Common use of Limitation on Indebtedness and Preferred Stock Clause in Contracts

Limitation on Indebtedness and Preferred Stock. The Issuer shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee, permit to be outstanding or otherwise be or become directly or indirectly liable, contingently or otherwise, with respect to any Indebtedness (including Acquired Debt), and the Issuer will not issue or have in issue any Disqualified Stock and will not permit any of its Subsidiaries to issue or have in issue any shares of Preferred Stock or any shares of Disqualified Stock, other than, in each case, any Permitted Debt. For the purposes of determining compliance with this covenant: (1) the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any Guarantee, indemnity, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded to the extent of the outstanding principal amount of such Indebtedness included in any clause of the definition of Permitted Debt; (2) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, shall classify such item of Indebtedness and shall only be required to include the amount and type of such Indebtedness in one of the clauses of the definition of Permitted Debt; and (3) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date). For purposes of determining compliance with any United States dollar-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than United States dollars, the amount of such Indebtedness shall be the Dollar Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date).

Limitation on Indebtedness and Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee, permit to be outstanding or otherwise be or become directly or indirectly liable, contingently or otherwise, with respect to Incur any Indebtedness (including Acquired DebtIndebtedness), and the Issuer will Company shall not permit any Restricted Subsidiary to issue Preferred Stock, provided that the Company, any Subsidiary Guarantor or have in issue any JV Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) and any Non-Guarantor Subsidiary may Incur Permitted Subsidiary Indebtedness if, after giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, (x) no Default has occurred and is continuing and (y) the Fixed Charge Coverage Ratio would not be less than 2.0 to 1.0. Notwithstanding the foregoing, the Company shall not permit any Restricted Subsidiary to Incur any Disqualified Stock (other than Disqualified Stock of Restricted Subsidiaries held by the Company or a Subsidiary Guarantor, so long as it is so held). (b) Notwithstanding the foregoing, the Company and, to the extent provided below, any Restricted Subsidiary may Incur each and will not permit all of the following (“Permitted Indebtedness”): (i) Indebtedness under the Notes (excluding any Additional Notes and any Permitted Pari Passu Secured Indebtedness of its Subsidiaries to issue or have in issue the Company) and each Subsidiary Guarantee and JV Subsidiary Guarantee; (ii) any shares of Preferred Stock Pari Passu Subsidiary Guarantees by any Subsidiary Guarantor or any shares JV Subsidiary Guarantor; (iii) Indebtedness of Disqualified Stock, the Company or any Restricted Subsidiary outstanding on the Original Issue Date excluding Indebtedness permitted under clause (iv) below; provided that such Indebtedness of Non-Guarantor Subsidiaries shall be included in the calculation of Permitted Subsidiary Indebtedness; (iv) Indebtedness of the Company or any Restricted Subsidiary owed to the Company or any Restricted Subsidiary; provided that (i) any event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other thanthan to the Company or any Restricted Subsidiary) shall be deemed, in each case, to constitute an Incurrence of such Indebtedness not permitted by this clause (d) and (ii) if the Company is the obligor on such Indebtedness, such Indebtedness must expressly be subordinated in right of payment to the Notes, and if a Subsidiary Guarantor or a JV Subsidiary Guarantor is the obligor on such Indebtedness and the Company is not the obligee, such Indebtedness must be expressly subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor or the JV Subsidiary Guarantee of such JV Subsidiary Guarantor, as the case may be; (v) Indebtedness of the Company or any Restricted Subsidiary (“Permitted Debt. Refinancing Indebtedness”) issued in exchange for, or the net proceeds of which are used to refinance or refund, replace, exchange, renew, repay, defease, discharge or extend (collectively, “refinance” and “refinances” and “refinanced” shall have a correlative meaning), then outstanding Indebtedness Incurred under the immediately preceding paragraph (a) or clause (i), (ii), (iii), (viii), (xvi), (xvii), (xviii) or (xix) of this paragraph (b) and any refinancings thereof in an amount not to exceed the amount so refinanced (plus premiums, accrued interest, fees and expenses); provided that (1) Indebtedness the proceeds of which are used to refinance the Notes or Indebtedness that is pari passu with, or subordinated in right of payment to, the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee shall only be permitted under this clause (v) if (A) in case the Notes are refinanced in part or the Indebtedness to be refinanced is pari passu with the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made pari passu with, or subordinate in right of payment to, the