77,289 TOTAL LIABILITIES.......................................................$2,155,457 Limited-life preferred stock and related surplus........................$ -0- EQUITY CAPITAL Perpetual preferred stock and related surplus...........................$ -0- Common stock............................................................$ 29,649 Surplus (exclude all surplus related to preferred stock)................$ 217,008 Undivided profits and capital reserves..................................$ (30,795) Net unrealized gains (losses) on available-for-sale securities..........$ 1 Cumulative foreign currency translation adjustment......................$ -0- TOTAL EQUITY CAPITAL....................................................$ 215,863 TOTAL LIABILITIES AND EQUITY CAPITAL....................................$2,371,320
EX-25.03 12 EXHIBIT 25.03 ------------------------------------ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- IBJ SCHRODER BANK & TRUST COMPANY (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) New York 13-5375195 (State of Incorporation (I.R.S. Employer if not a U.S. national bank) Identification No.) One State Street, New York, New York 10004 (Address of principal executive offices) (Zip code) Alfred Bonanno, Assistant Vice President IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 (212) 858-2000 NEVADA POWER COMPANY (Exact name of obligor as specified in its charter) Nevada 88-0045330 (State of jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6226 West Sahara Avenue 89151 Las Vegas, Nevada (Zip code) (Address of principal executive office) % JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES SERIES A --- (Title of Securities) ------------------------------- Item 1. General information Furnish the following information as to the trustee: (a) Name and address of examining or supervising authority to which it is subject. New York State Banking Department Two Rector Street New York, New York Federal Deposit Insurance Corporation Washington, D.C. Federal Reserve Bank of New York Second District 33 Liberty Street New York, New York (b) Whether it is authorized to exercise corporate trust powers. Yes Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. The obligor is not an affiliate of the trustee. Item 3. Voting securities of the trustee. Furnish the following information as to each class of voting securities of the trustee: As of March 6, 1997 Col. A Col. B Title of class Amount Outstanding 2 Item 4. Trusteeships under other indentures. If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, furnish the following information: (a) Title of the securities outstanding under each such other indenture Not Applicable (b) A brief statement of the facts relied upon as a basis for the claim that no conflicting interest within the meaning of Section 310 (b)(1) of the Act arises as a result of the trusteeship under any such other Indenture, including a statement as to how the indenture securities will rank as compared with the securities issued under such other indenture. Item 5. Interlocking directorates and similar relationships with the obligor or underwriters. If the trustee or any of the directors or executive officers of the trustee is a director, officer, partner, employee, appointee, or representative of the obligor or of any underwriter for the obligor, identify each such person having any such connection and state the nature of each such connection. Not Applicable Item 6. Voting securities of the trustee owned by the obligor or its officials. Furnish the following information as to the voting securities of the trustee owned beneficially by the obligor and each director, partner, and executive officer of the obligor: As of March 6, 1997 Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially securities represented by amount given in Col. C - -------------- -------------- ------------ ------------------------- Not Applicable 3 Item 7. Voting securities of the trustee owned by underwriters or their officials. Furnish the following information as to the voting securities of the trustee owned beneficially by each underwriter for the obligor and each director, partner and executive officer of each such underwriter: As of March 6, 1997 Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially securities represented by amount given in Col. C - -------------- -------------- ------------ ------------------------- Not Applicable Item 8. Securities of the obligor owned or held by trustee Furnish the following information as to securities of the obligor owned beneficially or held as collateral security for obligations in default by the trustee: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable 4 if the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information as to each class of securities of such underwriter any of which are so owned or held by the trustee: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable Item 10. Ownership or holdings by the trustee of voting securities of certain affiliates or securityholders of the obligor. If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or more of the voting securities of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable 5 Item 11. Ownership or holdings by the trustee of any securities of a person owning 50 percent or more of the voting securities of the obligor. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of the voting securities of the obligor, furnish the following information as to each class of securities of such any of which are so owned or held by the trustee: As of March 6, 1997 Col A Col. B Col. C Nature of Indebtedness Amount Outstanding Date Due - ---------------------- ------------------- ------------- Not Applicable Item 12. Indebtedness of the Obligor to the Trustee. Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the following information: As of March 6, 1997
Col A Col. B Col. C Col. D Name of Owner Title of class Amount owned Percent of voting beneficially or held as securities represented by collateral security for amount given in Col. C obligations in default - -------------- -------------- ------------------------ -------------------------
