-----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, DUK5D0rr67sh3vXPPx4kKzEJ/uN4VYzGWjMd9AWe1T0hA9UyQqm0czLivnZhCc48 cuxcF9yLdtKjjUa2ocusjQ== 0000912057-01-529934.txt : 20010823 0000912057-01-529934.hdr.sgml : 20010823 ACCESSION NUMBER: 0000912057-01-529934 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20010822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIERRA PACIFIC POWER CO CENTRAL INDEX KEY: 0000090144 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 880044418 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-68188 FILM NUMBER: 1721504 BUSINESS ADDRESS: STREET 1: 6100 NEIL RD STREET 2: P O BOX 10100 CITY: RENO STATE: NV ZIP: 89520-0400 BUSINESS PHONE: 7026895408 MAIL ADDRESS: STREET 1: 6100 NEIL ROAD STREET 2: P.O. BOX 10100 CITY: RENO STATE: NV ZIP: 89520 S-4 1 a2057834zs-4.txt S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 2001 REGISTRATION NO. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- SIERRA PACIFIC POWER COMPANY (Exact name of registrant as specified in its charter) NEVADA (State or other jurisdiction of incorporation or organization) -------------------------- 88-0044418 (I.R.S. Employer Identification No.) P.O. BOX 10100 (6100 NEIL ROAD) RENO, NEVADA 89520-0400 (89511) (775) 834-4011 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) -------------------------- WITH A COPY TO: WILLIAM E. PETERSON, ESQ. Senior Vice President, General Counsel and Corporate Secretary Sierra Pacific Resources P.O. Box 30150 (6100 Neil Road) Reno, Nevada 89520-3150 (775) 834-5690 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------------- With a copy to: WILLIAM C. ROGERS, ESQ. Choate, Hall & Stewart 53 State Street Boston, Massachusetts 02109 (617) 248-5000 -------------------------- Approximate date of commencement of proposed sale of the securities to the public: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / / If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) 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 this Form is a post-effective amendment filed pursuant to Rule 462(d) 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 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 check the following box. / / -------------------------- CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008.... $320,000,000 100% $320,000,000 $80,000
(1) Determined solely for the purpose of calculating the registration fee pursuant to Rule 457 (f)(2) under the Securities Act. -------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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 THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THIS OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION PROSPECTUS [LOGO] SIERRA PACIFIC POWER COMPANY EXCHANGE OFFER SIERRA PACIFIC POWER COMPANY IS OFFERING TO ISSUE ITS 8% GENERAL AND REFUNDING MORTGAGE BONDS, SERIES A, DUE JUNE 1, 2008 (REGISTERED UNDER THE SECURITIES ACT OF 1933) IN EXCHANGE FOR ITS 8% GENERAL AND REFUNDING MORTGAGE BONDS, SERIES A, DUE JUNE 1, 2008 (NOT REGISTERED UNDER THE SECURITIES ACT OF 1933) The exchange offer - We will exchange all old bonds that are validly tendered and not validly withdrawn for an equal principal amount of new bonds. - We are relying on the position of the staff of the Securities and Exchange Commission in certain interpretive letters to third parties providing that the new bonds will be freely tradable. - You may withdraw tenders of old bonds at any time prior to the expiration of the exchange offer. - The exchange offer expires at 5:00 p.m., New York time, on , 2001, unless we extend the offer. - An exchange of old bonds for new bonds will not constitute a taxable event for U.S. federal income tax purposes. The new bonds - The new bonds will: - bear interest at 8% per annum, - mature on June 1, 2008, and - be redeemable, at the option of Sierra Pacific Power Company, as described in this prospectus. The terms of the new bonds will be substantially identical to the terms of the old bonds issued on May 24, 2001, except that the new bonds will not contain terms with respect to restrictions on transfer. - Like the old bonds, the new bonds will be secured by the lien of our General and Refunding Mortgage Indenture which covers substantially all of our Nevada properties and is junior to the lien of our first mortgage indenture. - There will likely be no public market for the new bonds. YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS BEFORE PARTICIPATING IN THIS EXCHANGE OFFER. Each broker-dealer that receives new bonds for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new bonds. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new bonds received in exchange for old bonds where such old bonds were acquired by such broker-dealer as a result of market-making activities or other trading activities. Sierra Pacific Power Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this prospectus available to any broker-dealer for use in connection with any such resale. See "PLAN OF DISTRIBUTION." The Securities and Exchange Commission and state regulators have not approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2001. TABLE OF CONTENTS
PAGE -------- SUMMARY..................................................... 1 RISK FACTORS................................................ 6 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........... 7 THE COMPANY................................................. 8 SELECTED FINANCIAL INFORMATION.............................. 9 USE OF PROCEEDS............................................. 9 THE EXCHANGE OFFER.......................................... 10 DESCRIPTION OF THE NEW BONDS................................ 21 THE INDENTURE............................................... 25 DESCRIPTION OF FIRST MORTGAGE INDENTURE..................... 36 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES....... 37 ERISA CONSIDERATIONS........................................ 41 PLAN OF DISTRIBUTION........................................ 43 WHERE YOU CAN FIND MORE INFORMATION......................... 44 INCORPORATION OF INFORMATION WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSSION...................................... 45 LEGAL OPINIONS.............................................. 45 EXPERTS..................................................... 45
THIS PROSPECTUS INCORPORATES BY REFERENCE IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT SIERRA PACIFIC POWER COMPANY THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS. SEE "WHERE YOU CAN FIND MORE INFORMATION." YOU MAY OBTAIN COPIES OF DOCUMENTS CONTAINING SUCH INFORMATION FROM US, WITHOUT CHARGE, BY EITHER CALLING OR WRITING TO US AT: SIERRA PACIFIC POWER COMPANY P.O. BOX 10100 6100 NEIL ROAD RENO, NEVADA 89520-3150 ATTENTION: TREASURER TELEPHONE: (775) 834-5640 IN ORDER TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST DOCUMENTS FROM US NO LATER THAN , 2001, WHICH IS FIVE DAYS BEFORE THE EXPIRATION OF THE EXCHANGE OFFER ON , 2001. ------------------------ YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR IN THE LETTER OF TRANSMITTAL IN CONNECTION WITH THE EXCHANGE OFFER. WE HAVE NOT AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH ANY INFORMATION OTHER THAN THIS PROSPECTUS. IF ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE ON THE FRONT COVER OF THIS PROSPECTUS. OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE. THIS PROSPECTUS IS NOT AN OFFER TO EXCHANGE THE NEW BONDS, AND IT IS NOT SOLICITING AN OFFER TO EXCHANGE THE NEW BONDS, IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER IS NOT PERMITTED. i SUMMARY This summary, which is presented solely to furnish limited introductory information regarding Sierra Pacific Power Company ("Sierra Pacific" or the "Company"), the exchange offer and the new bonds, has been selected from the detailed information contained elsewhere in this prospectus (including the documents incorporated by reference). This summary does not contain all of the information that you should consider before making any investment decision. The terms "we," "us" and "our" refer to Sierra Pacific. You should read the entire prospectus carefully before making any investment decision. SIERRA PACIFIC POWER COMPANY Sierra Pacific is a public utility, incorporated under the laws of the State of Nevada, and is engaged in the distribution, transmission, generation, purchase and sale of electric energy to approximately 309,500 customers in a 50,000 square mile service area including western, central and northeastern Nevada, including the cities of Reno, Sparks, Carson City, Elko, and a portion of eastern California, including the Lake Tahoe area. Sierra Pacific also provides natural gas service in Nevada to approximately 115,000 customers in the Reno/Sparks area. Our strategy is to focus on our regulated electric and gas operations in the future. Sierra Pacific is one of the two principal subsidiaries of Sierra Pacific Resources, the utility holding company that owns all of our outstanding common stock. In 1999, Sierra Pacific Resources merged with Nevada Power Company, the electric utility serving Las Vegas and the surrounding area of southern Nevada. THE EXCHANGE OFFER On May 24, 2001, we completed a private offering of our 8% General and Refunding Mortgage Bonds, due June 1, 2008. In connection with the private offering, we entered into a registration rights agreement with Credit Suisse First Boston Corporation, Merrill Lynch & Co. and the other initial purchasers in which we agreed to file a registration statement with the Securities and Exchange Commission within 90 days after the date of original issuance of the old bonds, with respect to a registered offer to exchange old bonds for new bonds. Pursuant to the exchange offer, you are entitled to exchange your old bonds for new bonds that are substantially identical in all material respects to the old bonds except that: - the new bonds will be registered under the Securities Act of 1933; and - the new bonds will not be entitled to certain rights applicable to the old bonds under the registration rights agreement. General........................ We are offering to exchange up to $320 million aggregate principal amount of 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 that have been registered under the Securities Act of 1933 for up to $320 million aggregate principal amount of 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 that were issued on May 24, 2001 in a private offering. Old bonds may be exchanged in denominations of $250,000 and integral multiples of $1,000 in excess thereof. We will issue the new bonds promptly after the expiration of the exchange offer. See "THE EXCHANGE OFFER."
1 Expiration Date................ The exchange offer will expire at 5:00 p.m., New York time, on , 2001, unless we decide to extend it. We do not currently intend to extend the expiration date, although we reserve the right to do so, and we have agreed to use our reasonable best efforts to commence and complete the exchange offer promptly but no later than February 9, 2002. If extended, the term "expiration date" will mean the latest date and time to which the exchange offer is extended. Resale of New Bonds ........... Based on interpretive letters written by the staff of the Securities and Exchange Commission to companies other than Sierra Pacific, we believe that, subject to certain exceptions, the new bonds may generally be offered for resale, resold and otherwise transferred by any holder thereof without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, provided that such holder - is not our affiliate (as such term is defined under rule 405 of the Securities Act of 1933), - is acquiring the new bonds in the ordinary course of its business, - is not engaged in, does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the new bonds, and - is not prohibited by any law or policy of the Securities and Exchange Commission from participating in the exchange offer. If Sierra Pacific's belief is inaccurate, holders of the new bonds who offer, resell or otherwise transfer new bonds in violation of the Securities Act of 1933 may incur liability under that Act. Sierra Pacific will not assume or indemnify holders against this liability. All participating broker-dealers that receive new bonds for their own accounts pursuant to the exchange offer in exchange for old bonds that were acquired as a result of market-making or other trading activity must acknowledge that they will deliver a prospectus in connection with any resale of the new bonds. See "PLAN OF DISTRIBUTION." Conditions to the Exchange Offer.......................... Subject to the terms of our registration rights agreement with Credit Suisse First Boston Corporation as the representative of the several initial purchasers of the old bonds, we may terminate the exchange offer before the expiration date if we determine that our ability to proceed with the exchange offer could be materially impaired due to - any legal or governmental action, - any new law, statute, rule or regulation, or - any interpretation by the staff of the Securities and Exchange Commission of any existing law, statute rule or regulation. See "THE EXCHANGE OFFER--Conditions to the Exchange Offer."
2 Tender Procedures--Beneficial Owners......................... If you wish to tender old bonds that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf. IF YOU ARE A BENEFICIAL HOLDER, YOU SHOULD FOLLOW THE INSTRUCTIONS RECEIVED FROM YOUR BROKER OR NOMINEE WITH RESPECT TO TENDERING PROCEDURES AND CONTACT YOUR BROKER OR NOMINEE DIRECTLY. Tender Procedures--Registered Holders and DTC Participants... If you are a registered holder of old bonds and you wish to participate in the exchange offer, you must complete, sign and date the letter of transmittal delivered with this prospectus, or a facsimile thereof. If you are a participant in The Depository Trust Company ("DTC") and you wish to participate in the exchange offer, you must instruct DTC to transmit to the exchange agent a message indicating that you agree to be bound by the terms of the letter of transmittal. You should mail or otherwise transmit the letter of transmittal or facsimile (or DTC message), together with your old bonds (in book-entry form if you are a participant in DTC) and any other required documentation to The Bank of New York, as exchange agent. Guaranteed Delivery Procedures..................... If you are a registered holder of old bonds and you wish to tender them, but they are not immediately available or you cannot deliver them or the letter of transmittal to the exchange agent prior to the expiration date, you must tender your old bonds according to special guaranteed delivery procedures. See THE EXCHANGE OFFER--"Procedures for Tendering--Registered Holders and DTC Participants--Registered Holders" on page 14. Withdrawal Rights.............. You may withdraw tenders of old bonds at any time before 5:00 p.m., New York City time, on the expiration date as provided in "THE EXCHANGE OFFER--Withdrawal of Tenders." Any old bonds not accepted for exchange for any reason will be returned without expense to the tendering holder promptly after the expiration or termination of the exchange offer. Effect on Holders of Old Bonds.......................... If you are a holder of old bonds and do not tender your old bonds in the exchange offer, you will continue to hold the old bonds and you will be entitled to all the rights and limitations applicable to the old bonds in the indenture, except for any rights under the registration rights agreement that by their terms terminate upon the consummation of the exchange offer.
3 Consequences of Failure to Exchange....................... All untendered old bonds will continue to be subject to the restrictions on transfer provided for in the old bonds. In general, the old bonds may not be offered or sold unless registered under the Securities Act of 1933, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act of 1933 and applicable state securities laws. Other than the new bonds being registered in connection with the exchange offer, we do not currently anticipate that we will register the old bonds under the Securities Act of 1933. Certain U.S. Federal Income Tax Consequences................... An exchange of old bonds for new bonds pursuant to the exchange offer will not constitute a taxable event for U.S. federal income tax purposes. See "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES." Use of Proceeds................ We will not receive any proceeds from the issuance of the new bonds in the exchange offer. Exchange Agent................. The Bank of New York is the exchange agent for the exchange offer. The address and telephone number of the exchange agent are set forth in this prospectus under "THE EXCHANGE OFFER--Exchange Agent."
THE NEW BONDS The following summary contains basic information about the new bonds. It does not contain all the information that may be important to you. For a more complete description of the new bonds, please refer to the section of this prospectus entitled "DESCRIPTION OF THE NEW BONDS." The Issuer..................... Sierra Pacific Power Company The New Bonds.................. $320,000,000 aggregate principal amount of 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 Ranking of the Bond............ The new bonds will be secured by the lien of a General and Refunding Mortgage Indenture dated as of May 1, 2001 (the "Indenture") between Sierra Pacific and The Bank of New York, as trustee, which lien will be junior, subject and subordinate to the prior lien of Sierra Pacific's Indenture of Mortgage dated as of December 1, 1940 (the "First Mortgage Indenture"). SEE "THE INDENTURE--Security." Maturity Date.................. June 1, 2008 Interest Payment Dates......... June 1 and December 1 of each year, beginning on December 1, 2001 Denominations.................. We will issue the new bonds in denominations of $250,000 and integral multiples of $1,000 in excess thereof. Optional Redemption............ We may redeem all or a portion of the new bonds for cash at any time at a redemption price equal to the sum of (a) an amount equal to 100% of the then-outstanding principal amount thereof and (b) the applicable make-whole premium, together with accrued and unpaid interest to the date fixed for redemption. See "DESCRIPTION OF THE NEW BONDS--Redemption."
4 Issuance of Additional Indenture Securities........... Additional securities may be issued under the Indenture on the basis of 70% of the Cost or Fair Value to the Company of Property Additions or on the basis of Retired Securities and cash deposited with the Trustee. Events of Default.............. If an event of default occurs and is continuing with respect to the new bonds, the principal amount of such new bonds then outstanding, together with premium, if any, and accrued interest, if any, may be declared immediately due and payable. See "THE INDENTURE--Remedies." Form of Bonds.................. The new bonds initially will be issued in a fully registered book-entry form and will be represented by one or more registered global securities deposited with or on behalf of, and registered in the name of, a nominee of The Depository Trust Company. Risk Factors................... Investment in the new bonds involves certain risks. You should carefully read the "RISK FACTORS" section beginning on page 6 of this prospectus before participating in the exchange offer. Trustee........................ The Bank of New York
5 RISK FACTORS You should carefully consider the risk factors described below, as well as the other information included or incorporated by reference in this prospectus, before deciding whether to exchange old bonds for new bonds. The risks and uncertainties described below are not the only ones facing our company. Additional risks and uncertainties not presently known or that we currently believe to be less significant may also adversely affect us. IF YOU DO NOT TENDER YOUR OLD BONDS, OR DO SO IMPROPERLY, YOU WILL CONTINUE TO HOLD UNREGISTERED BONDS AND YOUR ABILITY TO TRANSFER SUCH BONDS WILL BE ADVERSELY AFFECTED. We will only issue new bonds in exchange for old bonds that are timely received by the exchange agent together with all required documents, including a properly completed and signed letter of transmittal, as described in this prospectus. Therefore, you should allow sufficient time to ensure timely delivery of the old bonds and you should carefully follow the instructions on how to tender your old bonds. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the old bonds. If you do not tender your old bonds or if we do not accept your old bonds because you did not tender your old bonds properly, then, after we consummate the exchange offer, you will continue to hold old bonds that are subject to the existing transfer restrictions and, you will no longer have any registration rights with respect to the old bonds. In addition: - if you tender your old bonds for the purpose of participating in a distribution of the new bonds, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act of 1933 in connection with any resale of the new bonds; and - if you are a broker-dealer that receives new bonds for your own account in exchange for old bonds that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of those new bonds. We have agreed that, for a period of not less than 180 days after the exchange offer is consummated, we will make a prospectus available to any broker-dealer for use in connection with any such resale. After the exchange offer is consummated, if you continue to hold any old bonds, you may have difficulty selling them because there will be fewer old bonds outstanding. In addition, if a large amount of old bonds is not tendered or are tendered improperly, the limited amount of new bonds that would be issued and outstanding after we consummate the exchange offer could lower the market price of the new bonds. THERE IS NO EXISTING MARKET FOR THE NEW BONDS, AND WE CANNOT ASSURE YOU THAT AN ACTIVE TRADING MARKET WILL DEVELOP. The new bonds are a new issue of securities with no established trading market. We do not intend to apply for listing of the new bonds on any national securities exchange or for quotation of the new bonds on any automated dealer quotation system. The liquidity of the trading market in the new bonds, and the market price quoted for the new bonds, may be adversely affected by changes in the overall market for these securities and by changes in our financial performance or prospects or in the prospects for companies in our industry generally. As a result, you cannot be sure that an active trading market will develop for the new bonds. Moreover, even if a market for the new bonds does develop, the new bonds could trade at a discount from their face amount. If a market for the new bonds does not develop, you may be unable to sell your new bonds for an extended period of time, if at all. Consequently, you may not be able to liquidate your investment readily, and your lenders may not readily accept the new bonds as collateral for loans. 6 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS The information in this prospectus, or in the documents incorporated by reference, includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to anticipated financial performance, management's plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions and other matters. Words such as "anticipate," "believe," "estimate," "expect," "intend," "plan" and "objective" and other similar expressions identify those statements that are forward-looking. These statements are based on management's beliefs and assumptions and on information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements. Important factors, including these described in the Risk Factors section in this prospectus, that could cause actual results to differ materially include: - the outcome and timing of rate cases to be filed by us with the Public Utilities Commission of Nevada ("PUCN"), including the periodic applications authorized by recent Nevada legislation to permit us to recover costs for fuel and purchased power which have been recorded by us in our deferred energy accounts and deferred natural gas recorded by us for our gas distribution business; - the extent to which high energy prices and the financial difficulties of electric utilities and power exchanges in the western United States cause any counterparties to our purchased power contacts to default on their obligations, thus requiring us to seek to replace the power on the spot market; - the effect of price controls promulgated in June 2001 by the Federal Energy Regulatory Commission ("FERC") on the availability and price of wholesale power purchases and sales in the western United States; - the ability of us to access the capital markets to support our requirements for working capital, construction costs and the repayment of maturing debt; - whether the PUCN will issue favorable orders in a timely manner to permit us to borrow money and issue additional securities to finance our operations and to purchase power and fuel necessary to serve our customers; - the effect of current or future Nevada, California or federal legislation or regulations affecting electric industry restructuring, including laws or regulations which could allow certain customers to choose new electricity suppliers; - unseasonable weather and other natural phenomena, which can have potentially serious impacts on our ability to procure adequate supplies of fuel or purchased power to serve our customers and on the cost of procuring such supplies; - industrial, commercial and residential growth in our service territories; - the loss of any of our significant customers; - changes in the business of our major customers, including those engaged in gold mining or gaming, which may result in changes in the demand for our services; - changes in environmental regulations, tax or accounting matters or other laws and regulations to which we are subject; - future economic conditions, including inflation rates and monetary policy; - financial market conditions, including changes in availability of capital or interest rate fluctuations; - unusual or unanticipated changes in normal business operations, including unusual maintenance or repairs; and - employee workforce factors, including changes in collective bargaining unit arrangements, strikes or work stoppages. 7 THE COMPANY GENERAL Sierra Pacific is a public utility, incorporated under the laws of the State of Nevada, and is engaged in the distribution, transmission, generation, purchase and sale of electric energy to approximately 309,500 customers in a 50,000 square mile service area including western, central and northeastern Nevada, including the cities of Reno, Sparks, Carson City, Elko, and a portion of eastern California, including the Lake Tahoe area. Sierra Pacific also provides natural gas service in Nevada to approximately 115,000 customers in the Reno/Sparks area. Our strategy is to focus on our regulated electric and gas operations in the future. Sierra Pacific is one of the two principal subsidiaries of Sierra Pacific Resources, the utility holding company that owns all of our outstanding common stock. In 1999, Sierra Pacific Resources merged with Nevada Power Company, the electric utility serving Las Vegas and the surrounding area of southern Nevada. Sierra Pacific has experienced electric sales growth, measured by megawatt hours, at a compounded annual growth rate of approximately 11.7% over the past five years. We own and operate electric generating facilities with an aggregate installed capacity of 1,045 megawatts. For 2000, the Company's installed generation capacity by fuel type was 66.7% gas and oil, 25.5% coal, 7.8% hydro and others. The Company has no ownership interest in, nor does it operate, any nuclear generating units. RECENT DEVELOPMENTS On August 15, 2001, Sierra Pacific Resources completed a public offering of 23,575,000 shares of its common stock, yielding net proceeds of approximately $340 million. Sierra Pacific Resources has contributed substantially all of these net proceeds to Nevada Power Company as an additional equity investment. The remaining portion of these net proceeds are expected to be contributed to Nevada Power Company and/or Sierra Pacific as an additional equity investment. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, which are incorporated by reference into this prospectus, for important additional information about the Company, Sierra Pacific Resources and Nevada Power Company, including information regarding the effect on the Company of the energy problems in the western United States and various other factors that could have a material impact on the Company's business, prospects, results of operations and/or financial condition. The Company's principal executive offices are located at 6100 Neil Road, (P.O. Box 10100), Reno, Nevada 89511, and its telephone number is (775) 834-4011. 8 SELECTED FINANCIAL INFORMATION The following table shows selected financial information for Sierra Pacific on a consolidated basis. You should read the following table along with our Consolidated Financial Statements and Notes contained in our Annual Report on Form 10-K for the year ended December 31, 2000 and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001 and June 30, 2001, which are incorporated by reference into this prospectus. SELECTED FINANCIAL INFORMATION (DOLLARS IN THOUSANDS)