remaining Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, as the case may be, or (B) in case the Indebtedness to be refinanced is subordinated in right of payment to the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made subordinate in right of payment to the Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, as the case may be, at least to the extent that the Indebtedness to be refinanced is subordinated to the Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, (2) such new Indebtedness, determined as of the date of Incurrence of such new Indebtedness, does not mature prior to the Stated Maturity of the Indebtedness to be refinanced, and the Average Life of such new Indebtedness is at least equal to the remaining Average Life of the Indebtedness to be refinanced, (3) in no event may Indebtedness of the Company, any Subsidiary Guarantor or any JV Subsidiary Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor or a JV Subsidiary Guarantor, and (4) in no event may Indebtedness of the Company or any Subsidiary Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any JV Subsidiary Guarantor; (vi) Indebtedness Incurred by the Company or any Restricted Subsidiary pursuant to Hedging Obligations designed solely to reduce or manage the exposure of the Company or any Restricted Subsidiary to fluctuations in commodity prices, interest rates or foreign currency exchange rates; (vii) Pre-Registration Mortgage Guarantees by the Company or any Restricted Subsidiary; (viii) Indebtedness Incurred by the Company or any Restricted Subsidiary for the purpose of financing (x) all or any part of the purchase price of assets, real or personal property (including the lease purchase price of land use rights) or equipment to be used in the ordinary course of business by the Company or a Restricted Subsidiary, including any such purchase through the acquisition of Capital Stock of any Person that owns such real or personal property or equipment which will, upon acquisition, become a Restricted Subsidiary, or (y) all or any part of the purchase price or the cost of development, construction or improvement of assets, real or personal property (including the lease purchase price of land use rights) or equipment to be used in the ordinary course of business by the Company or such Restricted Subsidiary; provided that, in the case of clauses (x) and (y), (A) the aggregate principal amount of such Indebtedness shall not exceed such purchase price or cost, (B) such Indebtedness shall be Incurred no later than 180 days after the acquisition of such asset, property or equipment or completion of such development, construction or improvement and (C) on the date of the Incurrence of such Indebtedness and after giving effect thereto, the sum of (1) the aggregate principal amount outstanding of all such Indebtedness permitted by this clause (viii) (together with refinancings thereof, but excluding any Contractor Guarantee Incurred under this clause (viii) to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) plus (2) the aggregate amount outstanding of all Indebtedness permitted and then outstanding under clauses (xvi), (xvii), (xx) and (xxii) below (together with any refinancings thereof) does not exceed an amount equal to 60.0% of Total Assets; (ix) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to workers’ compensation claims or self- insurance obligations or bid, performance or surety bonds (in each case other than for an obligation for borrowed money); (x) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit or trade guarantees issued in the ordinary course of business to the extent that such letters of credit or trade guarantees are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than 30 days following receipt by the Company or such Restricted Subsidiary of a demand for reimbursement; (xi) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or any Restricted Subsidiary pursuant to such agreements, in any case, Incurred in connection with the disposition of any business, assets or Restricted Subsidiary, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that, the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or any Restricted Subsidiary from the disposition of such business, assets or Restricted Subsidiary; (xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business provided, that such Indebtedness is extinguished within five Business Days of Incurrence; (xiii) (A) Guarantees by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant (B) Guarantees by any Restricted Subsidiary of Indebtedness of another Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant, or (C) Guarantees by any JV Subsidiary Guarantor of Indebtedness of any other JV Subsidiary Guarantor that is a direct or indirect Subsidiary or parent of such JV Subsidiary Guarantor, which Indebtedness was permitted to be Incurred by another provision of this covenant; (xiv) Indebtedness of the Company or any Restricted Subsidiary maturing within one year; provided that, the aggregate principal amount of Indebtedness permitted by this clause (xiv) at any time outstanding does not exceed US$50.0 million (or the Dollar Equivalent thereof); (xv) Indebtedness of the Company or any Restricted Subsidiary constituting an obligation to pay the deferred purchase price of Capital Stock of a Restricted Subsidiary pursuant to a Staged Acquisition