Not Applicable Item 13. Defaults by the Obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. 6 (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. Not Applicable Item 14. Affiliations with the Underwriters If any underwriter is an affiliate of the trustee, describe each such affiliation. Not Applicable Item 15. Foreign Trustees. Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not Applicable Item 16. List of Exhibits. List below all exhibits filed as part of this statement of eligibility. *1. A copy of the Charter of IBJ Schroder Bank & Trust Company as amended to date. (See Exhibit 1A to Form T-1, Securities and Exchange Commission File No. 22-18460). *2. A copy of the Certificate of Authority of the Trustee to Commence Business (Included in Exhibit I above). *3. A copy of the Authorization of the Trustee, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). *4 A copy of the existing By-Laws of the Trustee, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). 7 5. A copy of each indenture referred to in item 4, if the Obligor is in default. Not Applicable. 6. The consent of the United States institutional trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. The Exhibits thus designated are incorporated herein by reference as exhibits hereto. Following the description of such Exhibits is a reference to the copy of the Exhibit heretofore filed with the Securities and Exchange Commission, to which there have been no amendments or changes. NOTE ---- In answering any item in (this Statement of Eligibility which relates to matters specularity within the knowledge of the obligor and its directors or officers, the trustee has relied upon information furnished to it by the obligor. In as much as this Form T-1 is filed prior to the ascertainment by the trustee of all facts on which to base responsive answers to Item 2, the answer to said item are based on incomplete information. Item 2, may, however, be considered as correct unless amended by an amendment to this Form T-1. Pursuant to General Instruction B, the trustee has responded to items 1, 2 and 16 of this form since to the best knowledge of the trustee as indicated in item 13, the obligor is not in default under any indenture under which the applicant is trustee. 8 SIGNATURE --------- Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 6th day of March, 1997. IBJ SCHRODER BANK & TRUST COMPANY By: /s/ Alfred Bonanno --------------------------------- Alfred Bonanno Assistant Vice President EXHIBIT 6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, as amended, in connection with the proposed issue by NVP Capital I of its ___% Cumulative Quarterly Income Preferred Securities, we hereby consent that reports of examinations by Federal, State, Territorial, or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. IBJ SCHRODER BANK & TRUST COMPANY By: /s/ Alfred Bonanno --------------------------------- Alfred Bonanno Assistant Vice President Dated: March 6, 1997 EXHIBIT 7 CONSOLIDATED REPORT OF CONDITION OF IBJ SCHRODER BANK & TRUST COMPANY OF NEW YORK, NEW YORK AND FOREIGN AND DOMESTIC SUBSIDIARIES REPORT AS OF SEPTEMBER 30, 1996
DOLLAR AMOUNTS IN THOUSANDS -------------- ASSETS ------ Cash and balance due from depository institutions: Noninterest-bearing balances and currency and coin....................$ 34,228 Interest-bearing balances..............................................$ 229,175 Securities: Held-to-maturity securities................................$ 174,175 Available-for-sale securities..............................$ 36,168 Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries and in IBFs: Federal Funds sold.....................................................$ 15,062 Securities purchased under agreements to resell........................$ -0- Loans and lease financing receivables: Loans and leases, net of unearned income...................$ 1,780,278 LESS: Allowance for loan and lease losses..................$ 56,976 LESS: Allocated transfer risk reserve......................$ -0- Loans and leases, net of unearned income, allowance, and reserve.......$1,723,302 Trading assets held in trading accounts.................................$ 622 Premises and fixed assets (including capitalized leases)................$ 4,264 Other real estate owned.................................................$ 397 Investments in unconsolidated subsidiaries and associated companies.....$ -0- Customers' liability to this bank on acceptances outstanding............$ 105 Intangible assets.......................................................$ 153,290 TOTAL ASSETS............................................................$2,371,320
LIABILITIES ----------- Deposits: In domestic offices....................................................$ 671,747 Noninterest-bearing.....................................$ 224,231 Interest-bearing........................................$ 447,516 In foreign offices, Edge and Agreement subsidiaries, and IBFs...........$ 856,540 Noninterest-bearing.....................................$ 17,313 Interest-bearing........................................$ 839,227 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal Funds purchased................................................$ 430,500 Securities sold under agreements to repurchase.........................$ -0- Demand notes issued to the U.S. Treasury................................$ 50,000 Trading Liabilities.....................................................$ 539 Other borrowed money: a) With a remaining maturity of one year or less.......................$ 61,090 b) With a remaining maturity of more than one year.....................$ 7,647 Mortgage indebtedness and obligations under capitalized leases..........$ -0- Bank's liability on acceptances executed and outstanding................$ 105 Subordinated notes and debentures.......................................$ -0- Other liabilities.......................................................$ 77,289 TOTAL LIABILITIES.......................................................$2,155,457 Limited-life preferred stock and related surplus........................$ -0- EQUITY CAPITAL Perpetual preferred stock and related surplus...........................$ -0- Common stock............................................................$ 29,649 Surplus (exclude all surplus related to preferred stock)................$ 217,008 Undivided profits and capital reserves..................................$ (30,795) Net unrealized gains (losses) on available-for-sale securities..........$ 1 Cumulative foreign currency transaction adjustment......................$ -0- TOTAL EQUITY CAPITAL....................................................$ 215,863 TOTAL LIABILITIES AND EQUITY CAPITAL....................................$2,371,320
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