YEAR ENDED YEAR ENDED YEAR ENDED 6 MONTHS ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30, ------------ ------------ ------------ -------------- 1998 1999 2000 2001 ------------ ------------ ------------ -------------- INCOME STATEMENT Operating Revenues: Electric................................ $ 585,657 $ 609,197 $ 893,782 $ 632,341 Gas..................................... 99,532 100,177 100,803 85,894 Operating Income.......................... 114,263 112,703 47,135 29,626 Net Income (Loss)......................... 80,561 66,241 2,058 24,966 CASH FLOW INFORMATION EBITDA(1)................................. 216,006 216,335 115,813 63,678 Interest Expense.......................... (29,262) (42,296) (45,398) (28,704) Cash (Used in) Provided by Investing Activities.............................. (141,886) (144,851) (130,062) 262,821 Cash Flow Provided by (Used in) Operations.............................. 153,191 122,329 112,010 (102,254) BALANCE SHEET Total Assets.............................. 2,011,820 2,084,707 2,193,976 2,834,166 Total Debt................................ 741,923 837,769 934,394 943,982 Preferred Stock........................... 73,115 50,000 50,000 50,000 Preferred Trust Securities................ 48,500 48,500 48,500 48,500 Common Equity............................. 661,367 673,738 604,795 571,709 Total Capitalization...................... $1,524,905 $1,610,007 $1,637,689 $ 1,614,191 CREDIT RATIOS Ratio of Earnings to Fixed Charges(2)..... 3.48 3.02 0.86 0.98 Deficiency.............................. -- -- $ 8,218 $ 758 EBITDA/Interest(1)........................ 7.38 5.11 2.55 2.22
- ------------------------ NOTES: (1) EBITDA includes Operating Income before income taxes, depreciation and amortization. (2) For the purpose of calculating the ratio of earnings to fixed charges, "Fixed Charges" represent the aggregate of interest charges on short-term and long-term debt, distributions on preferred securities, allowance for funds used during construction, capitalized interest, and the portion of rental expense deemed to be attributable to interest. "Earnings" represent the income (or loss) from continuing operations before income taxes, plus fixed charges. 9 USE OF PROCEEDS We will not receive any proceeds from the issuance of the new bonds. In consideration for issuing the new bonds as contemplated in this prospectus, we will receive in exchange old bonds in like principal amount, which will be cancelled and as such will not result in any increase in our indebtedness. The proceeds of the old bonds were used to discharge outstanding indebtedness including outstanding commercial paper balances and $200,000,000 principal amount of Sierra Pacific's Floating Rate Notes due June 12, 2001. THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER Sierra Pacific is offering to issue its 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008, which have been registered under the Securities Act of 1933, as amended (the "Securities Act") (the "New Bonds"), in exchange for its 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008, which have not been so registered (the "Old Bonds"), as described herein (the "Exchange Offer"). The Old Bonds were sold by Credit Suisse First Boston, Merrill, Lynch & Co. and certain other initial purchasers (collectively, the "Initial Purchasers") on May 24, 2001 to a limited number of institutional investors (the "Purchasers"). In connection with the sale of the Old Bonds, Sierra Pacific and the Initial Purchasers entered into a Registration Rights Agreement, dated May 24, 2001 (the "Registration Rights Agreement"), which requires Sierra Pacific, among other things, (a) to file with the Securities and Exchange Commission a registration statement under the Securities Act with respect to New Bonds substantially identical in all material respects to the Old Bonds, to use commercially reasonable efforts to cause such registration statement to be declared effective under the Securities Act and to make an exchange offer for the Old Bonds as discussed below, or (b) to register the Old Bonds under the Securities Act. Sierra Pacific is obligated, upon the effectiveness of the exchange offer registration statement referred to in (a) above, to offer the holders of the Old Bonds the opportunity to exchange their Old Bonds for a like principal amount of New Bonds which will be issued without a restrictive legend and may be reoffered and resold by the holder without restrictions or limitations under the Securities Act. A copy of the Registration Rights Agreement has been filed as an exhibit to the Registration Statement of which this prospectus is a part. The Exchange Offer is being made pursuant to the Registration Rights Agreement to satisfy Sierra Pacific's obligations under that agreement. The term "Holder" with respect to the Exchange Offer means any person in whose name Old Bonds are registered on Sierra Pacific's books, any other person who has obtained a properly completed assignment from the registered holder or any DTC participant whose Old Bonds are held of record by DTC. At the date of this prospectus, the sole Holder of Old Bonds is DTC. In participating in the Exchange Offer, a Holder is deemed to represent to Sierra Pacific, among other things, that (a) The New Bonds acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such New Bonds, whether or not such person is the Holder, (b) neither the Holder nor any such other person receiving such new bonds is engaging in or intends to engage in a distribution of such New Bonds, 10 (c) neither the Holder nor any such other person receiving such New Bonds has an arrangement or understanding with any person to participate in the distribution of such New Bonds, and (d) neither the Holder nor any such other person receiving such new bonds is an "affiliate," as defined in Rule 405 under the Securities Act, of Sierra Pacific. Based on interpretations by the staff of the Securities and Exchange Commission set forth in no-action letters issued to third-parties, Sierra Pacific believes that the New Bonds issued pursuant to the Exchange Offer may be offered for resale and resold or otherwise transferred by any Holder of such New Bonds (other than any such Holder which is an "affiliate" of Sierra Pacific within the meaning of Rule 405 under the Securities Act and except as otherwise discussed below with respect to Holders which are broker-dealers) without compliance with the registration and prospectus delivery requirements of the Securities Act, so long as such New Bonds are acquired in the ordinary course of such Holder's business and such Holder has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of such New Bonds. Any Holder who tenders in the Exchange Offer for the purpose of participating in a distribution of the New Bonds cannot rely on such interpretation by the staff of the Securities and Exchange Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Under no circumstances may this prospectus be used for any offer to resell or any resale or other transfer in connection with a distribution of the New Bonds. In the event that Sierra Pacific's belief is not correct, Holders of the New Bonds who transfer New Bonds in violation of the prospectus delivery provisions of the Securities Act and without an exemption from registration thereunder may incur liability thereunder. Sierra Pacific does not assume or indemnify Holders against such liability. Each broker-dealer that receives New Bonds for its own account in exchange for Old Bonds which were acquired by such broker-dealer as a result of market-making activities or other trading activities must, and must agree to, deliver a prospectus in connection with any resale of such New Bonds. This prospectus may be used for such purpose. Any such broker-dealer may be deemed to be an "underwriter" within the meaning of the Securities Act. The foregoing interpretation of the staff of the Securities and Exchange Commission does not apply to, and this prospectus may not be used in connection with, the resale by any broker-dealer of any New Bonds received in exchange for an unsold allotment of Old Bonds purchased directly from Sierra Pacific. Sierra Pacific has not entered into any arrangement or understanding with any person to distribute the New Bonds to be received in the Exchange Offer. The Exchange Offer is not being made to, nor will Sierra Pacific accept tenders for exchange from, Holders of Old Bonds in any jurisdiction in which the Exchange Offer or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction. See "PLAN OF DISTRIBUTION." TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange any Old Bonds properly tendered and not properly withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. Old Bonds may be tendered only in denominations of $250,000 and integral multiples of $1,000 in excess thereof. We will issue $1,000 principal amount of New Bonds in exchange for each $1,000 principal amount of Old Bonds surrendered in the Exchange Offer. The form and terms of the New Bonds will be the same as the form and terms of the Old Bonds except the New Bonds will be registered under the Securities Act while the Old Bonds were not. The New Bonds will evidence the same debt as the Old Bonds. The New Bonds will be issued under and 11 entitled to the benefits of the same indenture that authorized the issuance of the Old Bonds. Consequently, both the Old Bonds and the New Bonds will be treated as a single series of debt securities under that indenture. As of the date of this prospectus, $320,000,000 in aggregate principal amount of the Old Bonds is outstanding. This prospectus, together with the letter of transmittal, is being sent to all Holders of Old Bonds. There will be no fixed record date for determining registered holders of Old Bonds entitled to participate in the Exchange Offer. We intend to conduct the Exchange Offer in accordance with the provisions of the Registration Rights Agreement, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission. Old Bonds that are not tendered for exchange in the Exchange Offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits those holders have under the Indenture. If any tendered Old Bonds are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, certificates for any such unaccepted Old Bonds will be returned, without expense, to the tendering Holder thereof as promptly as practicable after the Expiration Date. We will be deemed to have accepted for exchange properly tendered Old Bonds when we have given oral or written notice of the acceptance to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders for the purposes of receiving the New Bonds from the Company and delivering New Bonds to those holders. Subject to the terms of the Registration Rights Agreement, we expressly reserve the right to amend or terminate the Exchange Offer, and not to accept for exchange any Old Bonds not previously accepted for exchange, upon the occurrence of any of the conditions specified below under the caption "--Conditions to the Exchange Offer." Holders who tender Old Bonds in the Exchange Offer will not be required to pay brokerage commissions or fees, or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of Old Bonds. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the Exchange Offer. It is important that you read the "--Fees and Expenses" section below for more details regarding fees and expenses incurred in the Exchange Offer. EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date," shall mean 5:00 p.m., New York City time on , , 2001, unless Sierra Pacific, in its sole discretion, extends the Exchange Offer, in which case the term "Expiration Date" will mean the latest date and time to which the Exchange Offer is extended. In order to extend the Exchange Offer, we will notify the Exchange Agent of any extension orally or in writing and we will notify the registered Holders of Old Bonds of the extension no later than 9:00 a.m., New York time, on the business day after the previously scheduled expiration date. Sierra Pacific reserves the right, in its sole discretion: - to delay accepting any Old Bonds, to extend the Exchange Offer or to terminate the Exchange Offer if any of the conditions set forth under "--Conditions to the Exchange Offer" below have not been satisfied, by giving oral or written notice of the delay, extension or termination to the Exchange Agent; or - subject to the terms of the Registration Rights Agreement, to amend the terms of the Exchange Offer in any manner. Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice to the registered Holders of Old Bonds. If we amend the Exchange 12 Offer in a manner that we determine to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the Holders of Old Bonds of the amendment. During any of these extensions, all Old Bonds previously tendered will remain subject to the Exchange Offer, and we may accept them for exchange unless they have been previously withdrawn. We will return any Old Bonds that we do not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the Exchange Offer. Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the Exchange Offer, we will have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to a financial news service. Upon satisfaction or waiver of all the conditions to the Exchange Offer, Sierra Pacific will accept, promptly after the Expiration Date, all Old Bonds properly tendered and will issue the New Bonds promptly after acceptance of the Old Bonds. See "--Conditions to the Exchange Offer." For purposes of the Exchange Offer, Sierra Pacific will be deemed to have accepted properly tendered Old Bonds for exchange when, as and if Sierra Pacific shall have given oral or written notice thereof of the Exchange Agent. In all cases, issuance of the New Bonds for Old Bonds that are accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of a properly completed and duly executed letter of transmittal (or facsimile thereof or an Agent's message in lieu thereof) and all other required documents; provided, however, that Sierra Pacific reserves the absolute right to waive any defects or irregularities in the tender or conditions of the Exchange Offer. If any tendered Old Bonds are not accepted for any reason set forth in the terms and conditions of the Exchange Offer or if Old Bonds are submitted for a greater principal amount or a greater principal amount, respectively, than the Holder desires to exchange, then such unaccepted or non-exchange Old Bonds evidencing the unaccepted portion, as appropriate, will be returned without expense to the tendering Holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer. CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other term of the Exchange Offer, we will not be required to accept for exchange, or exchange any New Bonds for any Old Bonds, and we may, subject to the terms of the Registration Rights Agreement, terminate the Exchange Offer before accepting any Old Bonds for exchange, if: - any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in Sierra Pacific's reasonable judgment, might materially impair the ability of Sierra Pacific to proceed with the Exchange Offer; or - any law, statute, rule or regulation is proposed, adopted or enacted, or any existing law, statute, rule or regulation is interpreted by the staff of the Securities and Exchange Commission, which, in Sierra Pacific's reasonable judgment, might materially impair the ability of Sierra Pacific to proceed with the Exchange Offer. If Sierra Pacific determines in its sole discretion that any of these conditions are not satisfied, Sierra Pacific may - refuse to accept any Old Bonds and return all tendered Old Bonds to the tendering Holders, 13 - extend the Exchange Offer and retain all Old Bonds tendered prior to the expiration of the Exchange Offer, subject, however, to the rights of Holders who tendered such Old Bonds to withdraw their tendered Old Bonds, or - waive such unsatisfied conditions with respect to the Exchange Offer and accept all properly tendered Old Bonds which have not been withdrawn. If such waiver constitutes a material change to the Exchange Offer, Sierra Pacific will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the registered Holders, and Sierra Pacific will extend the Exchange Offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered Holders, if the Exchange Offer would otherwise expire during such five to ten business day period. In addition, we will not be obligated to accept for exchange the Old Bonds of any Holder that has not made: - the representations described under "--Purpose and Effect of the Exchange Offer," and - such other representations as may be reasonably necessary under applicable Securities and Exchange Commission rules, regulations or interpretations to make available to us an appropriate form for registration of the New Bonds under the Securities Act. The Exchange Offer is not conditioned upon any minimum aggregate principal amount of Old Bonds being tendered for exchange. These conditions are for our sole benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in our sole discretion. If we fail at any time to exercise any of the foregoing rights, that failure will not constitute a waiver of that right. Each such right will be deemed an ongoing right that we may assert at any time or at various times. In addition, we will not accept for exchange any Old Bonds tendered, and will not issue New Bonds in exchange for any of those Old Bonds, if at that time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the Indenture under the Trust Indenture Act of 1939. PROCEDURES FOR TENDERING--REGISTERED HOLDERS AND DTC PARTICIPANTS REGISTERED HOLDERS OF OLD BONDS, AS WELL AS BENEFICIAL OWNERS WHO ARE DIRECT PARTICIPANTS IN DTC, WHO DESIRE TO PARTICIPATE IN THE EXCHANGE OFFER SHOULD FOLLOW THE DIRECTIONS SET FORTH BELOW AND IN THE LETTER OF TRANSMITTAL. ALL OTHER BENEFICIAL OWNERS SHOULD FOLLOW THE INSTRUCTIONS RECEIVED FROM THEIR BROKER OR NOMINEE AND SHOULD CONTACT THEIR BROKER OR NOMINEE DIRECTLY. THE INSTRUCTIONS SET FORTH BELOW AND IN THE LETTER OF TRANSMITTAL DO NOT APPLY TO SUCH BENEFICIAL OWNERS. REGISTERED HOLDERS To tender in the Exchange Offer, a Holder must complete, sign and date the letter of transmittal, or facsimile thereof, have the signatures thereon guaranteed if required by the letter of transmittal, and mail or otherwise deliver such letter of transmittal or such facsimile to the Exchange Agent prior to the expiration date. In addition, either - certificates for such Old Bonds must be received by the Exchange Agent along with the letter of transmittal, or - the Holder must comply with the guaranteed delivery procedures described below. 14 To be tendered effectively, the letter of transmittal and other required documents must be received by the Exchange Agent at the address set forth below under "--Exchange Agent" prior to the Expiration Date. The tender by a Holder which is not withdrawn prior to the Expiration Date will constitute an agreement between such Holder and Sierra Pacific in accordance with the terms and subject to the conditions set forth herein and in the letter of transmittal. THE METHOD OF DELIVERY OF OLD BONDS, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD BONDS SHOULD BE SENT TO SIERRA PACIFIC POWER COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS. Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined below) unless the Old Bonds tendered pursuant thereto are tendered - by a registered Holder who has not completed the box entitled "Special Payment Instructions" or "Special Delivery Instructions" on the letter of transmittal, or - for the account of an Eligible Institution (as defined below). In the event that signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantor must be a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (an "Eligible Institution"). If the letter of transmittal is signed by a person other than the registered Holder of any Old Bonds listed therein, such Old Bonds must be endorsed or accompanied by a properly completed bond power signed by such registered Holder as such registered Holder's name appears on such Old Bonds. If the letter of transmittal or any Old Bonds or bond or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by Sierra Pacific, evidence satisfactory to Sierra Pacific of their authority to so act must be submitted with the letter of transmittal. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Old Bonds and (a) whose Old Bonds are not immediately available, (b) who cannot deliver their Old Bonds, the letter of transmittal or any other required documents to the Exchange Agent prior to the Expiration Date, or 15 (c) who cannot complete the procedures for book-entry tender on a timely basis may effect a tender if: (1) the tender is made through an Eligible Institution; (2) prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery), setting forth the name and address of the Holder, the certificate number(s) of such Old Bonds (unless tender is to be made by book-entry transfer) and the principal amount of Old Bonds tendered, stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the date of delivery of the Notice of Guaranteed Delivery, the certificates for all physically tender Old Bonds, in proper form for transfer, or Book-Entry Confirmation (as defined in the letter of transmittal), as the case may be, together with a properly completed and duly executed letter of transmittal (or facsimile thereof or Agent's Message in lieu thereof), with any required signature guarantees and all other documents required by the letter of transmittal, will be deposited by the Eligible Institution with the Exchange Agent; and (3) the certificates and/or other documents referred to in clause (2) above must be received by the Exchange Agent within the time specified above. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Old Bonds according to the guaranteed delivery procedures set forth above. DTC PARTICIPANTS Any financial institution that is a participant in DTC's systems may make book-entry delivery of Old Bonds by causing DTC to transfer such Old Bonds into the Exchange Agent's account at DTC in accordance with DTC's procedures for transfer. Such delivery must be accompanied by either - the letter of transmittal or facsimile thereof, with any required signature guarantees or - an Agent's Message (as hereinafter defined), and any other required documents, and must, in any case, be transmitted to and received by the Exchange Agent at the address set forth below under "--Exchange Agent" prior to the Expiration Date or the guaranteed delivery procedures described above must be complied with. The Exchange Agent will make a request to establish an account with respect to the Old Bonds at DTC for purposes of the Exchange Offer within two business days after the date of this prospectus. The term "Agent's Message" means a message, electronically transmitted by DTC to and received by the Exchange Agent, and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from a Holder of Old Bonds stating that such Holder has received and agrees to be bound by, and makes each of the representations and warranties contained in, the letter of transmittal and, further, that such Holder agrees that the Company may enforce the letter of transmittal against such Holder. MISCELLANEOUS All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Old Bonds and withdrawal of tendered Old Bonds will be determined by Sierra Pacific in its sole discretion, which determination will be final and binding. Sierra Pacific reserves the absolute right to reject any and all Old Bonds not properly tendered or any Old Bonds Sierra Pacific's acceptance of which would, in the opinion of counsel for Sierra Pacific, be unlawful. Sierra Pacific also reserves the right to waive any defects, irregularities or conditions of tender as to particular Old Bonds. Sierra 16 Pacific's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the letter of transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Bonds must be cured within such time as Sierra Pacific shall determine. Although Sierra Pacific intends to notify Holders of defects or irregularities with respect to tenders of Old Bonds, none of Sierra Pacific, the Exchange Agent, or any other person shall incur any liability for failure to give such notification. Tenders of Old Bonds will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Bonds received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holders, unless otherwise provided in the letter of transmittal, as soon as practicable following the Expiration Date. By tendering, each Holder or the Person receiving the New Notes, as the case may be, will be deemed to represent to Sierra Pacific that, among other things, - the New Bonds acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the Person receiving such New Bonds, whether or not such person is the Holder, - neither the Holder nor any such other person is engaged or intends to engage in, or has an arrangement or understanding with any person to participate in, the distribution of such New Bonds, and - neither the Holder nor any such other Person is an "affiliate," as defined in Rule 405 promulgated under the Securities Act, of Sierra Pacific. In all cases, issuance of New Bonds pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of certificates for the Old Bonds tendered for exchange or a timely Book-Entry Confirmation of such Old Bonds into the Exchange Agent's account at DTC, a properly completed and duly executed letter of transmittal (or facsimile thereof or Agent's Message in lieu thereof) and all other required documents. If any tendered Old Bonds are not accepted for any reason set forth in the terms and conditions of the Exchange Offer or if Old Bonds are submitted for a greater principal amount than the Holder desires to exchange, such unaccepted or non-exchanged Old Bonds will be returned without expense to the tendering Holder thereof (or, in the case of Old Bonds tendered by book-entry transfer into the Exchange Agent's account at DTC pursuant to the book-entry transfer procedures described below, such non-exchanged Old Bonds will be credited to an account maintained with DTC) as promptly as practicable after the expiration or termination of the Exchange Offer. Sierra Pacific reserves the right in its sole discretion to purchase or make offers for any Old Bonds that remain outstanding subsequent to the Expiration Date or, as set forth above under "--Conditions to the Exchange Offer," to terminate the Exchange Offer and, to the extent permitted by applicable law, purchase Old Bonds in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers could differ from the terms of the Exchange Offer. BOOK ENTRY TRANSFER The Exchange Agent will establish an account with respect to the Old Bonds at DTC for purposes of the Exchange Offer promptly after the date of this prospectus. Any financial institution participant in DTC's system may make book-entry delivery of Old Bonds by causing DTC to transfer those Old Bonds into the Exchange Agent's account at DTC in accordance with DTC's procedures for transfer. Holders of Old Bonds who are unable to deliver confirmation of the book-entry tender of their Old Bonds into the Exchange Agent's account at DTC or all other documents of transmittal to the Exchange Agent on or prior to the Expiration Date must tender their Old Bonds according to the guaranteed delivery procedures described above. 17 WITHDRAWAL OF TENDERS Except as otherwise provided in this prospectus, Holders of Old Bonds may withdraw their tenders at any time prior to 5:00 p.m., New York City time, on the Expiration Date. To withdraw a tender of Old Bonds in the Exchange Offer, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must - specify the name of the person having deposited the Old Bonds to be withdrawn (the "Depositor"), - identify the Old Bonds to be withdrawn (including the certificate number (unless tendered by book-entry transfer), - be signed by the Holder in the same manner as the original signature on the letter of transmittal by which such Old Bonds were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustees with respect to the Old Bonds register the transfer of such Old Bonds in the name of the person withdrawing the tender, and - specify the name in which any such Old Bonds are to be registered, if different from that of the Depositor. If Old Bonds have been tendered pursuant to book-entry transfer, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Old Bonds, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by any method of delivery described in this paragraph. All questions as to the validity, form and eligibility (including time of receipt) of such notice will be determined by Sierra Pacific, whose determination shall be final and binding on all parties. Any Old Bonds so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and will be returned to the Holder thereof without cost to such Holder as soon as practicable after withdrawal; and no New Bonds will be issued with respect thereto unless the Old Bonds so withdrawn are validly retendered. Properly withdrawn Old Bonds may be retendered by following one of the procedures described above under "--Procedures for Tendering" at any time prior to the Expiration Date. EXCHANGE AGENT The Bank of New York has been appointed as Exchange Agent for the Exchange Offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the Notice of Guaranteed Delivery to the Exchange Agent addressed as follows: The Bank of New York Reorganization Unit 101 Barclay Street-7E New York, NY 10286 Attn: Ms. Diane Amoroso By Telephone: 212-815-3738 By Facsimile: 212-815-6339 FEES AND EXPENSES We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitations by telegraph, telephone or in person by our officers and regular employees and those of our affiliates. 