Agreement, to the extent that such deferred purchase price is paid within 12 months after the date the Company or such Restricted Subsidiary enters into such Staged Acquisition Agreement; (xvi) Indebtedness Incurred or Preferred Stock issued by the Company or any Restricted Subsidiary arising from any Investment made by a Trust Company Investor in a Restricted Subsidiary; provided that, on the date of Incurrence of all such Indebtedness or issuance of such Preferred Stock and after giving effect thereto, the sum of (1) the aggregate amount outstanding of all Indebtedness and Preferred Stock permitted under this clause (xvi) plus (2) the aggregate principal amount outstanding of all Indebtedness permitted under clause (viii) above and clauses (xvii), (xx) and (xxii) below (together with refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) above to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) does not exceed an amount equal to 60.0% of Total Assets; (xvii) Bank Deposit Secured Indebtedness Incurred by the Company or any Restricted Subsidiary; provided that, on the date of the Incurrence of such Indebtedness and after giving effect thereto, the sum of (1) the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to this clause (xvii) (together with any refinancings thereof), plus (2) the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to clauses (viii) and (xvi) above and clauses (xx) and (xxii) below (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) above to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount), does not exceed an amount equal to 60.0% of Total Assets; (xviii) Indebtedness Incurred by any Restricted Subsidiary which is secured by Investment Properties; provided that, on the date of the Incurrence of all such Indebtedness and after giving effect thereto, the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to this clause (xviii) (together with any refinancings thereof) does not exceed an amount equal to 10.0% of Total Assets; (xix) Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount outstanding at any time (together with refinancings thereof) not to exceed US$15.0 million (or the Dollar Equivalent thereof); (xx) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting a Guarantee of Indebtedness of any Person (other than the Company or a Restricted Subsidiary) by the Company or such Restricted Subsidiary; provided that, on the date of the Incurrence of all such Indebtedness and after giving effect thereto, (1) the aggregate principal amount outstanding of all such Indebtedness Incurred under this clause (xx) (together with any refinancing thereof), plus (2) the aggregate principal amount outstanding of all Indebtedness Incurred pursuant to clauses (viii), (xvi) and (xvii) above and clause (xxii) below (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount), does not exceed an amount equal to 60.0% of Total Assets; (xxi) Indebtedness Incurred by the Company or a Restricted Subsidiary constituting a Subordinated Shareholder Loan; and (xxii) Acquired Indebtedness of any Restricted Subsidiary Incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary (other than Indebtedness Incurred (A) to provide all or any portion of the funds utilized to consummate the transaction or series of transactions pursuant to which a Person becomes a Restricted Subsidiary or (B) otherwise in contemplation of a Person becoming a Restricted Subsidiary or any such acquisition); provided that, on the date of the Incurrence of all such Indebtedness and after giving effect thereto, (1) the aggregate principal amount outstanding of all such Indebtedness Incurred under this clause (xxii) (together with any refinancings thereof), plus (2) the aggregate principal amount outstanding of all Indebtedness Incurred pursuant to clauses (viii), (xvi), (xvii) and (xx) above (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (vii) to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) does not exceed an amount equal to 60.0% of Total Assets. (c) For the purposes of determining compliance with this covenant: (1) the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any GuaranteeSection 4.05, indemnity, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded to the extent of the outstanding principal amount of such Indebtedness included in any clause of the definition of Permitted Debt; (2) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted DebtIndebtedness described above, including under the proviso in Section 4.05(a), the IssuerCompany, in its sole discretion, shall classify classify, and from time to time may reclassify, such item of Indebtedness and shall only be required to include the amount and type as one or more of such Indebtedness in one of the clauses of the definition of Permitted Debt; andtypes. (3d) Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that may be Incurred pursuant to this covenant will not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to the result of fluctuations in the event that an item exchange rates of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date). For purposes of determining compliance with any United States dollar-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than United States dollars, the amount of such Indebtedness shall be the Dollar Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date)currencies.