18 We have not retained any dealer-manager in connection with the Exchange Offer and will not make any payments to broker-dealers or others soliciting acceptances of the Exchange Offer. We will, however, pay the Exchange Agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses in connection therewith. Our expenses in connection with the Exchange Offer are estimated in the aggregate to be approximately $175,000 and include, among other things: - Securities and Exchange Commission registration fees; - fees and expenses of the exchange agent and the trustee; - accounting and legal fees and printing costs; and - related fees and expenses. TRANSFER TAXES We will pay all transfer taxes, if any, applicable to the exchange of Old Bonds pursuant to the Exchange Offer. The tendering Holder, however, will be required to pay any transfer taxes (whether imposed on the registered holder or any other person) if: - certificates representing Old Bonds for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of Old Bonds tendered; - tendered Old Bonds are registered in the name of any person other than the person signing the letter of transmittal; or - transfer tax is imposed for any reason other than the exchange of Old Bonds pursuant to the Exchange Offer. If satisfactory evidence of payment of those taxes is not submitted with the letter of transmittal, the amount of those transfer taxes will be billed to such tendering Holder. CONSEQUENCES OF FAILURE TO EXCHANGE Holders of Old Bonds who do not exchange their Old Bonds for New Bonds pursuant to the Exchange Offer will remain subject to the restrictions on transfer applicable to the Old Bonds as set forth in the offering circular distributed in connection with the private offering of the Old Bonds. In general, you may not offer or sell the Old Bonds unless they are registered under the Securities Act, or if the offer or sale is exempt from registration under, or not subject to, the Securities Act and applicable state securities laws. Except as required by the Registration Rights Agreement, we do not intend to register resales of the Old Bonds under the Securities Act. Based on interpretations of the staff of the Securities and Exchange Commission, New Bonds issued pursuant to the Exchange Offer may be offered for resale, resold or otherwise transferred by their holders (other than any such holder that is our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such holders acquired the New Bonds in the ordinary course of the holders' business and the holders have no arrangement or understanding with respect to the distribution of the New Bonds to be acquired in the Exchange Offer. Any holder who tenders in the Exchange Offer for the purpose of participating in a distribution of the New Bonds: - could not rely on the applicable interpretations of the Securities and Exchange Commission; and - must comply with the registration and prospectus delivery requirements of the Securities Act of 1933 in connection with any secondary resale transaction of the New Bonds. 19 After the Exchange Offer is consummated, if you continue to hold any Old Bonds, you may have difficulty selling them because there will be less Old Bonds outstanding. In addition, if a large amount of Old Bonds are not tendered or are tendered improperly, the limited amount of New Bonds that would be issued and outstanding after we consummate the Exchange Offer could lower the market price of the New Bonds. ACCOUNTING TREATMENT We will record the New Bonds in our accounting records at the same carrying value as the Old Bonds, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the Exchange Offer. OTHER Participation in the Exchange Offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take. We may in the future seek to acquire untendered Old Bonds in open market or privately negotiated transactions, through subsequent Exchange Offers or otherwise. We have no present plans to acquire any Old Bonds that are not tendered in the Exchange Offer or to file a registration statement to permit resales of any untendered Old Bonds. 20 DESCRIPTION OF THE NEW BONDS GENERAL The Old Bonds were issued under a General and Refunding Mortgage Indenture, dated as of May 1, 2001 (the "Indenture"), between the Company and The Bank of New York, as trustee (the "Trustee"), in a private transaction that was not subject to the registration requirements of the Securities Act. The Old Bonds and New Bonds are sometimes collectively called the "Bonds" and individually a "Bond." The descriptions under this heading and the heading "THE INDENTURE" are summaries of the material provisions of the Indenture. Such summaries do not purport to be complete and are subject to the detailed provisions of the Indenture. We urge you to read the Indenture because it, not this description, defines your rights as holder of the Bonds. Capitalized terms used under this heading and the heading "THE INDENTURE" which are not otherwise defined in this prospectus shall have the meanings ascribed thereto in the Indenture. Wherever particular provisions of the Indenture or terms defined therein are referred to, such provisions or definitions are incorporated by reference as a part of the statements made herein and such statements are qualified in their entirety by such reference. References to article and section numbers herein, unless otherwise indicated, are references to article and section numbers of the Indenture. As hereinafter discussed, the Indenture provides that, in addition to the Bonds, other debt securities may be issued thereunder, without limitation as to aggregate principal amount, on the basis of Property Additions, Retired Securities and cash. (See "Issuance of Additional Indenture Securities.") The Bonds and all other debt securities issued under the Indenture are collectively referred to herein as the "Indenture Securities." The Old Bonds were initially offered in the principal amount of $320,000,000. The New Bonds are being offered in the same principal amount and on the same terms and conditions as the Old Bonds. The Bonds will bear interest at the rate of 8% per annum set forth in the summary of this prospectus from May 24, 2001, payable semi-annually on each June 1 and December 1 (each an "Interest Payment Date") to the persons in whose names they are registered at the close of business on the fifteenth calendar day preceding each Interest Payment Date; provided, however, that interest payable at maturity (whether at stated maturity, upon redemption or otherwise, hereinafter "Maturity") will be payable to the registered Bondholder to whom principal is payable. The Bonds may be redeemed before their maturity as described below, but are not entitled to the benefit of any sinking fund. The Bonds are initially issuable in book-entry form. Initially, Cede & Co., as nominee for DTC (as defined herein under "Book-Entry System"), will be the registered owner of the Bonds and references herein to the Bondholders, Holders, Owners, owners or Registered Owners of the Bonds shall mean Cede & Co. and not the beneficial owners of the Bonds. Beneficial owners of the Bonds will not receive or have the right to receive bond certificates except as hereinafter provided. See "Book-Entry System." INTEREST Interest on each Bond will be payable on each Interest Payment Date for each such Bond for the period commencing on the next preceding Interest Payment Date (or if no interest has been paid thereon, commencing on the date of issuance thereof) to, but not including, such Interest Payment Date. The first Interest Payment Date will be December 1, 2001 and, thereafter, interest will be paid on the first day of each June and December. If any Interest Payment Date or the date of Maturity falls on a day that is not a Business Day (as defined below), all payments to be made on such day shall be made on the next succeeding Business 21 Day with the same force and effect as if made on the due date, and no additional interest shall be payable as a result of such delay in payment. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Any interest payable on any Interest Payment Date other than Maturity and not so punctually paid or duly provided for will cease to be payable to the person in whose name the Bond is registered at the close of business on the applicable regular record date and will instead be payable to the person in whose name the Bond (or one or more predecessor Bonds) is registered at the close of business on a special record date for the payment of such interest to be fixed by the Company, notice of which will be given to the registered holder of the Bond (or one or more predecessor Bonds) not less than 15 days prior to such special record date. "Business Day" shall mean any day, other than a Saturday or Sunday, on which commercial banks and foreign exchange markets are open for business, including dealings in deposits in U.S. dollars, in New York. PAYMENT OF BONDS; TRANSFERS; EXCHANGES Interest, if any, on each Bond payable on each Interest Payment Date will be paid to the person in whose name such Bond is registered (the registered holder of any Indenture Security being hereinafter called a "Holder") as of the close of business on the regular record date relating to such Interest Payment Date; provided, however, that interest payable at Maturity will be paid to the person to whom principal is paid. However, if there has been a default in the payment of interest on any Bond, such defaulted interest may be payable to the Holder of such Bond as of the close of business on a date selected by the Trustee which is not more than 30 days and not less than 10 days prior to the date proposed by the Company for payment of such defaulted interest and not less than 25 days after the receipt by the Trustee of the notice of the proposed payment or in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Bond may be listed, if the Trustee deems such manner of payment practicable. (See Section 3.07.) The principal of and premium, if any, and interest on the Bonds at Maturity will be payable upon presentation of the Bonds at the corporate trust office of The Bank of New York, in New York, New York, as Paying Agent for the Company. The Company may change the Place of Payment on the Bonds, may appoint one or more additional Paying Agents (including the Company) and may remove any Paying Agent, all at its discretion. (See Section 6.02.) The transfer of Bonds may be registered, and Bonds may be exchanged for other bonds of the same series, of authorized denominations and of like tenor and aggregate principal amount, at the corporate trust office of The Bank of New York, in New York, New York, as Security Registrar for the Bonds. The Company may change the place for registration of transfer and exchange of the Bonds, and may designate one or more additional places for such registration and exchange, all at its discretion. (See Sections 6.02 and 3.05.) No service charge will be made for any transfer or exchange of the Bonds; however, 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 registration of transfer or exchange of the Bonds. The Company will not be required to execute or to provide for the registration of transfer of or the exchange of (a) any Bond during a period of 15 days prior to giving any notice of redemption or (b) any Bond selected for redemption in whole or in part, except the unredeemed portion of any Bond being redeemed in part. (See Section 3.05.) All moneys paid by the Company to a Paying Agent or the Trustee for the payment of the principal of or any premium or interest on a Bond which remain unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to the Company, and the Holder of such Bond thereafter may, as an unsecured general creditor, look only to the 22 Company for payment thereof, and all liability of the Paying Agent, the Trustee and the Company as trustee with respect thereto shall thereupon cease. (See Section 6.03.) REDEMPTION The Bonds will be redeemable, at the Company's option, at any time or from time to time, in whole or in part upon not less than 30 and not more than 60 days' notice mailed to each holder of the Bonds to be redeemed at the holder's address appearing in the register, on any date prior to maturity at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the redemption date) plus the make-whole premium (the "Make-Whole Premium") applicable to such Bonds (the "Redemption Price"). In no event will the Redemption Price ever be less than 100% of the principal amount of the Bonds plus accrued and unpaid interest to the redemption date. The amount of the Make-Whole Premium with respect to the Bonds (or portion thereof) to be redeemed will be equal to the excess, if any, of: (a) the sum of the present values, calculated as of the redemption date, of: (1) each interest payment that, but for such redemption, would have been payable on the Bonds (or portion thereof) being redeemed on each Interest Payment Date occurring after the redemption date (excluding any accrued and unpaid interest for the period prior to the redemption date); and (2) the principal amount that, but for such redemption, would have been payable at the final maturity of the Bonds (or portion thereof) being redeemed, OVER (b) the principal amount of the Bonds (or portion thereof) being redeemed. The present values of each interest and principal payment referred to in clause (a) above will be determined in accordance with generally accepted principles of financial analysis. Such present values will be calculated by discounting the amount of each payment of interest or principal from the date that each such payment would have been payable, but for such redemption, to the redemption date at a discount rate equal to the Treasury Yield (as defined below) plus 30 basis points. The Make-Whole Premium will be calculated by Credit Suisse First Boston Corporation or, if such firm is unwilling or unable to make such calculation, by an independent investment banking institution of national standing appointed by the Company (in any such case, an "Independent Investment Banker"). For purposes of determining the Make-Whole Premium, "Treasury Yield" means a rate of interest per annum equal to the weekly average yield to maturity of United States Treasury Notes that have a constant maturity that corresponds to the remaining term to maturity of the notes, calculated to the nearest 1/12 of a year (the "Remaining Term"). The Treasury Yield will be determined as of the third business day immediately preceding the applicable redemption date. The weekly average yields of United State Treasury Notes will be determined by reference to the most recent statistical release published by the Federal Reserve Bank of New York and designated "H.15(519) Selected Interest Rates" or any successor release (the "H.15 Statistical Release"). If the H.15 Statistical Release sets forth a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the Remaining Term, then the Treasury Yield will be equal to such weekly average yield. In all other cases, the Treasury Yield will be calculated by interpolation, on a straight-line basis, between the weekly average yields on the United States Treasury Notes that have a constant maturity closest to and greater than the Remaining Term and the United States Treasury 23 Notes that have a constant maturity closest to and less than the Remaining Term (in each case as set forth in the H.15 Statistical Release). Any weekly average yields so calculated by interpolation will be rounded to the nearest 1/100th of 1%, with any figure of 1/200 of 1% or above being rounded upward. If weekly average yields for United States Treasury Notes are not available in the H.15 Statistical Release or otherwise, then the Treasury Yield will be calculated by interpolation of comparable rates selected by the Independent Investment Banker. If less than all of the Bonds are to be redeemed, the Trustee will select the Bonds to be redeemed by such method as the Trustee shall deem fair and appropriate. The Trustee may select for redemption Bonds and portions of the Bonds in amounts of $1,000 or whole multiples of $1,000. The Bonds will not be entitled to the benefit of any sinking fund or other mandatory redemption provisions. BOOK-ENTRY SYSTEM Ownership of beneficial interests in the book-entry Bonds will be limited to DTC participants ("Participants") or persons who hold interests through Participants. Upon the issuance of the book-entry Bonds, DTC or its custodian will credit on its internal system the respective principal amount of the individual beneficial interests represented by such the book-entry Bonds to the accounts of its Participants. Such accounts initially will be designated by or on behalf of the initial purchasers. Ownership of beneficial interests in the book-entry Bonds will be shown on, and the transfer of those ownership interests will be effected through, records maintained by DTC or its nominee (with respect to interests of Participants) or by any such Participant (with respect to interests of persons held by such Participants on their behalf). Payments, transfers, exchanges and other matters relating to beneficial interests in the book-entry Bonds may be subject to various policies and procedures adopted by DTC from time to time. None of the Company, the Trustee or any of their agents will have any responsibility or liability for any aspect of DTC's or any Participant's records relating to, or for payments made on account of, beneficial interests in any book-entry Bonds, or for maintaining, supervising or reviewing any records relating to such beneficial interests. DTC has advised the Company that 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 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. Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its 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 a custodial relationship with a Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Interests in the book-entry Bonds will be exchanged for Bonds in certificated form if (i) DTC notifies the Company that it is unwilling or unable to continue as depositary for the book-entry Bonds or has ceased to be qualified to act as such or if at any time such depository ceases to be a clearing agency registered under the Exchange Act, and a successor depositary is not appointed by the Company within 90 days, (ii) there shall have occurred and be continuing an Event of Default (as defined below) with respect to the Bonds or (iii) the Company, in its sole discretion, elects to terminate the book-entry 24 system. Upon the occurrence of such an event, owners of beneficial interests in the book-entry Bonds will receive physical delivery of the Bonds in certificated form. All certificated Bonds issued in exchange for an interest in the book-entry Bonds or any portion thereof will be registered in such names as DTC shall direct. Such Bonds will be issued in minimum denominations of $250,000 and integral multiples of $1,000 in excess thereof and will be in registered form only, without coupons. No beneficial owner of an interest in the book-entry Bonds will be able to transfer that interest except in accordance with DTC's applicable procedures referred to herein. Investors may hold their interests in the book-entry Bonds directly through DTC if they are Participants or indirectly through organizations which are Participants. Accordingly, although owners who hold Bonds through Participants will not possess Bonds in definitive form, the Participants provide a mechanism by which holders of Bonds will receive payments and will be able to transfer their interests. Settlement for the Old Bonds was made by the initial purchasers in immediately available funds on May 24, 2001. All payments of principal and interest on the Bonds will be made by the Company in immediately available funds so long as the Bonds are maintained in the form of book-entry Bonds. THE INDENTURE SECURITY GENERAL Except as otherwise contemplated below under this heading and subject to the exceptions specifically discussed under "Release of Property" and "Defeasance," all Outstanding Indenture Securities, equally and ratably, will be secured by the lien of the Indenture on substantially all properties owned by the Company located in the State of Nevada (and not excepted or released from the lien thereof), and improvements, extensions and additions to, and renewals and replacements of, such properties, which lien, as to such properties, will be junior, subject and subordinate to the respective liens of the Company's existing First Mortgage Indenture. As used herein, the term "First Mortgage Indenture" means the Indenture of Mortgage, dated as of December 1, 1940, from the Company to State Street Bank and Trust Company and Gerald R. Wheeler, as trustees, as heretofore and hereafter amended and supplemented. The Indenture provides that, after the issuance of the initial series of Securities under the Indenture, the Company will not issue any additional bonds under the First Mortgage Indenture, except as necessary to replace any mutilated, lost or destroyed bonds or to effect exchanges and transfers of bonds. The Indenture also provides that, as soon as practicable after the Company becomes entitled to the release and discharge of the First Mortgage Indenture, it will take all necessary action to obtain and effect the release and cancellation of the lien of the First Mortgage Indenture upon any of the Mortgaged Property. (See Section 7.02.) LIEN OF THE INDENTURE GENERAL. The Indenture constitutes a lien on substantially all the real property and tangible personal property of the Company located in the State of Nevada, other than property excepted from the lien thereof and such property as may have been released from the lien thereof in accordance with the terms thereof, subject to no liens prior to the lien of the Indenture other than the lien of the First Mortgage Indenture (so long as the same remains in effect), Permitted Liens and certain other liens permitted to exist. The Indenture provides that after-acquired property (other than excepted property) located in the State of Nevada will be subject to the lien of the Indenture; provided, however, that in the case of 25 consolidation or merger (whether or not the Company is the surviving corporation) or transfer of the Mortgaged Property as or substantially as an entirety, the Indenture will not be required to be a lien upon any of the properties then owned or thereafter acquired by the successor corporation except properties acquired from the Company in or as a result of such transaction and improvements, extensions and additions (as defined in the Indenture) to such properties and renewals, replacements and substitutions of or for any part or parts thereof. (See Article XIII and "Consolidation, Merger, etc." herein.) In addition, after-acquired property may be subject to liens existing or placed thereon at the time of acquisition thereof, including, but not limited to, Purchase Money Liens (as hereinafter defined), and, in certain circumstances, to liens attaching to such property prior to the recording and/or filing of an instrument specifically subjecting such property to the lien of the Indenture. Without the consent of the Holders, the Company and the Trustee may enter into supplemental indentures in order to subject to the lien of the Indenture additional property (including property which would otherwise be excepted from such lien). (See Section 14.01.) Such property would thereupon constitute Property Additions (so long as it would otherwise qualify as Property Additions as described below) and be available as a basis for the issuance of Indenture Securities. (See "Issuance of Additional Indenture Securities.") EXCEPTED PROPERTY. There are excepted from the lien of the Indenture, among other things, cash, deposit accounts, securities; contracts, leases and other agreements of all kinds; contract rights, bills, notes and other instruments; revenues, accounts and accounts receivable and unbilled revenues, claims, demands and judgments; governmental and other licenses, permits, franchises, consents and allowances (except to the extent that any of the same constitute rights or interests relating to the occupancy or use of real property); certain intellectual property rights, domain names and other general intangibles; vehicles, movable equipment and aircraft; all goods, stock in trade, wares, merchandise and inventory held for sale or lease in the ordinary course of business; materials, supplies, inventory and other personal property consumable in the operation of the Mortgaged Property; fuel; portable tools and equipment; furniture and furnishings; computers and data processing, telecommunications and other facilities used primarily for administrative or clerical purposes or otherwise not used in connection with the operation or maintenance of electric or gas utility facilities; coal, ore, gas, oil and other minerals and timber; electric energy, gas (natural or artificial), steam, water and other products generated, produced, manufactured, purchased or otherwise acquired by the Company; real property, gas wells, pipe lines, and other facilities used primarily for the production or gathering of natural gas; and leasehold interests held by the Company as lessee. (See Granting Clauses.) In addition, the properties of the Company located outside of the State of Nevada are not subject to the lien of the Indenture. PERMITTED LIENS. The lien of the Indenture is subject to Permitted Liens and certain other liens permitted to exist. For purposes of the Indenture, Permitted Liens includes any and all of the following, among other, liens: (a) liens for taxes which are not delinquent or are being contested in good faith; (b) mechanics', workmen's and similar liens and other liens arising in the ordinary cause of business; (c) liens in respect of judgments (i) in an amount not exceeding the greater of $10 million and 3% of the aggregate principal amount of Indenture Securities then Outstanding or (ii) with respect to which the Company shall in good faith be prosecuting an appeal or shall have the right to do so; (d) easements, leases or other rights of others in, and defects in title to, the Mortgaged Property which do not in the aggregate materially impair the use by the Company of the Mortgaged Property considered as a whole; (e) certain defects, irregularities and limitations in title to real property subject to rights-of-way in favor of the Company or used primarily for right-of-way purposes; (f) liens securing indebtedness of others upon real property used for transmission or distribution or otherwise to obtain rights-of-way; (g) leases existing at the date of the Restated Indenture and subsequent leases for not more than 10 years or which do not materially impair the use by the Company of the property subject thereto; (h) liens of lessors or licensors for amounts due which are not delinquent or are being 26 contested; (i) controls, restrictions or obligations imposed by Governmental Authorities upon property of the Company or the operation thereof; (j) rights of Governmental Authorities to purchase or designate a purchase of property of the Company; (k) liens required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the Company to maintain self-insurance or to participate in any funds established to cover insurance risks or in connection with workmen's compensation, unemployment insurance, social security or any pension or welfare benefit plan or program; (l) liens to secure duties or public or statutory obligations or surety, stay or appeal bonds; (m) rights of others to take minerals, timber, electric energy, gas, water, steam or other products produced by the Company or by others on property of the Company; (n) rights and interests of Persons other than the Company arising out of agreements relating to the common ownership or joint use of property, and liens on the interests of such Persons in such property; (o) restrictions or assignment and/or qualification requirements on the assignee; (p) liens which have been bonded for the full amount in dispute or for the payment of which other security arrangements have been made; (q) easements, ground leases or rights-of-way on or across property of the Company for the purpose of roads, pipelines, transmission or distribution lines, communication lines, railways and other similar purposes, provided that the same do not materially impair the use by the Company of such property; (r) Prepaid Liens; (s) Purchase Money Liens and other liens existing or placed upon property at the time of, or within 180 days after, the acquisition thereof by the Company; (t) liens which secure indebtedness for borrowed money which matures in less than one year; (u) liens created in connection with the issuance of tax-exempt debt securities to finance the acquisition or construction of property to be used by the Company; (v) liens securing indebtedness or lease obligations related to the construction or acquisition of property, or the development or expansion of property, the obligee in respect of which has no recourse to the Company or any property of the Company other than such property (or the proceeds thereof); (w) liens permitted as described in the second preceding paragraph; and (x) in addition to the Permitted Liens described in clauses (a) through (w) above, liens on any property of the Company (other than Excepted Property) to secure indebtedness for borrowed money (under circumstances not otherwise excepted from the negative pledge covenant described above) in an aggregate principal amount not exceeding 10% of the total assets of the Company and its consolidated subsidiaries, as shown on the latest audited balance sheet of the Company and such subsidiaries dated prior to the date of the issuance or incurrence of such indebtedness. (See Granting Clauses and Section 1.01.) TRUSTEE'S LIEN. The Indenture provides that the Trustee will have a lien, prior to the lien on behalf of the holders of Indenture Securities, upon the Mortgaged Property for the payment of its reasonable compensation and expenses and for indemnity against certain liabilities. (See Section 11.07.) 27 ISSUANCE OF ADDITIONAL INDENTURE SECURITIES The aggregate principal amount of Indenture Securities which may be authenticated and delivered under the Indenture is unlimited. (See Section 3.01.) Securities of any series may be issued from time to time on the basis of Property Additions, Retired Securities and cash deposited with the trustee, and in an aggregate principal amount not exceeding: (i) 70% of the Cost or Fair Value to the Company (whichever is less) of Property Additions (as described below) which do not constitute Funded Property (generally, Property Additions which have been made the basis of the authentication and delivery of Indenture Securities, the release of Mortgaged Property or the withdrawal of cash, which have been substituted for retired Funded Property or which have been used for other specified purposes) after certain deductions and additions, primarily including adjustments to offset property retirements; (ii) the aggregate principal amount of Retired Securities; and (iii) an amount of cash deposited with the Trustee. (See Article IV.) Property Additions generally include any property which is owned by the Company and is subject to the lien of the Indenture except (with certain exceptions) goodwill, going concern value rights or intangible property, or any property the cost of acquisition or construction of which is properly chargeable to an operating expense account of the Company. (See Section 1.03.) Retired Securities means, generally, (a) Indenture Securities which are no longer Outstanding under the Indenture, which have not been retired by the application of Funded Cash and which have not been used as the basis for the authentication and delivery of Indenture Securities, the release of property or the withdrawal of cash and (b) certain bonds issued under the First Mortgage Indenture which have been retired. RELEASE OF PROPERTY Unless an Event of Default has occurred and is continuing, the Company may obtain the release from the lien of the Indenture of any Funded Property, except for cash held by the Trustee, upon delivery to the Trustee of an amount in cash equal to the amount, if any, by which 70% of the Cost of the property to be released (or, if less, the Fair Value to the Company of such property at the time it became Funded Property) exceeds the aggregate of: (1) an amount equal to 70% of the aggregate principal amount of obligations secured by Purchase Money Lien upon the property to be released and delivered to the Trustee, subject to certain limitations described below; (2) an amount equal to 70% of the Cost or Fair Value to the Company (whichever is less) of certified Property Additions not constituting Funded Property after certain deductions and additions, primarily including adjustments to offset property retirements (except that such adjustments need not be made if such Property Additions were acquired or made within the 90-day period preceding the release); (3) the aggregate principal amount of Indenture Securities the Company would be entitled to issue on the basis of Retired Securities (with such entitlement being waived by operation of such release); (4) any amount of cash and/or an amount equal to 70% of the aggregate principal amount of obligations secured by Purchase Money Lien upon the property released delivered to the trustee or other holder of a lien prior to the lien of the Indenture, subject to certain limitations described below; 28 (5) the aggregate principal amount of Indenture Securities delivered to the Trustee (with such Indenture Securities to be canceled by the Trustee); and (6) any taxes and expenses incidental to any sale, exchange, dedication or other disposition of the property to be released. (See Section 8.03.) As used in the Indenture, the term "Purchase Money Lien" means, generally, a lien on the property being released which is retained by the transferor of such property or granted to one or more other Persons in connection with the transfer or release thereof, or granted to or held by a trustee or agent for any such Persons, and may include liens which cover property in addition to the property being released and/or which secure indebtedness in addition to indebtedness to the transferor of such property. (See Section 1.01.) Generally, the principal amount of obligations secured by Purchase Money Lien used as the basis for the release of property may not exceed 75% of the Fair Value of such property unless no additional obligations are outstanding, or are permitted to be issued, under such Purchase Money Lien. (See Section 8.03.) Property which is not Funded Property may generally be released from the lien of the Indenture without depositing any cash or property with the Trustee as long as (a) the aggregate amount of Cost or Fair Value to the Company (whichever is less) of all Property Additions which do not constitute Funded Property (excluding the property to be released) after certain deductions and additions, primarily including adjustments to offset property retirements, is not less than zero or (b) the Cost or Fair Value (whichever is less) of property to be released does not exceed the aggregate amount of the Cost or Fair Value to the Company (whichever is less) of Property Additions acquired or made within the 90-day period preceding the release. (See Section 8.04.) The Indenture provides simplified procedures for the release of minor properties and property taken by eminent domain, and provides for dispositions of certain obsolete property and grants or surrender of certain rights without any release or consent by the Trustee. (See Sections 8.05, 8.07 and 8.08.) If the Company retains any interest in any property released from the lien of the Indenture, the Indenture will not become a lien on such property or such interest therein or any improvements, extensions or additions to such property or renewals, replacements or substitutions of or for such property or any part or parts thereof. (See Section 8.10.) WITHDRAWAL OF CASH Unless an Event of Default has occurred and is continuing and subject to certain limitations, cash held by the Trustee may, generally, (1) be withdrawn by the Company (a) to the extent of an amount equal to 70% the Cost or Fair Value to the Company (whichever is less) of Property Additions not constituting Funded Property, after certain deductions and additions, primarily including adjustments to offset retirements (except that such adjustments need not be made if such Property Additions were acquired or made within the 90-day period preceding the withdrawal) or (b) in an amount equal to the aggregate principal amount of Indenture Securities that the Company would be entitled to issue on the basis of Retired Securities (with the entitlement to such issuance being waived by operation of such withdrawal) or (c) in an amount equal to the aggregate principal amount of any Outstanding Indenture Securities delivered to the Trustee; or (2) upon the request of the Company, be applied to (a) the purchase of Indenture Securities or (b) the payment (or provision therefor) at Stated Maturity of any Indenture Securities or the redemption (or provision therefor) of any Indenture Securities which are redeemable. (See Section 8.06.) 29 CONSOLIDATION, MERGER, ETC. The Company may not consolidate with or merge into any other corporation or convey, otherwise transfer or lease the Mortgaged Property as or substantially as an entirety to any Person unless (a) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or other transfer, or which leases, the Mortgaged Property as or substantially as an entirety is a corporation organized and existing under the laws of the United States, or any State or Territory thereof or the District of Columbia, and such corporation executes and delivers to the Trustee a supplemental indenture that in the case of a consolidation, merger, conveyance or other transfer, or in the case of a lease if the term thereof extends beyond the last stated maturity of the Indenture Securities then outstanding, contains an assumption by such corporation of the due and punctual payment of the principal of and premium, if any, and interest, if any, on the Indenture Securities and the performance of all of the covenants and conditions of the Company under the Indenture and, in the case of a consolidation merger, conveyance or other transfer that contains a grant, conveyance, transfer and mortgage by such corporation confirming the lien of the Indenture on the Mortgaged Property and subjecting to such lien all property thereafter acquired by such corporation that shall constitute an improvement, extension or addition to the Mortgaged Property or renewal, replacement or substitution of or for any part thereof and, at the election of such corporation, subjecting to the lien of the Indenture such other property then owned or thereafter acquired by such corporation as such corporation shall specify and (b) in the case of a lease, such lease is made expressly subject to termination by the Company or by the Trustee at any time during the continuance of an Event of Default. (See Section 13.01.) In the case of the conveyance or other transfer of the Mortgaged Property as or substantially as an entirety to any other Person, upon the satisfaction of all the conditions described above the Company would be released and discharged from all obligations under the Indenture and on the Indenture Securities then Outstanding unless the Company elects to waive such release and discharge. (See Section 13.04.) MODIFICATION OF INDENTURE MODIFICATION WITHOUT CONSENT Without the consent of any Holders, the Company and the Trustee may enter into one or more supplemental indentures for any of the following purposes: (a) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company in the Indenture and in the Indenture Securities; or (b) to add one or more covenants of the Company or other provisions for the benefit of all Holders or for the benefit of the Holders of, or to remain in effect only so long as there shall be outstanding, Indenture Securities of one or more specified series (for the purposes of this subsection, "series" includes all tranches thereof), or to surrender any right or power conferred upon the Company by the Indenture; or (c) to correct or amplify the description of any property at any time subject to the lien of the Indenture; or better to assure, convey and confirm to the Trustee any property subject or required to be subjected to the lien of the Indenture; or to subject to the lien of the Indenture additional property (including property of others), to specify any additional Permitted Liens with respect to such additional property and to modify the provisions in the Indenture for dispositions of certain types of property without release in order to specify any additional items with respect to such additional property; or (d) to change or eliminate any provision of the Indenture or to add any new provision to the Indenture, provided that if such change, elimination or addition adversely affects the interests of 30 the Holders of the Indenture Securities of any series in any material respect, such change, elimination or addition will become effective with respect to such series only when no Indenture Security of such series remains Outstanding; or (e) to establish the form or terms of the Indenture Securities of any series as permitted by the Indenture; or (f) to provide for the authentication and delivery of bearer securities and coupons appertaining thereto representing interest, if any, thereon and for the procedures for the registration, exchange and replacement thereof and for the giving of notice to, and the solicitation of the vote or consent of, the holders thereof, and for any and all other matters incidental thereto; or (g) to evidence and provide for the acceptance of appointment by a successor trustee or by a co-trustee; or (h) to provide for the procedures required to permit the utilization of a non-certificated system of registration for all, or any series of, the Indenture Securities; or (i) to change any place or places where (1) the principal of and premium, if any, and interest, if any, on all or any series of Indenture Securities will be payable, (2) all or any series of Indenture Securities may be surrendered for registration of transfer, (3) all or any series of Indenture Securities may be surrendered for exchange and (4) notices and demands to or upon the Company in respect of all or any series of Indenture Securities and the Indenture may be served; or (j) to cure any ambiguity, to correct or supplement any provision therein which may be defective or inconsistent with any other provision therein, or to make any other changes to the provisions thereof or to add other provisions with respect to matters and questions arising under the Indenture, so long as such other changes or additions do not adversely affect the interests of the Holders of Indenture Securities of any series in any material respect. (See Section 14.01.) Without limiting the generality of the foregoing, if the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), is amended after the date of the Indenture in such a way as to require changes to the Indenture or the incorporation therein of additional provisions or so as to permit changes to, or the elimination of, provisions which, at the date of the Indenture or at any time thereafter, were required by the Trust Indenture Act to be contained in the Indenture, the Indenture will be deemed to have been amended so as to conform to such amendment or to effect such changes or elimination, and the Company and the Trustee may, without the consent of any Holders, enter into one or more supplemental indentures to evidence or effect such amendment. (See Section 14.01.) MODIFICATIONS REQUIRING CONSENT Except as provided above, the consent of the Holders of not less than a majority in aggregate principal amount of the Indenture Securities of all series then Outstanding, considered as one class, is required for the purpose of adding any provisions to, or changing in any manner, or eliminating any of the provisions of, the Indenture pursuant to one or more supplemental indentures; provided, however, that if less than all of the series of Indenture Securities Outstanding are directly affected by a proposed supplemental indenture, then the consent only of the Holders of a majority in aggregate principal amount of Outstanding Indenture Securities of all series so directly affected, considered as one class, will be required; and provided, further, that if the Indenture Securities of any series have been issued in more than one tranche and if the proposed supplemental indenture directly affects the rights of the Holders of one or more, but less than all such tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Indenture Securities of all such tranches so 31 directly affected, considered as one class, will be required; and provided, further, that no such amendment or modification may (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Indenture Security, or reduce the principal amount thereof or the rate of interest thereon (or the amount of any installment of interest thereon) or change the method of calculating such rate or reduce any premium payable upon the redemption thereof, or reduce the amount of the principal of any Discount Security that would be due and payable upon a declaration of acceleration of Maturity or change the coin or currency (or other property) in which any Indenture Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity of any Indenture Security (or, in the case of redemption, on or after the redemption date) without, in any such case, the consent of the Holder of such Indenture Security, (b) permit the creation of any lien not otherwise permitted by the Indenture ranking prior to the lien of the Indenture with respect to all or substantially all of the Mortgaged Property or terminate the lien of the Indenture on all or substantially all of the Mortgaged Property or deprive the Holders of the benefit of the lien of the Indenture, without, in any such case, the consent of the Holders of all Indenture Securities then Outstanding, (c) reduce the percentage in principal amount of the Outstanding Indenture Securities of any series, or tranche thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with any provision of the Indenture or of any default thereunder and its consequences, or reduce the requirements for quorum or voting, without, in any such case, the consent of the Holder of each Outstanding Indenture Security of such series, or (d) modify certain of the provisions of the Indenture relating to supplemental indentures, waivers of certain covenants and waivers of past defaults with respect to the Indenture Securities of any series without the consent of the Holder of each Outstanding Indenture Security of such series. A supplemental indenture that changes or eliminates any covenant or other provision of the Indenture that has expressly been included solely for the benefit of the Holders of, or that is to remain in effect only so long as there shall be Outstanding, Indenture Securities of one or more specified series or modifies the rights of the Holders of Indenture Securities of such series with respect to such covenant or other provision, will be deemed not to affect the rights under the Indenture of the Holders of the Indenture Securities of any other series. (See Section 14.02.) WAIVER The Holders of at least a majority in aggregate principal amount of all Indenture Securities may waive the Company's obligations to comply with certain covenants, including the covenants to maintain its corporate existence and properties, pay taxes and discharge liens, maintain certain insurance and make such recordings and filings as are necessary to protect the security of the Holders and the rights of the Trustee and its covenant with respect to merger, consolidation or the transfer or lease of the Mortgaged Property as or substantially as an entirety, described above, provided that such waiver occurs before the time such compliance is required. The Holders of at least a majority of the aggregate principal amount of Outstanding Indenture Securities of all affected series or tranches, considered as one class, may waive, before the time for such compliance, compliance with any covenant specified with respect to Indenture Securities of such series or tranches thereof. (See Section 6.09.) 32 EVENTS OF DEFAULT Each of the following events constitutes an Event of Default under the Indenture: (1) failure to pay interest on any Indenture Security within 60 days after the same becomes due and payable; (2) failure to pay principal of or premium, if any, on any Indenture Security within three Business Days after its Maturity; (3) failure to perform or breach of any covenant or warranty of the Company in the Indenture (other than a covenant or warranty a default in the performance of which or breach of which is dealt with elsewhere under this paragraph) for a period of 90 days after there has been given to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 33% in principal amount of Outstanding Indenture 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," unless the Trustee, or the Trustee and the Holders of a principal amount of Indenture Securities not less than the principal amount of Indenture Securities the Holders of which gave such notice, as the case may be, agree in writing to an extension of such period prior to its expiration; provided, however, that the Trustee, or the Trustee and such Holders, as the case may be, will be deemed to have agreed to an extension of such period if corrective action has been initiated by the Company within such period and is being diligently pursued; (4) certain events relating to reorganization, bankruptcy and insolvency of the Company or appointment of a receiver or trustee for its property (See Section 10.01.); and (5) an event of default under the First Mortgage Indenture. REMEDIES ACCELERATION OF MATURITY If an Event of Default occurs and is continuing, then the Trustee or the Holders of not less than 33% in principal amount of Indenture Securities then Outstanding may declare the principal amount (or if the Indenture Securities are Discount Securities, such portion of the principal amount as may be provided for such Discount Securities pursuant to the terms of the Indenture) of all of the Indenture Securities then Outstanding, together with premium, if any, and accrued interest, if any, thereon to be immediately due and payable. At any time after such declaration of acceleration of the Indenture Securities then Outstanding, but before the sale of any of the Mortgaged Property and before a judgment or decree for payment of money shall have been obtained by the Trustee as provided in the Indenture, the Event or Events of Default giving rise to such declaration of acceleration will, without further act, be deemed to have been waived, and such declaration and its consequences will, without further act, be deemed to have been rescinded and annulled, if (a) the Company has paid or deposited with the Trustee a sum sufficient to pay (1) all overdue interest, if any, on all Indenture Securities then Outstanding; (2) the principal of and premium, if any, on any Indenture Securities then Outstanding which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Indenture Securities; and (3) all amounts due to the Trustee as compensation and reimbursement as provided in the Indenture; and (b) any other Event or Events of Default, other than the non-payment of the principal of Indenture Securities that shall have become due solely by such declaration of acceleration, shall have been cured or waived as provided in the Indenture. (See Section 10.02.) 33 POSSESSION OF MORTGAGED PROPERTY Under certain circumstances and to the extent permitted by law, if an Event of Default occurs and is continuing, the Trustee has the power to take possession of, and to hold, operate and manage, the Mortgaged Property, or with or without entry, sell the Mortgaged Property. If the Mortgaged Property is sold, whether by the Trustee or pursuant to judicial proceedings, the principal of the Outstanding Indenture Securities, if not previously due, will become immediately due, together with premium, if any, and any accrued interest. (See Sections 10.03, 10.04 and 10.05.) RIGHT TO DIRECT PROCEEDINGS If an Event of Default occurs and is continuing, the Holders of a majority in principal amount of the Indenture Securities then Outstanding will have the right to direct the time, method and place of conducting any proceedings for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, provided that (a) such direction does not conflict with any rule of law or with the Indenture, and could not involve the Trustee in personal liability in circumstances where indemnity would not, in the Trustee's sole discretion, be adequate and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. (See Section 10.16.) LIMITATION ON RIGHT TO INSTITUTE PROCEEDINGS No Holder of any Indenture Security will have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or for any other remedy thereunder unless (a) such Holder has previously given to the Trustee written notice of a continuing Event of Default; (b) the Holders of not less than a majority in aggregate principal amount of the Indenture Securities then Outstanding have made written request to the Trustee to institute proceedings in respect of such Event of Default and have offered the Trustee reasonable indemnity against costs and liabilities to be incurred in complying with such request; and (c) for sixty days after receipt of such notice, the Trustee has failed to institute any such proceeding and no direction inconsistent with such request has been given to the Trustee during such sixty day period by the Holders of a majority in aggregate principal amount of Indenture Securities then Outstanding. Furthermore, no Holder will be entitled to institute any such action if and to the extent that such action would disturb or prejudice the rights of other Holders. (See Section 10.11.) NO IMPAIRMENT OF RIGHT TO RECEIVE PAYMENT Notwithstanding that the right of a Holder to institute a proceeding with respect to the Indenture is subject to certain conditions precedent, each Holder of an Indenture Security has the absolute and unconditional right to receive payment of the principal of and premium, if any, and interest, if any, on such Indenture Security when due and to institute suit for the enforcement of any such payment, and such rights may not be impaired without the consent of such Holder. (See Section 10.12.) NOTICE OF DEFAULT The Trustee is required to give the Holders notice of any default under the Indenture to the extent required by the Trust Indenture Act, unless such default shall have been cured or waived, except that no such notice to Holders of a default of the character described in clause (3) under "Events of Default" may be given until at least 75 days after the occurrence thereof. (See Section 11.02.) The 34 Trust Indenture Act currently permits the Trustee to withhold notices of default (except for certain payment defaults) if the Trustee in good faith determines the withholding of such notice to be in the interests of the Holders. INDEMNIFICATION OF TRUSTEE As a condition precedent to certain actions by the Trustee in the enforcement of the lien of the Indenture and institution of action on the Indenture Securities, the Trustee may require adequate indemnity against costs, expenses and liabilities to be incurred in connection therewith. (See Sections 10.11 and 11.01.) REMEDIES LIMITED BY STATE LAW The laws of the State of Nevada where the Mortgaged Property is located may limit or deny the ability of the Trustee or securityholders to enforce certain rights and remedies provided in the Indenture in accordance with their terms. DEFEASANCE Any Indenture Securities, or any portion of the principal amount thereof, will be deemed to have been paid for purposes of the Indenture, and, at the Company's election, the entire indebtedness of the Company in respect thereof will be deemed to have been satisfied and discharged, if there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust: (a) money (including Funded Cash not otherwise applied pursuant to the Indenture) in an amount which will be sufficient, or (b) Eligible Obligations (as described below), which do not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide monies which, together with the money, if any, deposited with or held by the Trustee or such Paying Agent, will be sufficient, or (c) a combination of (a) and (b) which will be sufficient, to pay when due the principal of and premium, if any, and interest, if any, due and to become due on such Indenture Securities or portions thereof. (See Section 9.01.) For this purpose, Eligible Obligations include direct obligations of, or obligations unconditionally guaranteed by, the United States of America, entitled to the benefit of the full faith and credit thereof, and certificates, depositary receipts or other instruments that evidence a direct ownership interest in such obligations or in any specific interest or principal payments due in respect thereof. Notwithstanding the foregoing, no Bond shall be deemed to have been paid as aforesaid unless the Company shall have delivered to the Trustee either: (a) an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Bonds will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; or (b) (i) an instrument wherein the Company, notwithstanding the satisfaction and discharge of its Indebtedness in respect of the Bonds, shall assume the obligation (which shall be absolute and unconditional) to irrevocably deposit with the Trustee such additional sums of money, if any, or additional Government Obligations, if any, or any combination thereof, at such time or times, as shall be necessary, together with the money and/or Government Obligations theretofore so deposited, to pay when due the principal of and premium, if any, and interest due and to become 35 due on such Bonds or portions thereof; provided, however, that such instrument may state that the obligation of the Company to make additional deposits as aforesaid shall be subject to the delivery to the Company by the Trustee of a notice asserting the deficiency accompanied by an opinion of an independent public accountant of nationally recognized standing showing the calculation thereof; and (ii) an opinion of tax counsel in the United States reasonably acceptable to the Trustee to the effect that the Holders of the outstanding Bonds will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred. DUTIES OF THE TRUSTEE; RESIGNATION; REMOVAL The Trustee will have, and will 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 Trustee will be under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Indenture Securities, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. The Trustee will not be required to expend or risk its own funds or otherwise incur financial liability in the performance of its duties if the Trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it. The Trustee may resign at any time by giving written notice thereof to the Company or may be removed at any time by Act of the Holders of a majority in principal amount of Indenture Securities then Outstanding delivered to the Trustee and the Company. No resignation or removal of the Trustee and no appointment of a successor trustee will become effective until the acceptance of appointment by a successor trustee in accordance with the requirements of the Indenture. So long as no Event of Default or event which, after notice or lapse of time, or both, would become an Event of Default has occurred and is continuing, if the Company has delivered to the Trustee a resolution of its Board of Directors appointing a successor trustee and such successor has accepted such appointment in accordance with the terms of the Indenture, the Trustee will be deemed to have resigned and the successor will be deemed to have been appointed as trustee in accordance with the Indenture. (See Section 11.10.) EVIDENCE TO BE FURNISHED TO THE TRUSTEE Compliance with Indenture provisions is evidenced by written statements of Company officers or persons selected or paid by the Company. In certain cases, opinions of counsel and certification of an engineer, accountant, appraiser or other expert (who in some cases must be independent) must be furnished. In addition, the Indenture requires that the Company give the Trustee, not less often than annually, a brief statement as to the Company's compliance with the conditions and covenants under the Indenture. DESCRIPTION OF FIRST MORTGAGE INDENTURE GENERAL The summaries under this heading do not purport to be complete and are subject to the detailed provisions of the First Mortgage Indenture. Wherever particular provisions of the First Mortgage Indenture or terms defined therein are referred to, such provisions or definitions are incorporated by reference as a part of the statements made herein and such statements are qualified in their entirety by such reference. 36 SECURITY The First Mortgage Indenture covers substantially all of the Company's real and tangible properties located in the State of Nevada, as well as the Company's electric utility properties located in the State of California, and improvements, extensions and additions thereto and replacements thereof. There are excepted from the liens of the First Mortgage Indenture certain current and other assets including cash, securities, accounts receivable, equipment and merchandise held for sale and fuel, materials and supplies held for consumption in the Company's business; timber, oil, coal and other minerals and property not used or useful to the Company in its utility business. The First Mortgage Indenture constitutes a first mortgage lien on the properties of the Company covered thereby, other than property excepted from the liens thereof and such property as may have been disposed of or released from the liens thereof in accordance with the terms thereof, subject to no liens prior to the liens thereof other than certain specified liens permitted to exist and, as to after-acquired property, to liens existing or placed thereon at the time of acquisition and, in certain circumstances, to liens attaching to such property prior to the recording and/or filing of an instrument specifically subjecting such property to the lien of the First Mortgage Indenture. As of August 21, 2001, the aggregate principal amount of first mortgage bonds outstanding under the First Mortgage Indenture is $545.7 million. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES This section describes the material United States federal income tax consequences of exchanging the Old Bonds for the New Bonds and of owning and disposing of bonds. This section reflects the opinion of Choate, Hall & Stewart, counsel to Sierra Pacific. This section applies to you only if you acquired the Old Bonds in the offering at the offering price and you hold your bonds as capital assets for tax purposes. This section does not apply to you if you are a member of a class of holders subject to special rules, such as: - a dealer in securities or currencies; - a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings; - a bank; - a life insurance company; - a tax-exempt organization; - a person that owns notes that are a hedge or that are hedged against interest rate risks; - a person that owns notes as part of a straddle or conversion transaction for tax purposes, or - a person whose functional currency for tax purposes is not the U.S. dollar. If you purchase bonds at a price other than the offering price, the amortizable bond premium or market discount rules may also apply to you. You should consult your tax advisor regarding this possibility. This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations under the Internal Revenue Code, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis. 37 UNITED STATES HOLDERS This subsection describes the tax consequences to a United States holder. You are a United States holder if you are a beneficial owner of a bond and you are: - a citizen or resident of the United States; - a domestic corporation or partnership; - an estate whose income is subject to United States federal income tax regardless of its source; or - a trust if a United States court can exercise primary supervision over the trust's administration and one or more United States persons are authorized to control all substantial decisions of the trust. If you are not a United States holder, this subsection does not apply to you and you should refer to "United States Alien Holders" below EXCHANGE OF OLD BONDS FOR NEW BONDS An exchange of Old Bonds for New Bonds will not be a taxable event for federal income tax purposes. Rather, the New Bonds will be treated as a continuation of the Old Bonds in the hands of a United States holder. As a result, you will not recognize any income, gain or loss for federal income tax purposes upon an exchange of Old Bonds for New Bonds, and you will have the same tax basis and holding period in the New Bonds as you had in the Old Bonds. PAYMENTS OF INTEREST You will be taxed on interest on your bonds as ordinary income at the time you receive the interest or when it accrues, depending on your method of accounting for tax purposes. PURCHASE, SALE AND RETIREMENT OF THE NOTES Your tax basis in your Old Bonds generally will be their cost, and your tax basis in any New Bonds acquired in the Exchange Offer will be equal to your tax basis in the Old Bonds surrendered. You will generally recognize capital gain or loss on the sale or retirement of bonds equal to the difference between the amount you realize on the sale or retirement, excluding any amounts attributable to accrued but unpaid interest, and your tax basis in your bonds. Capital gain of a noncorporate United States holder is generally taxed at a maximum rate of 20% where the property disposed of was held more than one year. 38 UNITED STATES ALIEN HOLDERS This subsection describes the tax consequences to a United States alien holder. You are a United States alien holder if you are the beneficial owner of a bond and are, for United States federal income tax purposes: - a nonresident alien individual; - a foreign corporation; - a foreign partnership; - an estate unless its income is subject to United States federal income tax regardless of its source; or - a trust unless a United States court can exercise primary supervision over the trust's administration and one or more United States persons are authorized to control all substantial decisions of the trust. If you are a United States holder, this section does not apply to you. An exchange of Old Bonds for New Bonds will not constitute a taxable event for federal income tax purposes. Rather, the New Bonds will be treated as a continuation of the Old Bonds in the hands of a United States alien holder. As a result, you will not recognize any income, gain or loss for federal income tax purposes upon an exchange of Old Bonds for New Bonds, and you will have the same tax basis and holding period in the New Bonds as you had in the Old Bonds. Under United States federal income and estate tax law, and subject to the discussion of backup withholding below, if you are a United States alien holder of a bond: - we and other U.S. payors generally will not be required to deduct United States withholding tax from payments of principal, premium, if any, and interest to you if, in the case of payments of interest: (1) you do not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Sierra Pacific entitled to vote, (2) you are not a controlled foreign corporation that is related to Sierra Pacific through stock ownership, (3) your income or gain from the New Bonds is not effectively connected with a trade or business that you conduct within the United States, and (4) either (i) you furnish the U.S. payor an Internal Revenue Service Form W-8BEN certifying under penalties of perjury that you are not a United States person, or (ii) the payor can otherwise be satisfied that you are not a United States person by relying on account documentation or other evidence as prescribed in Treasury regulations. However, this requirement will not be considered satisfied if the payor has actual knowledge or reason to know that you are a United States person notwithstanding the certificate or other documentation. - no deduction for any United States federal withholding tax will be made from any gain that you realize on the sale or exchange of your bond, including the exchange of Old Bonds for New Bonds. We and other payors are required to report payments of interest on your bonds on Internal Revenue Service Form 1042-S even if the payments are not otherwise subject to information reporting requirements. 39 If you are engaged in a trade or business within the United States and the interest on the bond is effectively connected with your United States business, the interest and any gain on the bond will not be subject to withholding if you have provided the payor an Internal Revenue Service Form W-8EC1 as prescribed in the Treasury regulations. However, interest on a bond that is effectively connected with your United States business will be subject to United States taxation in the same manner as applies to United States holders. In addition, if you are entitled to the benefits of a tax treaty with the United States, interest and gain from the bond will generally not be taxable, even if effectively connected with a United States trade or business, unless you also have a permanent establishment in the United States to which the interest or gain is attributable. In order to claim benefits under a tax treaty with the United States, you must furnish an Internal Revenue Service Form W-8BEN to the payor. Further, a bond held by an individual who at death is not a citizen or resident of the United States will not be includible in the individual's gross estate for United States federal estate tax purposes if: - the decedent did not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Sierra Pacific entitled to vote at the time of death, and - the income on the bond would not have been effectively connected with a United States trade or business of the decedent at the same time. BACKUP WITHHOLDING AND INFORMATION REPORTING We and other payors, including brokers, may be required to report to you and to the Internal Revenue Service any payments of principal, premium and interest on your bond and the amount of any proceeds from the sale or exchange of your bond. As described more fully below, we and other payors may also be required to make "backup withholding" from payments of principal, premium, interest and sales proceeds if you fail to provide an accurate taxpayer identification number or otherwise establish an exemption from backup withholding. Backup withholding is not an additional tax. If you are subject to backup withholding, you may obtain a credit or refund of the amount withheld by filing the required information with the Internal Revenue Service. UNITED STATES HOLDERS In general, if you are a noncorporate United States holder, we and other payors are required to report to the Internal Revenue Service all payments of principal, any premium and interest on your bond. In addition, we and other payors are required to report to the Internal Revenue Service any payment of proceeds of the sale of your bond before maturity within the United States. Additionally, backup withholding at a rate of 30.5% will apply to any payments if you fail to provide an accurate taxpayer identification number, or you are notified by the Internal Revenue Service that you have failed to report all interest and dividends required to be shown on your federal income tax returns. UNITED STATES ALIEN HOLDERS In general, payments of principal, premium or interest made by us and other payors to you will not be subject to backup withholding and information reporting, provided that the certification requirements described above under "United States Alien Holders" are satisfied or you otherwise establish an exemption. In general, proceeds of your sale of a bond will not be subject to backup withholding or information reporting if: - you furnish your broker an Internal Revenue Service Form W-8BEN certifying under penalties of perjury that you are not a United States person, or 40 - your broker possesses other documentation concerning your account on which the broker is permitted to rely under Treasury regulations to establish that you are a non-United States person, or - you otherwise establish an exemption. If you are not exempted from backup withholding and information reporting under the preceding paragraph: - backup withholding and information reporting will apply to the proceeds of any sale that you make through the United States office of any broker, foreign or domestic. - information reporting will also apply to the proceeds of sales that are made through a foreign office of a broker if the proceeds are paid into a United States account, or such proceeds or the confirmation of the sale are mailed to you at a United States address, or if you have opened an account with a United States office of your broker, or regularly communicated with the broker from the United States concerning the sale in question and other sales, or negotiated the sale in question through the broker's United States office. Backup withholding will also apply unless the proceeds of such a sale are paid to an account maintained at a bank or other financial institution located outside the United States. - information reporting, but not backup withholding, will apply to sales made through a foreign office of a broker that is a United States person, or that is a foreign corporation or partnership controlled by U.S. persons or that derives more than 50% of its income from U.S. business activities over a three-year period as specified in the Treasury regulations. Notwithstanding any withholding certificate or documentary evidence in a broker's possession, a broker who has actual knowledge or reason to know that you are a United States person will be required to make backup withholdings and file information reports with the Internal Revenue Service if the broker is a U.S. person or is a foreign person that has a U.S. connection of the type discussed in the last bullet point of the preceding paragraph. ERISA CONSIDERATIONS Before making an investment in the Bonds, a benefit plan investor subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and/or the prohibited transaction provisions of the Internal Revenue Code of 1986, as amended (the "Code") (collectively, an "ERISA Plan") should review the following summary of issues. THIS SUMMARY IS BASED ON THE PROVISIONS OF ERISA AND THE CODE (AND THE RELATED REGULATIONS AND ADMINISTRATIVE AND JUDICIAL INTERPRETATIONS) AS OF THE DATE HEREOF. THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE, AND NO ASSURANCE CAN BE GIVEN THAT FUTURE LEGISLATION, COURT DECISIONS, ADMINISTRATIVE REGULATIONS, RULINGS OR ADMINISTRATIVE PRONOUNCEMENTS WILL NOT SIGNIFICANTLY MODIFY THE REQUIREMENTS SUMMARIZED HEREIN. ANY SUCH CHANGES MAY BE RETROACTIVE AND MAY THEREBY APPLY TO TRANSACTIONS ENTERED INTO PRIOR TO THE DATE OF THEIR ENACTMENT OR RELEASE. In contemplating an investment of a portion of an ERISA Plan in the Bonds, the fiduciary of the ERISA Plan who is responsible for making such investment should carefully consider, taking into account the facts and circumstances of the ERISA Plan, whether such investment is consistent with the fiduciary responsibility requirements of ERISA, including, but not limited to, whether: (i) such investment is consistent with the prudence and diversification requirements of ERISA; (ii) the fiduciary has authority to make such investment under the appropriate governing instrument and Title I of ERISA; (iii) such investment is made solely in the interest of the participants in and beneficiaries of the ERISA Plan; (iv) the acquisition and holding of the Bonds does not result in a non-exempt "prohibited transaction" under Section 406 of ERISA or Section 4975 of the Code; and (v) such 41 investment does not violate ERISA's prohibition on improper delegation of control over or responsibility for "plan assets." Fiduciaries of ERISA Plans should also carefully consider the definition of the term "plan assets" in Regulations Section 2510.3-101 promulgated by the United States Department of Labor ("DOL") on November 13, 1986 (the "Plan Asset Regulations"). Under the Plan Asset Regulations, if an ERISA Plan invests in an "equity interest" in a corporation, partnership, trust or another specified entity, the underlying assets and properties of the entity may be deemed for purposes of ERISA and Section 4975 of the Code to be assets of the investing ERISA Plan. According to the Plan Asset Regulations, an interest is not an "equity interest" if it is treated as an indebtedness under applicable local law and has no substantial equity features. Although there is little statutory or regulatory guidance on this subject, and there can be no assurances in this regard, it appears that the Bonds should not be treated as equity interests for purposes of the Plan Asset Regulations. Accordingly, the assets of the Company should not be treated as the assets of any ERISA Plans investing in the Bonds. In addition, ERISA and the Code generally prohibit certain transactions involving the assets of an ERISA Plan and persons who have certain specified relationships to the ERISA Plan ("parties in interest" as defined in ERISA or "disqualified persons" as defined in the Code). The Bonds may not be sold or transferred to, and each purchaser by its purchase of the Bonds shall be deemed to have represented and covenanted that it is not acquiring the Bonds for or on behalf of, and will not transfer the Bonds to, any ERISA Plan except that such purchase for or on behalf of an ERISA Plan shall be permitted: (i) to the extent such purchase is made by or on behalf of a bank collective investment fund maintained by the purchaser in which no ERISA Plan (together with any other plan maintained by the same employer or employee organization) has an interest in excess of 10% of the total assets in such collective investment fund, and the other applicable conditions of Prohibited Transaction Class Exemption 91-38 issued by the DOL are satisfied; (ii) to the extent such purchase is made by or on behalf of an insurance company pooled separate account maintained by the purchaser in which, at any time while the Bonds are outstanding, no ERISA Plan (together with any other plans maintained by the same employer or employee organization) has an interest in excess of 10% of the total of all assets in such pooled separate account, and the other applicable conditions of Prohibited Transaction Class Exemption 90-1 issued by the DOL are satisfied; (iii) to the extent such purchase is made on behalf of an ERISA Plan by (A) an investment adviser registered under the 1940 Act that had as of the last day of its most recent fiscal year total assets under its management and control in excess of $50.0 million and had stockholders' or partners' equity in excess of $750,000, as shown in its most recent balance sheet prepared in accordance with generally accepted accounting principles, or (B) a bank as defined in Section 202 (a)(2) of the 1940 Act with equity capital in excess of $1.0 million as of the last day of its most recent fiscal year, or (C) an insurance company which is qualified under the laws of more than one State to manage, acquire or dispose of any assets of an ERISA Plan, which insurance company has as of the last day of its most recent fiscal year, net worth in excess of $1.0 million and which is subject to supervision and examination by a State authority having supervision over insurance companies and, in any case, such investment adviser, bank or insurance company is otherwise a qualified professional asset manager, as such term is used in Prohibited Transaction Class Exemption 84-14 issued by the DOL, and the assets of such plan when combined with the assets of other plans established or maintained by the same employer (or affiliates thereof) or employee organization and managed by such investment adviser, bank or insurance company, do not represent more than 20% of the total client assets 42 managed by such investment adviser, bank or insurance company at the time of the transaction, and the other applicable conditions of such exemption are otherwise satisfied; (iv) to the extent such plan is a governmental plan (as defined in Section 3(32) of ERISA) which is not subject to the provisions of the Title I of ERISA or Section 401 of the Code; (v) to the extent such purchase is made by or on behalf of an insurance company using the assets of its general account, the reserves and liabilities for the general account contracts held by or on behalf of any plan, together with any other plans maintained by the same employer (or its affiliates) or employee organization, do not exceed 10% of the total reserves and liabilities of the insurance company general account (exclusive of separate account liabilities), plus surplus as set forth in the National Association of Insurance Commissioners Annual Statement filed with the State of domicile of the insurer, in accordance with Prohibited Transaction Class Exemption 95-60 issued by the DOL, and the other applicable conditions of such exemption are otherwise satisfied; (vi) to the extent such purchase is made by an in-house asset manager within the meaning of Part IV(a) of Prohibited Transaction Class Exemption 96-23 issued by the DOL, such manager has made or properly authorized the decision for such plan to purchase Bonds, under circumstances such that Prohibited Transaction Class Exemption 96-23 is applicable to the purchase and holding of such Bonds; or (vii) to the extent such purchase will not otherwise give rise to a transaction described in Section 406 of ERISA or Section 4975(c)(1) of the Code for which a statutory or administrative exemption is unavailable. PROSPECTIVE INVESTORS THAT ARE ERISA PLANS ARE STRONGLY URGED TO CONSULT THEIR OWN ERISA AND TAX ADVISORS REGARDING THE CONSEQUENCES OF AN INVESTMENT IN THE BONDS. The sale of the Bonds to an ERISA Plan shall not be deemed a representation by the Company or the initial purchasers that this investment meets all relevant legal requirements with respect to ERISA Plans generally or any particular ERISA Plan. PLAN OF DISTRIBUTION As discussed under the Section entitled "THE EXCHANGE OFFER," based on an interpretation of the staff of the Securities and Exchange Commission, New Bonds issued pursuant to the exchange offer may be offered for resale and resold or otherwise transferred by any holder of such New Bonds (other than any such holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act and except as otherwise discussed below with respect to holders which are broker-dealers) without compliance with the registration and prospectus delivery requirements of the Securities Act so long as such New Bonds are acquired in the ordinary course of such holder's business and such holder has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of such New Bonds. Each broker-dealer that receives New Bonds for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of those New Bonds. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Bonds received in exchange for Old Bonds only where those Old Bonds were acquired as a result of market-making activities or other trading activities. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. The Company has agreed that, for a period of 180 days after the Expiration Date, they will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 43 200 , all dealers effecting transactions in connection with the New Bonds may be required to deliver a prospectus. The Company will not receive any proceeds from any sale of New Bonds by broker-dealers. New Bonds received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Bonds or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any New Bonds. Any broker-dealer that resells New Bonds that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of those New Bonds may be deemed to be an "underwriter" within the meaning of the Securities Act of 1933 and any profit on any such resale of New Bonds and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act of 1933. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act of 1933. For a period of 180 days after the Expiration Date, the Company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests those documents in the letter of transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for holders of the bonds) other than commissions or concessions of any broker-dealers and will indemnify the holders of the bonds (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act of 1933. WHERE YOU CAN FIND MORE INFORMATION We are filing a registration statement on Form S-4 to register with the Securities and Exchange Commission the New Bonds to be issued in exchange for the Old Bonds. This prospectus is part of that registration statement. As allowed by the Securities and Exchange Commission's rules, this prospectus does not contain all of the information you can find in the registration statement and the exhibits to the registration statement. Because the prospectus may not contain all the information that you may find important, you should review the full text of these documents. Although all of the common stock of the Company is owned by Sierra Pacific Resources, the Company remains subject to the informational requirements of the Exchange Act with respect to certain other classes of securities currently outstanding. The Company, therefore, files reports and other information with the Securities and Exchange Commission. Such reports, proxy statements and other information filed by the Company with the Securities and Exchange Commission can be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission. Information on the public reference rooms and their copy charges may be obtained from the Securities and Exchange Commission by calling 1-800-SEC-0330. The Securities and Exchange Commission also maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants, including the Company, that have been filed electronically with the Securities and Exchange Commission. 44 INCORPORATION OF INFORMATION WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSSION The Securities and Exchange Commission allows us to incorporate by reference the information we file with them, which means: - incorporated documents are considered part of the prospectus; - we can disclose important information to you by referring you to those documents; and - information that we file with the Securities and Exchange Commission will automatically update and supersede this incorporated information. We incorporate by reference the documents listed below which were filed with the Securities and Exchange Commission under the Exchange Act: - the Company's annual report on Form 10-K for the year ended December 31, 2000; - the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2001; and - the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2001. We also incorporate by reference each of the following documents that we will file with the Securities and Exchange Commission after the date of this prospectus until this offering is completed or after the date of this initial registration statement and before effectiveness of the registration statement: - reports filed under Sections 13(a) and (c) of the Exchange Act; - definitive proxy or information statements filed under Section 14 of the Exchange Act in connection with any subsequent stockholders' meeting; and - any reports filed under Section 15(d) of the Exchange Act. You should rely only on information contained or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate as of the date of this prospectus only. Our business, financial condition and results of operations may have changed since that date. You may request a copy of any filings referred to above (excluding exhibits), at no cost, by contacting us at the following address: Treasurer, Sierra Pacific Power Company, P.O. Box 10100 (6100 Neil Road), Reno Nevada 89520-3150, Telephone: (775) 834-5640. LEGAL OPINIONS The validity of the New Bonds offered hereby and certain tax matters will be passed upon for the Company by Choate, Hall & Stewart (a partnership including professional corporations), Boston, Massachusetts. Matters of Nevada law will be passed upon for the Company by Woodburn and Wedge, Reno, Nevada. EXPERTS The consolidated financial statements and the related consolidated financial statement schedule incorporated in this prospectus by reference from Sierra Pacific's Annual Report on Form 10-K for the year ended December 31, 2000 has been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 45 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Until , 200 , all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligations to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. $320,000,000 [LOGO] SIERRA PACIFIC POWER COMPANY 8% GENERAL AND REFUNDING MORTGAGE BONDS, SERIES A, DUE JUNE 1, 2008 --------------------- PROSPECTUS --------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Nevada Revised Statutes provide that a corporation's articles of incorporation may include a provision eliminating or limiting the personal liability of a director or officer to the corporation or its stockholders for damages for breach of fiduciary duty as a director or officer. However, such a provision may not eliminate or limit the liability of a director or officer for (1) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law or (2) the payment of certain distributions in violation of Chapter 78 of the Nevada Revised Statutes. The Company's Articles of Incorporation provide that no director, officer, employee, fiduciary or authorized representative of the Company shall be personally liable for monetary damages as such for any action taken, or any failure to take any action, as a director, officer or other representative capacity to the fullest extent that the laws of the State of Nevada permit elimination or limitation of the liability of directors and officers. The Nevada Revised Statutes also provide that under certain circumstances, a corporation may indemnify any person for amounts incurred in connection with a pending, threatened or completed action, suit or proceeding in which he is, or is threatened to be made, a party by reason of his being a director, officer, employee or agent of the corporation or serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, if such person acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. With respect to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor, indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court to be liable to the corporation or for amounts paid in settlement to the corporation, unless the court determines that the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. The Company's Articles of Incorporation provide in substance that every director and officer of the Company shall be entitled to indemnification against reasonable expense and any liability incurred in connection with the defense of any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the Company or otherwise, in which he or she may be involved, as a party or otherwise, by reason of being or having been a director or officer of the Company or by reason of the fact that such person is or was serving at the request of the Company as a director, officer, employee, fiduciary or other representative of the Company or another corporation, partnership, joint venture, trust, employee benefit plan or other entity, except to the extent prohibited by law. The Company has purchased insurance coverage under a policy insuring its directors and officers against certain liabilities which they may incur in their capacity as such. See "Item 22. Undertakings" for a description of the Securities and Exchange Commission's position regarding such indemnification provisions. ITEM 21. EXHIBITS See Index to Exhibits immediately preceding the Exhibits included as part of this Registration Statement. II-1 ITEM 22. UNDERTAKINGS The undersigned registrant hereby undertakes: (1) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (2) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of the Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. 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 provisions referred to in Item 15 hereof, 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 Securities Act of 1933 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 person 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. II-2 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada, on the 22nd day of August, 2001. SIERRA PACIFIC POWER COMPANY By: /s/ JEFFREY L. CECCARELLI ----------------------------------------- Jeffrey L. Ceccarelli PRESIDENT
POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Walter M. Higgins III, William E. Peterson, Jeffrey L. Ceccarelli, Dennis D. Schiffel and Richard K. Atkinson and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, 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 he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE --------- ----- ---- /s/ WALTER M. HIGGINS III ------------------------------------------- Director August 22, 2001 Walter M. Higgins III /s/ JEFFREY L. CECCARELLI ------------------------------------------- President August 22, 2001 Jeffrey L. Ceccarelli /s/ DENNIS D. SCHIFFEL ------------------------------------------- Senior Vice President and August 22, 2001 Dennis D. Schiffel Chief Financial Officer /s/ JOHN E. BROWN ------------------------------------------- Controller August 22, 2001 John E. Brown
II-3
SIGNATURE TITLE DATE --------- ----- ---- /s/ EDWARD P. BLISS ------------------------------------------- Director August 22, 2001 Edward P. Bliss /s/ MARY LEE COLEMAN ------------------------------------------- Director August 22, 2001 Mary Lee Coleman /s/ KRESTINE M. CORBIN ------------------------------------------- Director August 22, 2001 Krestine M. Corbin /s/ THEODORE J. DAY ------------------------------------------- Director August 22, 2001 Theodore J. Day /s/ JAMES R. DONNELLEY ------------------------------------------- Director August 22, 2001 James R. Donnelley /s/ FRED D. GIBSON JR. ------------------------------------------- Director August 22, 2001 Fred D. Gibson Jr. /s/ JERRY E. HERBST ------------------------------------------- Director August 22, 2001 Jerry E. Herbst /s/ JAMES L. MURPHY ------------------------------------------- Director August 22, 2001 James L. Murphy /s/ JOHN F. O'REILLY ------------------------------------------- Director August 22, 2001 John F. O'Reilly /s/ DENNIS E. WHEELER ------------------------------------------- Director August 22, 2001 Dennis E. Wheeler
II-4 EXHIBIT INDEX
DESCRIPTION ----------- 1.1 Registration Rights Agreement dated as of May 24, 2001 between Sierra Pacific Power Company and Credit Suisse First Boston Corporation as representative of the several Initial Purchasers. 3.1+ Restated Articles of Incorporation (previously filed as Exhibit 3(A) to Form 10-K for the year ended December 31, 1993) 3.2+ By-Laws (previously filed as Exhibit 3(A) to Form 10-K for the year ended December 31, 1996) 4.1+ General and Refunding Mortgage Indenture, dated as of May 1, 2001 between Sierra Pacific Power Company and The Bank of New York, as Trustee (previously filed as Exhibit 4.2(a) to Form 10-Q for the quarter ended June 30, 2001) 4.2+ First Supplemental Indenture, dated as of May 1, 2001, establishing Sierra Pacific Power Company's 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (previously filed as Exhibit 4.2(b) to Form 10-Q for the quarter ended June 30, 2001) 4.3+ Officer's Certificate establishing the terms of Sierra Pacific Power Company's 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (previously filed as Exhibit 4.2(c) to Form 10-Q for the quarter ended June 30, 2001) 4.4 Form of Transmittal Letter 5.1 Opinion of Choate, Hall & Stewart 5.2 Opinion of Woodburn and Wedge 8.1 Opinion of Choate, Hall & Stewart as to Tax Matters (included in Exhibit 5.1) 23.1 Consent of Deloitte & Touche LLP 23.2 Consent of Choate, Hall & Stewart (included in Exhibit 5.1) 23.3 Consent of Woodburn and Wedge (included in Exhibit 5.2) 23.4 Consent of Choate, Hall & Stewart as to Tax Matters (included in Exhibit 5.1) 24.1 Powers of Attorney (included on signature page) 25.1 Statement of Eligibility of Trustee on Form T-1 of The Bank of New York
- ------------------------ + Previously filed II-5 EX-1.1 3 a2057834zex-1_1.txt EXHIBIT 1.1 Exhibit 1.1 $320,000,000 SIERRA PACIFIC POWER COMPANY 8% GENERAL AND REFUNDING MORTGAGE BONDS, SERIES A, DUE JUNE 1, 2008 REGISTRATION RIGHTS AGREEMENT MAY 24, 2001 CREDIT SUISSE FIRST BOSTON CORPORATION, As Representative of the several Initial Purchasers Eleven Madison Avenue, New York, NY 10010-3629 Dear Sirs: Sierra Pacific Power Company, a Nevada corporation (the "COMPANY"), proposes to issue and sell to Credit Suisse First Boston Corporation and the other Initial Purchasers (collectively, the "INITIAL PURCHASERS"), named in a purchase agreement of even date herewith (the "PURCHASE AGREEMENT"), between the Company and Credit Suisse First Boston Corporation, as representative of the Initial Purchasers, upon the terms set forth in the Purchase Agreement, $320,000,000 aggregate principal amount of its 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (the "INITIAL SECURITIES"). The Initial Securities will be issued pursuant to a General and Refunding Mortgage Indenture, dated as of May 1, 2001, (the "INDENTURE"), among the Company and The Bank of New York, as trustee (the "TRUSTEE"). As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Company agrees with the Initial Purchasers, for the benefit of the Initial Purchasers and the holders of the Securities (as defined below) (collectively the "HOLDERS"), as follows: 1. REGISTERED EXCHANGE OFFER. Unless not permitted by applicable law (after the Company has complied with the ultimate paragraph of this Section 1), the Company shall prepare and, not later than 90 days (such 90th day being a "FILING DEADLINE") after the date on which the Initial Purchasers purchase the Initial Securities pursuant to the Purchase Agreement (the "CLOSING DATE"), file with the Securities and Exchange Commission (the "COMMISSION") a registration statement (the "EXCHANGE OFFER REGISTRATION STATEMENT") on an appropriate form under the Securities Act of 1933, as amended (the "SECURITIES ACT"), with respect to a proposed offer (the "REGISTERED EXCHANGE OFFER") to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities of the Company issued under the Indenture, identical in all material respects to the Initial Securities and registered under the Securities Act (the "EXCHANGE SECURITIES"). The Company shall use its reasonable best efforts to (i) cause such Exchange Offer Registration Statement to become effective under the Securities Act within 210 days after the Closing Date (such 210th day being an "EFFECTIVENESS DEADLINE") and (ii) keep the Exchange Offer Registration Statement effective for not less than 30 days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "EXCHANGE OFFER REGISTRATION PERIOD"). If the Company commences the Registered Exchange Offer, the Company (i) will be entitled to consummate the Registered Exchange Offer 30 days after such commencement (provided that the Company has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange Offer) and (ii) will be required to consummate the Registered Exchange Offer no later than 50 days after the date on which the Exchange Offer Registration Statement is declared effective (such 50th day being the "CONSUMMATION DEADLINE"). Following the declaration of the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder's business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States. The Company acknowledges that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder which is a broker-dealer electing to exchange Initial Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an "EXCHANGING DEALER"), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section, and (c) Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell Securities (as defined below) acquired in exchange for Initial Securities constituting any portion of an unsold allotment, is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale. The Company shall use its reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; PROVIDED, HOWEVER, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Company shall make such prospectus and any amendment or supplement thereto available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 180 days after the consummation of the Registered Exchange Offer. If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Company, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser upon the written request of such Initial Purchaser, in exchange (the "PRIVATE EXCHANGE") for the Initial Securities held by such Initial Purchaser, a like principal amount of debt securities of the Company issued under the Indenture and identical in all material respects to the Initial Securities (the "PRIVATE EXCHANGE SECURITIES"). The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the "SECURITIES". In connection with the Registered Exchange Offer, the Company shall: (a) mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (b) keep the Registered Exchange Offer open for not less than 30 days (or longer, if required by applicable law) after the date notice thereof is mailed to the Holders; 2 (c) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York, which may be the Trustee or an affiliate of the Trustee; (d) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer shall remain open; and (e) otherwise comply with all applicable laws. As soon as reasonably practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Company shall: (x) accept for exchange all the Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange; (y) deliver to the Trustee for cancellation all the Initial Securities so accepted for exchange; and (z) cause the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, Exchange Securities or Private Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange. As provided in the Indenture, interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial Securities. Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not include an 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, in the light of the circumstances under which they were made, not misleading. If following the date hereof there has been announced a change in Commission policy with respect to exchange offers that in the reasonable opinion of counsel to the Company raises a substantial question as to whether the Registered Exchange Offer is permitted by applicable federal law, the Company will seek a no-action letter or other favorable decision from the Commission allowing the Company to consummate the Registered Exchange Offer. The Company will pursue the issuance of such a decision to the Commission staff level. In connection with the foregoing, the Company will take all such other actions as may be requested by the Commission or otherwise required in connection with the issuance of such decision, including without limitation (i) participating in telephonic 3 conferences with the Commission, (ii) delivering to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that the Registered Exchange Offer should be permitted and (iii) diligently pursuing a resolution (which need not be favorable) by the Commission staff. 2. SHELF REGISTRATION. If, (i) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Company is not permitted to effect a Registered Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated by the 250th day after the Closing Date, (iii) any Initial Purchaser so requests with respect to the Initial Securities (or the Private Exchange Securities) not eligible to be exchanged for Exchange Securities in the Registered Exchange Offer and held by it following consummation of the Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer) is not eligible to participate in the Registered Exchange Offer or, in the case of any Holder (other than an Exchanging Dealer) that participates in the Registered Exchange Offer, such Holder does not receive freely tradeable Exchange Securities on the date of the exchange and any such Holder so requests, the Company shall take the following actions (the date on which any of the conditions described in the foregoing clauses (i) through (iv) occur, including in the case of clauses (iii) or (iv) the receipt of the required notice, being a "TRIGGER DATE"): (a) The Company shall promptly (but in no event more than 60 days after the Trigger Date (such 60th day being a "FILING DEADLINE")) file with the Commission a registration statement (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer Registration Statement, a "REGISTRATION STATEMENT") on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities, as hereinafter defined, by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the "SHELF REGISTRATION"); PROVIDED, HOWEVER, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder. (b) The Company shall use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to the 140th day after the Trigger Date. (c) The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the date of its effectiveness or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) are no longer restricted securities (as defined in Rule 144 under the Securities Act, or any successor rule thereof). The Company shall be deemed not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is required by applicable law. (d) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to 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, in light of the circumstances under which they were made, not misleading. 3. REGISTRATION PROCEDURES. In connection with any Shelf Registration contemplated by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply: 4 (a) The Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that an Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Company shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as such Initial Purchaser reasonably may propose; (ii) include the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by an Initial Purchaser, include the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange Securities received by such broker-dealer in the Registered Exchange Offer (a "PARTICIPATING BROKER-DEALER"), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchasers based upon advice of counsel (which may be in-house counsel), represent the prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include the names of the Holders who propose to sell Securities pursuant to the Shelf Registration Statement as selling securityholders. (b) The Company shall give written notice to the Initial Purchasers, the Holders of the Securities and any Participating Broker-Dealer from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made): (i) when the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein 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; (iv) of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) of the happening of any event that requires the Company to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading. (c) The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement. 5 (d) The Company shall furnish to each Holder of Securities included within the coverage of the Shelf Registration, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference). (e) The Company shall deliver to each Exchanging Dealer and each Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if any Initial Purchaser or any such Holder requests, all exhibits thereto (including those incorporated by reference). (f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement. (g) The Company shall deliver to each Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by any Initial Purchaser, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement. (h) Prior to any public offering of the Securities pursuant to any Registration Statement the Company shall register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or "blue sky" laws of such states of the United States as any Holder of the Securities reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; PROVIDED, HOWEVER, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject. (i) The Company shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement. (j) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Initial Purchasers, the Holders of the Securities and any known Participating 6 Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Initial Purchasers, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j). (k) Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, and provide the applicable trustee with certificates for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company. (l) The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12-month period. (m) The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (n) The Company may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request. (o) The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as any Holder of the Securities shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration. (p) In the case of any Shelf Registration, the Company shall (i) make reasonably available for inspection by the Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders of the Securities or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders of the Securities or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; PROVIDED, HOWEVER, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by you and on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof. 7 (q) In the case of any Shelf Registration, the Company, if requested by any Holder of Securities covered thereby, shall cause (i) its counsel to deliver an opinion and updates thereof relating to the Securities in customary form addressed to such Holder and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement (it being agreed that the matters to be covered by such opinion shall include, without limitation, the due incorporation and good standing of the Company and its subsidiaries; the qualification of the Company and its subsidiaries to transact business as foreign corporations; the due authorization, execution and delivery of the relevant agreement of the type referred to in Section 3(o) hereof; the due authorization, execution, authentication and issuance, and the validity and enforceability, of the applicable Securities; the absence of material legal or governmental proceedings involving the Company and its subsidiaries; the absence of governmental approvals required to be obtained in connection with the Shelf Registration Statement, the offering and sale of the applicable Securities, or any agreement of the type referred to in Section 3(o) hereof; the compliance as to form of such Shelf Registration Statement and any documents incorporated by reference therein and of the Indenture with the requirements of the Securities Act and the Trust Indenture Act, respectively; and, as of the date of the opinion and as of the effective date of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from such Shelf Registration Statement and the prospectus included therein, as then amended or supplemented, and from any documents incorporated by reference therein of an untrue statement of a material fact or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any such documents, in the light of the circumstances existing at the time that such documents were filed with the Commission under the Exchange Act); (ii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Securities and (iii) its independent public accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Shelf Registration Statement to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72. (r) In the case of the Registered Exchange Offer, if requested by any Initial Purchaser or any known Participating Broker-Dealer, the Company shall cause (i) its counsel to deliver to such Initial Purchaser or such Participating Broker-Dealer a signed opinion in the form set forth in Section 6(c)-(d) of the Purchase Agreement with such changes as are customary in connection with the preparation of a Registration Statement and (ii) its independent public accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Registration Statement to deliver to such Initial Purchaser or such Participating Broker-Dealer a comfort letter, in customary form, meeting the requirements as to the substance thereof as set forth in Section 6(a) of the Purchase Agreement, with appropriate date changes. (s) If a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or caused to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied. (t) The Company will use its reasonable best efforts to (a) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm such ratings will apply to the Securities covered by a Registration Statement, or (b) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any. 8 (u) In the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "RULES") of the National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules. (v) The Company shall use its reasonable best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration Statement contemplated hereby. 4. REGISTRATION EXPENSES. (a) All expenses incident to the Company's performance of and compliance with this Agreement will be borne by the Company, regardless of whether a Registration Statement is ever filed or becomes effective, including without limitation; (i) all registration and filing fees and expenses; (ii) all fees and expenses of compliance with federal securities and state "blue sky" or securities laws; (iii) all expenses of printing (including printing certificates for the Securities to be issued in the Registered Exchange Offer and the Private Exchange and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company; (v) all application and filing fees in connection with listing the Exchange Securities on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Company (including the expenses of any special audit and comfort letters required by or incident to such performance). The Company will bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any person, including special experts, retained by the Company. (b) In connection with any Registration Statement required by this Agreement, the Company will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities who are tendering Initial Securities in the Registered Exchange Offer and/or selling or reselling Securities pursuant to the "Plan of Distribution" contained in the Exchange Offer Registration Statement or the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Thelen Reid & Priest LLP unless another firm shall be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared. (c) Anything in this Agreement to the contrary notwithstanding, each Holder shall pay all underwriting discounts and commissions of any underwriters with respect to any Transfer Restricted Securities sold by it. 9 5. INDEMNIFICATION. (a) The Company agrees to indemnify and hold harmless each Holder of the Securities, any Participating Broker-Dealer and each person, if any, who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any Participating Broker-Dealer and such controlling persons are referred to collectively as the "INDEMNIFIED PARTIES") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, 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 shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; PROVIDED, HOWEVER, that (i) the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein and (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to a Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder or Participating Broker-Dealer from whom the person asserting any such losses, claims, damages or liabilities purchased the Securities concerned, to the extent that a prospectus relating to such Securities was required to be delivered by such Holder or Participating Broker-Dealer under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder or Participating Broker-Dealer results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Securities to such person, a copy of the final prospectus if the Company had previously furnished copies thereof to such Holder or Participating Broker-Dealer; PROVIDED FURTHER, HOWEVER, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Company shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders. (b) Each Holder of the Securities, severally and not jointly, will indemnify and hold harmless the Company and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company or any of its controlling persons. (c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the 10 commencement thereof; but the omission so to notify the indemnifying party will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may 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, 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 will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. Notwithstanding the foregoing, in any such proceeding, any indemnified party shall have the right to retain its own counsel, but, after notice from the indemnifying party to the indemnified party of its election to assume the defense thereof, as aforesaid, the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the exchange of the Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties 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 Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of 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 action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 5(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company. 11 (e) The agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 6. LIQUIDATED DAMAGES UNDER CERTAIN CIRCUMSTANCES. (a) Liquidated Damages (the "LIQUIDATED DAMAGES") with respect to the Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (iv) below being herein called a "REGISTRATION DEFAULT"): (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Deadline; (ii) any Registration Statement required by this Agreement is not declared effective by the Commission on or prior to the applicable Effectiveness Deadline; (iii) the Registered Exchange Offer has not been consummated on or prior to the Consummation Deadline; or (iv) any Registration Statement required by this Agreement has been declared effective by the Commission but (A) such Registration Statement thereafter ceases to be effective or (B) such Registration Statement or the related prospectus ceases to be usable in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or (2) it shall be necessary to amend such Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder. Each of the foregoing will constitute a Registration Default whatever the reason for any such event and whether it is voluntary or involuntary or is beyond the control of the Company or pursuant to operation of law or as a result of any action or inaction by the Commission . Liquidated Damages shall be: (1) with respect to the first 90-day period immediately following the occurrence of the first Registration Default, an amount equal to $0.05 per week per $1,000 principal amounts of Bonds outstanding, and (2) an additional $0.05 per week per $1,000 principal amounts of Bonds with respect to each subsequent 90-day period, up to a maximum amount of Liquidated Damages for all Registration Defaults of $0.25 per week per $1,000 principal amount of Bonds outstanding, to and including the first week in which all Registration Defaults have been cured. Liquidated Damages shall be paid by the Company or its paying agent to the Holders of the Bonds, in the Exchange Bonds, as the case may be, on each Interest Payment Date. No Liquidated Damages will be payable for any week beginning after all Registration Defaults have been cured. (b) A Registration Default referred to in Section 6(a)(iv) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Company where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events, with respect to the Company that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Company is proceeding promptly and in good faith to 12 amend or supplement such Shelf Registration Statement and related prospectus to describe such events; PROVIDED, HOWEVER, that in any case if such Registration Default occurs for a continuous period in excess of 30 days, Liquidated Damages shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured. (c) Any amounts of Liquidated Damages due pursuant to Section 6(a) will be payable in cash on the regular interest payment dates with respect to the Securities. (d) "TRANSFER RESTRICTED SECURITIES" means each Security until (i) the date on which such Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of an Initial Security for an Exchange Security, the date on which such Exchange Security is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Security has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Security is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act. 7. RULES 144 AND 144A. The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Securities, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Company by the Initial Purchasers upon request. Upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 8. UNDERWRITTEN REGISTRATIONS. If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering ("MANAGING UNDERWRITERS") will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering. No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 9. MISCELLANEOUS. (a) REMEDIES. The Company acknowledges and agrees that any failure by the Company to comply with its obligations under Section 1 and 2 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company's obligations under Sections 1 and 2 hereof. The Company further agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 13 (b) NO INCONSISTENT AGREEMENTS. The Company will not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's securities under any agreement in effect on the date hereof. (c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents; provided, however, that no such amendment, modification, supplement, waiver or consent shall change the time of payment of any installment of Liquidated Damages or reduce the amount thereof, or change the coin or currency in which Liquidated Damages are payable, without, in each case, the consent of the Holders of all affected Securities. (d) NOTICES. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery: (1) if to a Holder of the Securities, at the most current address given by such Holder to the Company. (2) if to the Initial Purchasers; Credit Suisse First Boston Corporation Eleven Madison Avenue New York, NY 10010-3629 Fax No.: (212) 325-8278 Attention: Transactions Advisory Group with a copy to: Thelen Reid & Priest LLP 40 West 57th Street New York, NY 10019 Fax No.: (212) 603-2001 Attention: J. Anthony Terrell Carolyn S. Parlato (3) if to the Company, at its address as follows: Sierra Pacific Power Company 6100 Neil Road Reno, NV 89511 Fax No.: (775) 834-5462 Attention: Richard K. Atkinson with a copy to: Choate, Hall & Stewart Exchange Place 53 State Street Boston, MA 02109-2891 Fax No.: (617) 248-4000 Attention: William C. Rogers James A. McDaniel 14 All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery. (e) THIRD PARTY BENEFICIARIES. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder. (f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the Company and its successors and assigns. (g) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. (j) SEVERABILITY. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) SECURITIES HELD BY THE COMPANY. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (l) SUBMISSION TO JURISDICTION. The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 15 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the several Initial Purchasers and the Company in accordance with its terms. Very truly yours, SIERRA PACIFIC POWER COMPANY by ________________________________________ Name: Title: The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written. CREDIT SUISSE FIRST BOSTON CORPORATION, As Representative of the several Initial Purchasers by ____________________________________ Name: Title: 16 ANNEX A Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." 17 ANNEX B Each broker-dealer that receives Exchange Securities for its own account in exchange for Initial Securities, where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution." 18 ANNEX C PLAN OF DISTRIBUTION Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 200 , all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.(1) The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. ________________________________ (1) In addition, the legend required by Item 502(e) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus. 19 ANNEX D [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ____________________________________________________ Address: _________________________________________________ If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. 20 EX-4.4 4 a2057834zex-4_4.txt EXHIBIT 4.4 EXHIBIT 4.4 SIERRA PACIFIC POWER COMPANY --------------------------------- LETTER OF TRANSMITTAL SIERRA PACIFIC POWER COMPANY IS OFFERING TO ISSUE ITS 8% GENERAL AND REFUNDING MORTGAGE BONDS, SERIES A, DUE JUNE 1, 2008 (REGISTERED UNDER THE SECURITIES ACT OF 1933) IN EXCHANGE FOR ITS 8% GENERAL AND REFUNDING MORTGAGE BONDS, SERIES A, DUE JUNE 1, 2008 (NOT REGISTERED UNDER THE SECURITIES ACT OF 1933) PURSUANT TO THE PROSPECTUS, DATED _________ , 2001 - ------------------------------------------------------------------------------- THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON __________ ___________________, 2001 UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. - ------------------------------------------------------------------------------- Delivery To: THE BANK OF NEW YORK, AS EXCHANGE AGENT By Registered or Certified Mail, Hand or Overnight By Facsimile: Courier: (212) 815-6339 The Bank of New York Reorganization Unit Confirm by Telephone: 101 Barclay Street - 7E (212) 815-3738 New York, NY 10289 Attn: Ms. Diane Amoroso Delivery of this Letter of Transmittal to an address other than as set-forth above, or transmission of this Letter of Transmittal via facsimile other than as set forth above, will not constitute a valid delivery of this Letter of Transmittal. The undersigned acknowledges that he or she has received and reviewed a prospectus, dated , 2001 (the "Prospectus"), of Sierra Pacific Power Company, a Nevada corporation (the "Company"), and this letter of transmittal (the "Letter of Transmittal"), which together constitute the Company's offer (the "Exchange Offer") to issue an aggregate principal amount of up to $320,000,000 of its 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (the "New Bonds"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), in exchange for a like principal amount of issued and outstanding 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (the "Old Bonds" and, together with the New Bonds, the "Bonds"), which were not so registered. Capitalized terms used but not defined herein have the meanings given to them to the Prospectus. In order for any Holder of Old Bonds to tender all or any portion of such Old Bonds, the Exchange Agent must receive either this Letter of Transmittal completed by such Holder or an Agent's Message (as hereinafter defined) with respect to such Holder. Certificates for Old Bonds are to be forwarded herewith or, if a tender of Old Bonds is to be made by book-entry transfer, the tender should be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company ("DTC") pursuant to the procedures set forth in the Prospectus under "The Exchange Offer-Procedures for Tendering-Registered Holders and DTC Participants". Holders of Old Bonds whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Old Bonds into the Exchange Agent's account at DTC (a "Book-Entry Confirmation") and all other documents required by this Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date, must tender their Old Bonds according to the guaranteed delivery procedures set forth in "The Exchange Offer - -Procedures for Tendering - Registered Holders and DTC Participants" section of the Prospectus. See Instruction 1. Delivery of documents to DTC does not constitute delivery to the Exchange Agent. By causing Old Bonds to be credited to the Exchange Agent's account at DTC in accordance with DTC's procedures for transfer, including the transmission by DTC of an Agent's Message to the Exchange Agent, the DTC participant will be deemed to confirm, on behalf of itself and the beneficial owners of such Old Bonds, all provisions of this Letter of Transmittal applicable to it and such beneficial owners as fully as if it had completed the information required herein and executed and delivered this Letter of Transmittal to the Exchange Agent. As used herein, the term "Agent's Message" means a message, electronically transmitted by DTC to and received by the Exchange Agent, and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgement from a Holder of Old Bonds stating that such Holder has received and agrees to be bound by, and makes each of the representations and warranties contained in, this Letter of Transmittal and, further, that such Holder agrees that the Company may enforce this Letter of Transmittal against such Holder. The term "Holder", as used in this Letter of Transmittal, means any of (a) person in whose name Old Bonds are registered on the books of the Company, (b) any other person who has obtained a properly completed bond power from the registered holder, and (c) any DTC participant whose Old Bonds are held of record by DTC. Holders who wish to tender their Old Bonds must complete this Letter of Transmittal in its entirety or must cause an Agent's Message to be transmitted. Any other beneficial owner whose Old Bonds are registered in the name of a broker or other nominee and who wishes to tender should contact such broker or nominee promptly and instruct such broker or nominee to tender on behalf of the beneficial owner. If the beneficial owner wishes to tender on its own behalf, such beneficial owner must, prior to completing and executing this Letter of Transmittal and delivering its Old Bonds, either make appropriate arrangements to register ownership of the Old Bonds in such beneficial owner's name or obtain a properly completed bond power from the registered Holder of the Old Bonds. The transfer of registered ownership may take considerable time. 2 Complete the appropriate boxes below to indicate the Old Bonds to which this Letter of Transmittal relates and the action the undersigned desires to take with respect to the Exchange Offer. If the space provided below is inadequate, the certificate numbers and principal amount of Old Bonds should be listed on a separate signed schedule affixed hereto.
- ------------------------------------------------- ----------------------- --------------------- --------------- Description of Old Bonds 1 2 3 - ------------------------------------------------- ----------------------- --------------------- --------------- Name(s) and Address(es) of Registered Holder(s) Aggregate Principal (Please fill in, if blank) Amount of Old Bond(s) Principal Amount Certificate Number(s)* Tendered** - ------------------------------------------------- ----------------------- --------------------- --------------- - ------------------------------------------------- ----------------------- --------------------- --------------- - ------------------------------------------------- ----------------------- --------------------- --------------- - ------------------------------------------------- ----------------------- --------------------- --------------- - ------------------------------------------------- ----------------------- --------------------- --------------- Total - --------------------------------------------------------------------------------------------------------------------
* Need not be completed if Old Bonds are being tendered by book-entry transfer. ** Unless otherwise indicated in the column, a holder will be deemed to have tendered ALL of the Old Bonds represented by the Old Bonds indicated in column 2. See Instruction 2. Old Bonds tendered hereby must be in denominations of principal amount of $250,000 and integral multiples of $1,000 in excess thereof. See Instruction 1. ---------------------------------------------------------------------- [ ] CHECK HERE IF TENDERED OLD BONDS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution: _______________________________________ Account Number: _______________________________________ Transaction Code Number: _______________________________________ [ ] CHECK HERE IF TENDERED OLD BONDS ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): _____________________________________ Window Ticket Number (if any): _____________________________________ Date of Execution of Notice of Guaranteed Delivery: __________________ Name of Institution which guaranteed delivery: _______________________ IF DELIVERY BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING: Account Number______________ Transaction Code Number_________________ Name of Tendering Institution_________________________________________ 3 [ ] CHECK HERE IF TENDERED OLD BONDS ARE ENCLOSED HEREWITH. [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: -------------------------------------------- Address: -------------------------------------------- -------------------------------------------- -------------------------------------------- 4 TENDER OF OLD BONDS Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the aggregate principal amount of Old Bonds indicated above. Subject to, and effective upon, the acceptance for exchange of the Old Bonds tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Bonds as are being tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact with full power of substitution, for purposes of delivering this Letter of Transmittal and the Old Bonds to the Company. The Power of Attorney granted in this paragraph shall be deemed irrevocable from and after the Expiration Date and coupled with an interest. The undersigned hereby acknowledges its full understanding that the Exchange Agent also performs functions as agent of the Company. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Old Bonds tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Company. The undersigned hereby further represents and warrants that any New Bonds acquired in exchange for Old Bonds tendered hereby will have been acquired in the ordinary course of business of the person receiving such New Bonds, whether or not such person is the undersigned, that neither the holder of such Old Bonds nor any such other person is engaged or intends to engage in, or has an arrangement or understanding with any person to participate in, the distribution (within the meaning of the Securities Act) of such New Bonds and that neither the holder of such Old Bonds nor any such other person is an "affiliate," as defined in Rule 405 under the Securities Act, of the Company. The undersigned also acknowledges that this Exchange Offer is being made by the Company in reliance on an interpretation by the staff of the Securities and Exchange Commission (the "SEC"), as set forth in no-action letters issued to third parties, that the New Bonds issued in exchange for the Old Bonds pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Bonds are acquired in the ordinary course of such holders' business and that such holders have no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of such New Bonds. The undersigned represents that it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution (within the meaning of the Securities Act) of New Bonds. If the undersigned is a broker-dealer that will receive New Bonds for its own account in exchange for Old Bonds that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Bonds; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned acknowledges that in reliance on an interpretation by the staff of the SEC, a broker-dealer may fulfill its prospectus delivery requirements with respect to the New Bonds (other than a resale of New Bonds received in exchange for an unsold allotment of Old Bonds purchased directly from the Company) with the Prospectus which constitutes part of this Exchange Offer. The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Old Bonds tendered hereby. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in "The Exchange Offer -- Withdrawal of Tenders of Old Bonds" section of the Prospectus. 5 Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, please issue the New Bonds (and, if applicable, substitute certificates representing Old Bonds for any Old Bonds not tendered or exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Old Bonds, please credit the account indicated above maintained at DTC. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" below, please send the New Bonds (and, if applicable, substitute certificates representing Old Bonds for any Old Bonds not exchanged) to the undersigned at the address shown below in the box entitled "Description of Old Bonds." The Company will be deemed to have accepted validly tendered Old Bonds when, as and if the Company shall have given oral (promptly confirmed in writing) or written notice of acceptance to the Exchange Agent. THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD BONDS" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD BONDS AS SET FORTH IN SUCH BOX ABOVE. 6 SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Old Bonds not exchanged and/or New Bonds are to be issued in the name of someone other than the person or persons whose signature(s) appear(s) below on this Letter of Transmittal, or if Old Bonds delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at DTC other than the account indicated above. Issue: New Bonds and/or Old Bonds to: - ------------------------------------------------------------------------------- Name(s): ----------------------------------------- (Please Type or Print) -------------------------------------------- (Please Type or Print) Address: -------------------------------------------- -------------------------------------------- (Zip Code) (Complete Substitute Form W-9) [ ] Credit unexchanged Old Bonds delivered by book-entry transfer to the DTC account set forth below. ------------------------------------------------------------------------------ (DTC Account Number, If Applicable) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Old Bonds not exchanged and/or New Bonds are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter below or to such person or persons at an address other than shown in the box entitled "Description of Old Bonds" on this Letter above. Mail: New Bonds and/or Old Bonds to: - ------------------------------------------------------------------------------- Name(s): -------------------------------------------- (Please Type or Print) -------------------------------------------- (Please Type or Print) Address: -------------------------------------------- -------------------------------------------- (Zip Code) IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF OR AN AGENT'S MESSAGE IN LIEU THEREOF (TOGETHER WITH THE CERTIFICATES FOR OLD BONDS OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX ABOVE 7 PLEASE SIGN HERE (TO BE COMPLETED BY ALL TENDERING HOLDERS) (Complete Accompanying Substitute Form W-9 on reverse side) Dated: x ---------------------------------------- ----------------------, 2001 x ---------------------------------------- ----------------------, 2001 Signature(s) of Owner Date Area Code and Telephone Number ------------------------------- This Letter of Transmittal must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Old Bonds hereby tendered or on a DTC security position listing or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3. Name(s): ----------------------------------------------- ----------------------------------------------- (Please Type or Print) Capacity: ----------------------------------------------- Address: ----------------------------------------------- ----------------------------------------------- (Including Zip Code) SIGNATURE GUARANTEE (If required by Instruction 3) Signature(s) Guaranteed by an Eligible Institution: ------------------------------------------ (Authorized Signature) ------------------------------------------ (Title) ------------------------------------------ (Name and Firm) ------------------------------------------ Dated 8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD BONDS; GUARANTEED DELIVERY PROCEDURES. In order for any Holder of Old Bonds to tender all or any portion of such Old Bonds, the Exchange Agent must receive either this Letter of Transmittal completed by such Holder or an Agent's Message (as hereinafter defined) with respect to such Holder. Certificates for all physically tendered Old Bonds, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter of Transmittal (or facsimile hereof or Agent's Message in lieu thereof) and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at the address set forth herein prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Old Bonds tendered hereby must be in denominations of principal amount of $250,000 and integral multiples of $1,000 in excess thereof. Holders whose certificates for Old Bonds are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent prior to the Expiration Date, or who cannot complete the procedure for book-entry tender on a timely basis, may tender their Old Bonds pursuant to the guaranteed delivery procedures set forth in the Prospectus under "The Exchange Offer-Procedures of Tendering-Registered Holders and DTC Participants." Pursuant to such procedures, (1) such tender must be made through an Eligible Institution, (2) prior to the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Company (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Old Bonds, the certificate numbers of such Old Bonds (unless tender is to be made by book-entry transfer) and the principal amount of Old Bonds tendered, stating that the tender is being made thereby and guaranteeing that within five New York Stock Exchange ("NYSE") trading days after the date of delivery of the Notice of Guaranteed Delivery, the certificates for all physically tendered Old Bonds, or a Book-Entry Confirmation, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof), with any required signature guarantees and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent, and (3) the certificates for all physically tendered Old Bonds, in the proper form for transfer, or Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof), with any required signature guarantees and all other documents required by this Letter of Transmittal, must be received by the Exchange Agent within five NYSE trading days after the date of execution of the Notice of Guaranteed Delivery. The method of delivery of Old Bonds, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the Holder, but the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that Holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure delivery to the Exchange Agent before the Expiration Date. No Old Bonds or Letters of Transmittal should be sent to Sierra Pacific Power Company. Holders may request their respective brokers, dealers, commercial banks, trust companies or nominees to effect the above transactions for such Holders. See the Prospectus under "The Exchange Offer." 2. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If less than all of the Old Bonds evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount of Old Bonds to be tendered in the box above entitled "Description of Old Bonds -- Principal Amount Tendered." A reissued certificate representing the balance of nontendered Old Bonds will be sent to such tendering holder, unless otherwise provided in the appropriate box on 9 this letter, promptly after the Expiration Date. All of the Old Bonds delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. 3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the Holder of the Old Bonds tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates or on DTC's security position listing as the holder of such Old Bonds without any change whatsoever. If any tendered Old Bonds are owned of record by two or more joint owners, all of such owners must sign this Letter. If any tendered Old Bonds are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder or holders of the Old Bonds specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the New Bonds are to be issued, or any untendered Old Bonds are to be reissued, to a person other than the registered holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificate(s) or bond powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder or holders of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the certificate(s) and signatures on such certificate(s) or bond powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any certificates representing Old Bonds or any bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted. EXCEPT AS PROVIDED BELOW, ENDORSEMENTS ON CERTIFICATES FOR OLD BONDS OR SIGNATURES ON BOND POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER OF A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST COMPANY HAVING AN OFFICE OR CORRESPONDENT IN THE UNITED STATES (AN "ELIGIBLE INSTITUTION"). SIGNATURES ON THIS LETTER OF TRANSMITTAL NEED NOT BE GUARANTEED BY AN ELIGIBLE INSTITUTION IF THE OLD BONDS ARE TENDERED: (1) BY A REGISTERED HOLDER OF OLD BONDS WHO HAS NOT COMPLETED THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" OR "SPECIAL DELIVERY INSTRUCTIONS" OR (2) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTION. Tendering Holders of Old Bonds should indicate in the applicable box the name and address to which New Bonds issued pursuant to the Exchange Offer and/or substitute certificates evidencing Old Bonds not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Old Bonds by book-entry transfer may request that Old Bonds not exchanged be credited to such account maintained at DTC as such Holder may designate hereon. If no such instructions are given, such Old Bonds not exchanged will be returned to the name or address of the person signing this Letter. 10 5. TAX IDENTIFICATION NUMBER. Federal income tax law generally requires that a tendering holder whose Old Bonds are accepted for exchange must provide the Company (as payor) with such holder's correct Taxpayer Identification Number ("TIN") on Substitute Form W-9 below, which in the case of a tendering holder who is an individual, is his or her social security number. If the Company is not provided with the current TIN or an adequate basis for an exemption, such tendering holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, delivery to such tendering holder of New Bonds may be subject to backup withholding in an amount equal to 30.5% of all reportable payments made after the exchange. If withholding results in an overpayment for taxes, a refund may be obtained. Exempt holders of Old Bonds (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed Guidelines of Certification of Taxpayer Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for additional instructions. To prevent backup withholding, each tendering Holder of Old Bonds must provide its correct TIN by completing the "Substitute Form W-9" set forth below, certifying that the Holder is a U.S. person (including a U.S. resident alien), that the TIN provided is correct (or that such Holder is awaiting a TIN) and that (1) the Holder is exempt from backup withholding, (2) the Holder has not been notified by the Internal Revenue Service that such Holder is subject to a backup withholding as a result of a failure to report all interest or dividends or (3) the Internal Revenue Service has notified the Holder that such Holder is no longer subject to backup withholding. If the tendering Holder of Old Bonds is a nonresident alien or foreign entity not subject to backup withholding, such Holder must give the Company a completed Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, or if applicable, Form W-8ECI, Certificate of Foreign Person's Claim for Exemption From Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States. These forms may be obtained from the Exchange Agent. If the Old Bonds are in more than one name or are not in the name of the actual owner, such Holder should consult the W-9 Guidelines for information on which the TIN to report. If such Holder does not have a TIN, such Holder should consult the W-9 Guidelines for instructions on applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and write "applied for" in lieu of its TIN. Note: Checking this box and writing "applied for" on the Form means that such Holder has already applied for a TIN or that such Holder intends to apply for one in the near future. If such Holder does not provide its TIN to the Company within 60 days, backup withholding will begin and continue until such Holder furnishes its TIN to the Company. 6. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable to the transfer of Old Bonds to it or its order pursuant to the Exchange Offer. If, however, New Bonds and/or substitute Old Bonds not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Bonds tendered hereby, or if tendered Old Bonds are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer of Old Bonds to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering Holder. 7. COMPANY DETERMINATION FINAL; WAIVER OF CONDITIONS. All questions as to the validity, form eligibility (including time of receipt), acceptance of tendered Old Bonds and withdrawal of tendered Old Bonds will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Bonds not properly tendered or any Old Bonds the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Old Bonds. The Company's interpretation of the terms and conditions of the Exchange Offer (including 11 the instructions in this Letter of Transmittal) shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Bonds must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Old Bonds, nor shall any of them incur any liability for failure to give such notification. Tenders of Old Bonds will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Bonds received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holders of the Old Bonds, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date. 8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering Holders of Old Bonds, by causing this Letter of Transmittal or an Agent's Message in lieu thereof to be delivered to the Exchange Agent, shall waive any right to receive notice of the acceptance of their Old Bonds for exchange. Neither the Company, the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Old Bonds nor shall any of them incur any liability for failure to give any such notice. 9. MUTILATED, LOST, STOLEN OR DESTROYED OLD BONDS. Any Holder whose Old Bonds have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the addresses indicated above for further instructions. 10. REQUESTS FOR ADDITIONAL COPIES. Requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent, at the addresses and telephone numbers indicated above. 12 TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE INSTRUCTION 5) - -------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN THE BOX TIN: _____________ Form W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING (Social Security Number or BELOW: EmployerIdentification Number) - -------------------------------------------------------------------------------------------------------------- PART 2 - TIN APPLIED FOR - -------------------------------------------------------------------------------------------------------------- DEPARTMENT OF THE TREASURY PAYOR'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFICATION INTERNAL REVENUE SERVICE CERTIFICATION:UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT (1) the number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me). (2) I am not subject to backup withholding either because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including a U.S. resident alien). (4) any other information provided on this form is true and correct. SIGNATURE: DATE: ------------------------------------ ------------- - --------------------------------------------------------------------------------------------------------------
You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to backup withholding because of underreporting of interest or dividends on your tax return and you have not been notified by the IRS that you are no longer subject to backup withholding. - -------------------------------------------------------------------------------- YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9 - -------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (a) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administrative Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number by the time of the exchange, 31 percent of all reportable payments made to me thereafter will be withheld until I provide a number. - ------------------------------------ ---------------------- Signature Date - -------------------------------------------------------------------------------- 13 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. You can get these forms from the IRS by calling 1-800-829-3676 or from the IRS's internet website at www.irs.gov. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: o An organization exempt from tax under section 501(a), or an individual retirement plan. o The United States or any agency or instrumentality thereof. o A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. o A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. o An international organization or any agency, or instrumentality thereof. Other payees that may be exempt from backup withholding include: o A corporation. o A financial institution. o A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. o A real estate investment trust. o A common trust fund operated by a bank under section 584(a). o A trust exempt from tax under section 664 or described in section 4947. o An entity registered at all times during the tax year under Investment Company Act of 1940. o A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: o Payments to nonresident aliens subject to withholding under section 1441. 14 o Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident alien partner. o Payments of patronage dividends where the amount received is not paid in money. o Payments made by certain foreign organizations. Payments of interest not generally subject to backup withholding include the following: o Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. o Payments of tax-exempt interest (including exempt-interest dividends under section 852). o Payments described in section 6049(b)(5) to non-resident aliens. o Payments on tax-free covenant bonds under section 1451. o Payments made by certain foreign organizations. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH THE PAYER A COMPLETED INTERNAL REVENUE SERVICE FORM W-8 (CERTIFICATE OF FOREIGN STATUS). Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under section 6041, 6041(A), 6045, and 6050A. Privacy Act Notice.--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Civil Penalty for False Information With Respect to Withholding.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) Criminal Penalty for Falsifying Information.--Willfully falsifying certifications or affirmations may subject you to criminal penalties fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. 15 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--Social Security Numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.
- ---------------------------------------------------------------------------------------------------------------------- FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER NUMBER OF -- IDENTIFICATION NUMBER OF -- - ---------------------------------------------------------------------------------------------------------------------- 1. An individual's account The individual 6. A valid trust, The legal entity (Do not estate, or pension furnish the identifying trust number of the personal representative or trustee unless the legal entity itself is not designated in the account title. (4) 2. Two or more individuals The actual owner of the 7. Corporate account The corporation (joint account) account or, if combined funds, the first individual on the account(1) 3. Custodian account of a The minor (2) 8. Association, club, The organization minor (Uniform Gift to religious, charitable, Minors Act) educational, or other tax-exempt organization account 4. a. The usual revocable The grantor-trustee (1) 9. Partnership account The partnership savings trust account held in the name of the (grantor is also trustee) business b. So-called trust account The actual owner (1) 10. A broker or The broker or nominee that is not a legal or registered nominee valid trust under State law 5. Sole proprietorship The owner (3) 11. Account with the The public entity account Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - ----------------------------------------------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person's number should be furnished. (2) Circle the minor's name and furnish the minor's social security number. (3) You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your SSN or EIN (if you have one). (4) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. NOTICE OF GUARANTEED DELIVERY FOR SIERRA PACIFIC POWER COMPANY This form or one substantially equivalent hereto must be used to accept the Exchange Offer of Sierra Pacific Power Company (the "Company") made pursuant to a prospectus dated ____________, 2001 (the "Prospectus"), if certificates for Old Bonds of the Company are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Company prior to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by telegram, telex, facsimile transmission, mail or hand delivery to The Bank of New York (the "Exchange Agent") as set forth below. Capitalized terms not defined herein are defined in the Prospectus. THE EXCHANGE AGENT IS THE BANK OF NEW YORK By Registered or Certified Mail, Hand or Overnight By Facsimile: Courier: (212) 815-6339 The Bank of New York Reorganization Unit Confirm by Telephone: 101 Barclay Street - 7E (212) 815-3738 New York, NY 10289 Attn: Ms. Diane Amoroso DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF THIS INSTRUMENT VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. Ladies and Gentlemen: Upon the terms and conditions set forth in the Prospectus, the undersigned hereby tenders to the Company the principal amount of Old Bonds set forth below, pursuant to the guaranteed delivery procedure described in the Prospectus under "The Exchange Offer -- Procedures for Tendering - Registered Holders and DTC Participants." Principal Amount of Old Bonds Tendered:* If Old Bonds will be delivered by book-entry transfer to The Depository Trust Company, provide account number. $------------------------------------- Certificates Nos. (if available): Account Number ______________________ Total Principal Amount Represented by Old Bonds Certificate(s): $-------------------------------------
* Must be in denominations of principal amount of $250,000 and integral multiples of $1,000 in excess thereof. See Instruction 1 in the Letter of Transmittal. - ------------------------------------------------------------------------------- ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS OF THE UNDERSIGNED. - ------------------------------------------------------------------------------- 2 PLEASE SIGN HERE X --------------------------------------------- --------------------------- X --------------------------------------------- --------------------------- Signature(s) of Owner(s) or Date Authority Signatory Telephone Number (including area code): ______________________________________ This Notice of Guaranteed Delivery must be signed by the holder(s) of Old Bonds as their name(s) appear(s) on certificates for Old Bonds or on a DTC security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. Please print name(s) and address(es) Name(s): -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- Capacity: -------------------------------------------------- Address: -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- GUARANTEE The undersigned, a member of a registered national securities exchange, or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States, hereby guarantees that the certificates representing the principal amount of Old Bonds tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such Old Bonds into the Exchange Agent's account at The Depository Trust Company pursuant to the procedures set forth in the Prospectus under "The Exchange Offer -- Procedures for Tendering - Registered Holders and DTC Participants," together with one or more properly completed and duly executed Letters of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) and any other documents required by the Letter of Transmittal in respect of the Old Bonds, will be received by the Exchange Agent at the Address set forth above, no later than five New York Stock Exchange trading days after the date of execution hereof. - ---------------------------------- --------------------------------- Name of Firm Authorized Signature - ---------------------------------- --------------------------------- Address Title Name: - ---------------------------------- ------------------------------ Zip Code (Please Type or Print) Area Code and Tel. No. Dated: --------------- ----------------------------- NOTE: DO NOT SEND CERTIFICATES FOR OLD BONDS WITH THIS FORM. CERTIFICATES FOR OLD BONDS SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL. 3 EX-5.1 5 a2057834zex-5_1.txt EXHIBIT 5.1 Exhibit 5.1 [Choate, Hall & Stewart Letterhead] August 22, 2001 Sierra Pacific Power Company P.O. Box 10100 6100 Neil Road Reno, Nevada 89520 Ladies and Gentlemen: This opinion is delivered in connection with the filing of a registration statement on Form S-4, File No. 333-_____ (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration of $320,000,000 aggregate principal amount of the Company's 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (the "New Bonds"), in connection with an offer by the Company to issue the New Bonds in exchange for the Company's 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008, that are currently outstanding in the same aggregate principal amount (the "Old Bonds"), as described in the Registration Statement. The New Bonds are to be issued pursuant to a General and Refunding Mortgage Indenture dated as of May 1, 2001 (the "Indenture"), between the Company and The Bank of New York, as Trustee (the "Trustee"), as supplemented by a First Supplemental Indenture dated as of May 1, 2001 (the "Supplemental Indenture") between the Company and the Trustee. In connection with rendering this opinion, we have examined such corporate records, certificates and other documents as we have considered necessary for the purposes of this opinion. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as copies and the authenticity of the originals of such latter documents. As to any facts material to our opinion, we have, when relevant facts were not independently established, relied upon the aforesaid records, certificates and documents. As counsel for the Company, we advise you as follows: The Company is a corporation duly organized and legally existing under the laws of the State of Nevada. Sierra Pacific August 22, 2001 Page 2 When the following steps shall have been taken, the New Bonds will be valid, legal and binding obligations of the Company: (a) Compliance with the Securities Act and the Trust Indenture Act of 1939, as amended, and action of the Securities and Exchange Commission permitting the Registration Statement to become effective; (b) Execution and filing with the Trustee of the proper papers with respect to the New Bonds; and (c) Issuance and delivery of the New Bonds in accordance with the corporate authorizations and in accordance with the terms and provisions of the Indenture (including the Supplemental Indenture). We are of the opinion that the information contained in the Registration Statement under the caption "Certain United States Federal Income Tax Considerations" constitutes an accurate description, in general terms, of the indicated federal income tax consequences to holders of the New Bonds upon their exchange of the Old Bonds for the New Bonds as contemplated in the Registration Statement. Insofar as this opinion relates to matters of law and legal conclusions governed by the laws of the State of Nevada, we base it on the opinion of Messrs. Woodburn and Wedge of Reno, Nevada, as evidenced by the opinion of such firm to be filed with the Registration Statement and the consent contained in such opinion to the statements made in the Registration Statement in regard to such firm. We hereby consent to be named in the Registration Statement and in any amendments thereto as counsel for the Company, to the statements with reference to our firm made in the Registration Statement, and to the filing and use of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ CHOATE, HALL & STEWART CHOATE, HALL & STEWART EX-5.2 6 a2057834zex-5_2.txt EXHIBIT 5.2 Exhibit 5.2 [Woodburn and Wedge Letterhead] GREGG P. BARNARD E-MAIL: gbarnard@woodburnandwedge.com DIRECT DIAL: (775) 688-3025 August 22, 2001 Sierra Pacific Power Company 6100 Neil Road P.O. Box 10100 Reno, Nevada 89520 Ladies and Gentlemen: This opinion is delivered in connection with the filing of a registration statement on Form S-4, File No. 333-_____ (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration of $320,000,000 aggregate principal amount of the Company's 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008 (the "New Bonds"), in connection with an offer by the Company to issue the New Bonds in exchange for the Company's 8% General and Refunding Mortgage Bonds, Series A, due June 1, 2008, that are currently outstanding in the same aggregate principal amount (the "Old Bonds"), as described in the Registration Statement. The New Bonds are to be issued pursuant to a General and Refunding Mortgage Indenture dated as of May 1, 2001 (the "Indenture"), between the Company and The Bank of New York, as Trustee (the "Trustee"), as supplemented by a First Supplemental Indenture dated as of May 1, 2001 (the "Supplemental Indenture") between the Company and the Trustee. As special Nevada counsel for the Company, we advise you as follows. In connection with rendering this opinion, we have examined such corporate records, certificates and other documents as we have considered necessary for the purposes of this opinion. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, conformity to the original documents of all documents submitted to us as copies and the authenticity of the originals of such latter documents. As to any facts material to our opinion, we have, when relevant facts were not independently established, relied upon the aforesaid records, certificates and documents. We are of the opinion that the Company is a corporation duly organized and legally existing under the laws of the State of Nevada and is in good standing under said laws, and that it is legally qualified to hold property and do business under said laws. Sierra Pacific Power Company August 22, 2001 Page 2 The Board of Directors of the Company has authorized the issuance and exchange of the Bonds. When the following steps shall have been taken, the New Bonds will be valid, legal and binding obligations of the Company: (a) Compliance with the Securities Act and the Trust Indenture Act of 1939, as amended, and action of the Securities and Exchange Commission permitting the Registration Statement to become effective; (b) Execution and filing with the Trustee of the proper papers with respect to the New Bonds; and (c) Issuance and delivery of the New Bonds in accordance with the corporate authorizations and in accordance with the terms and provisions of the Indenture (including the Supplemental Indenture). The foregoing opinion is limited to the matters expressly set forth herein and no opinion may be implied or inferred beyond the matters expressly stated. We disclaim any obligation to update this letter for events occurring after the date of this letter, or as a result of knowledge acquired by us after that date, including changes in any of the statutory or decisional law after the date of this letter. We are members of the bar of the State of Nevada. We express no opinion as to the effect and application of any United States federal law, rule or regulation or any securities or blue sky laws of any state, including the State of Nevada. We are not opining on, and assume no responsibility as to, the applicability to or the effect on any of the matters covered herein of the laws of any other jurisdiction, other than the laws of Nevada as presently in effect. The law firm of Choate, Hall & Stewart may rely on our opinions set forth above in connection with the opinion to be delivered by them in connection with the Registration Statement We hereby consent: 1. To being named in the Registration Statement and in any amendments thereto as counsel for the Company; 2. To the statements with reference to our firm made in the Registration Statement; and 3. To the filing of this opinion as an exhibit to the Registration Statement. Sincerely, WOODBURN and WEDGE By: /s/ Gregg P. Barnard ------------------------ Gregg P. Barnard EX-23.1 7 a2057834zex-23_1.txt EXHIBIT 23.1 Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Sierra Pacific Power Company on Form S-4 of our report dated February 23, 2001 (March 9, 2001 as to Note 20) appearing in the Annual Report on Form 10-K of Sierra Pacific Power Company for the year ended December 31, 2000 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. Deloitte & Touche LLP Reno, Nevada August 21, 2001 EX-25.1 8 a2057834zex-25_1.txt EXHIBIT 25.1 Exhibit 25.1 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- Sierra Pacific Power Company (Exact name of obligor as specified in its charter) Delaware 88-0044418 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Sierra Pacific Power Company P.O. Box 10100 6100 Neil Blvd. Reno, NV 89520 (Address of principal executive offices) (Zip code) --------------------------- 8% General and Refunding Mortgage Bonds Series A due 6/1/08 (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - ----------------------------------- -------------------------------------------- Name Address - ----------------------------------- -------------------------------------------- Superintendent of Banks of 2 Rector Street, New York, N.Y. the State of New York 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) -2- 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility 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 21st day of August, 2001. THE BANK OF NEW YORK By: /s/MARY LAGUMINA -------------------------------------- Name: MARY LAGUMINA Title: VICE PRESIDENT -4- EXHIBIT 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2001, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin . $ 2,811,275 Interest-bearing balances .......................... 3,133,222 Securities: Held-to-maturity securities ........................ 147,185 Available-for-sale securities ...................... 5,403,923 Federal funds sold and Securities purchased under agreements to resell ............................... 3,378,526 Loans and lease financing receivables: Loans and leases held for sale ..................... 74,702 Loans and leases, net of unearned income ........................................... 37,471,621 LESS: Allowance for loan and lease losses ..................................... 599,061 Loans and leases, net of unearned income and allowance ............................. 36,872,560 Trading Assets ........................................ 11,757,036 Premises and fixed assets (including capitalized leases) ............................................ 768,795 Other real estate owned ............................... 1,078 Investments in unconsolidated subsidiaries and associated companies ............................... 193,126 Customers' liability to this bank on acceptances outstanding ........................................ 592,118 Intangible assets Goodwill ........................................... 1,300,295 Other intangible assets ............................ 122,143 Other assets .......................................... 3,676,375 ----------- Total assets .......................................... $70,232,359 =========== LIABILITIES Deposits: In domestic offices ................................ $25,962,242 Noninterest-bearing ................................ 10,586,346 Interest-bearing ................................... 15,395,896 In foreign offices, Edge and Agreement subsidiaries, and IBFs ........................... 24,862,377 Noninterest-bearing ................................ 373,085 Interest-bearing ................................... 24,489,292 Federal funds purchased and securities sold under agreements to repurchase ........................... 1,446,874 Trading liabilities ................................... 2,373,361 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases) .......................... 1,381,512 Bank's liability on acceptances executed and outstanding ........................................ 592,804 Subordinated notes and debentures ..................... 1,646,000 Other liabilities ..................................... 5,373,065 ----------- Total liabilities ..................................... $63,658,235 =========== EQUITY CAPITAL Common stock .......................................... 1,135,284 Surplus ............................................... 1,008,773 Retained earnings ..................................... 4,426,033 Accumulated other comprehensive income ................ 4,034 Other equity capital components ....................... 0 ----------- Total equity capital .................................. 6,574,124 ----------- Total liabilities and equity capital .................. $70,232,359 ===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi ----| Gerald L. Hassell | Directors Alan R. Griffith ----| - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----