Limitation on Indebtedness and Preferred Stock. The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee, permit to be outstanding Guarantee or otherwise be or become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt)Indebtedness, and the Issuer Company will not issue or have in issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company or have in a Restricted Subsidiary of the Company may incur Indebtedness, the Company may issue Disqualified Stock and any shares Restricted Subsidiary of the Company may issue Preferred Stock if, on the date of such incurrence and after giving effect thereto, the Consolidated Coverage Ratio equals or exceeds 2.0 to 1.0; provided, further, that the amount of Indebtedness that may be incurred and the Preferred Stock that may be issued pursuant to the foregoing by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed at any one time outstanding the greater of (a) $200.0 million and (b) 2.0% of the Company’s ACNTA. The limitation described in the preceding paragraph shall not prohibit the incurrence of the following Indebtedness by the Company or any shares of its Restricted Subsidiaries or the issuance of Disqualified Stock, other thanStock by the Company or Preferred Stock by any Restricted Subsidiary of the Company (“Permitted Debt”): (1) Indebtedness of the Company or any of its Restricted Subsidiaries (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not exceeding the greater of (a) $2.5 billion and (b) the sum of $1.0 billion plus 30.0% of the Company’s ACNTA as of the date of such incurrence; (2) Indebtedness owed to and Preferred Stock issued to and, in each case, held by the Company or any Permitted Debt. For of its Restricted Subsidiaries; provided that any subsequent issuance or transfer of any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary of the purposes Company or any subsequent transfer of determining such Indebtedness or Preferred Stock (other than to the Company or another Restricted Subsidiary of the Company) shall be deemed, in each case, to constitute the incurrence of such Indebtedness or the issuance of such Preferred Stock not permitted by this clause (2); (3) the Securities (other than any Additional Securities) and the Subsidiary Guarantees related thereto; (4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in clauses (1), (2) and (3) of this paragraph); (5) Refinancing Indebtedness in respect of Indebtedness incurred by the Company or any of its Restricted Subsidiaries in exchange for, or the net proceeds of which are used to Refinance any Indebtedness (other than intercompany Indebtedness), Disqualified Stock or Preferred Stock, as applicable, that was permitted by this Indenture to be incurred or issued pursuant to the first paragraph of this covenant or pursuant to clauses (3) and (4) of this paragraph and this clause (5); (6) Indebtedness represented by Capital Lease Obligations, mortgage financings, purchase money obligations or other Indebtedness, in each case incurred for the purpose of financing all or any part of the price or cost of design, construction, installation, development, repair or improvement of plant, property or equipment used in the business of the Company or any of its Restricted Subsidiaries, and Refinancing Indebtedness thereof, in an aggregate principal amount, when taken together with the outstanding amount of all other Indebtedness or Refinancing Indebtedness incurred pursuant to this clause (6), not to exceed at any time outstanding under this clause (6) the greater of (a) $250.0 million and (b) 5.0% of the Company’s ACNTA at the time of any incurrences under this clause (6); (7) Guarantees by the Company or a Restricted Subsidiary of the Company of any Indebtedness of the Company or any Restricted Subsidiary of the Company that is permitted to be incurred by another provision of this covenant and could have been incurred (in compliance with this covenant:) by the Person so Guaranteeing such Indebtedness; provided, however, that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Securities, then the Subsidiary Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed; (18) Indebtedness under Hedging Contracts, Interest Rate Agreements and Currency Agreements entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business and not for speculation; (9) Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar obligations and completion guarantees provided by or for the account of the Company or any Restricted Subsidiary of the Company in the ordinary course of business, and any Guarantees and letters of credit functioning as or supporting any of the foregoing in the ordinary course of business; (10) Permitted Marketing Obligations; (11) in-kind obligations relating to oil or natural gas balancing positions arising in the ordinary course of business; (12) Indebtedness of a Receivables Subsidiary incurred in a Qualified Receivables Transaction; (13) liability in respect of the Indebtedness of any Unrestricted Subsidiary of the Company or any Joint Venture but only to the extent that such liability is the result of (a) the outstanding Company’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as Guarantor of such Indebtedness, provided that, after giving effect to any such incurrence, the aggregate principal amount of any particular all Indebtedness shall be counted only once incurred under this clause (13) and any obligation arising under any Guaranteethen outstanding does not exceed $25.0 million, indemnity, Lien, letter or (b) the pledge of credit (or similar instrument supporting a Guarantee limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by the Company or such Restricted Subsidiary to secure such Indebtedness shall be disregarded and solely to the extent of the outstanding principal amount of such Indebtedness included in any clause of the definition of Permitted constitutes Non-Recourse Debt; (214) Permitted Acquisition Indebtedness; and (15) Indebtedness of the Company or any Restricted Subsidiary of the Company or the issuance of any Disqualified Stock by the Company or Preferred Stock by any Restricted Subsidiary in an aggregate amount not exceeding, at any one time outstanding, including any Refinancing Indebtedness thereof, the greater of (i) $500.0 million and (ii) 10.0% of the Company’s ACNTA at the time of any incurrence under this clause (15). In the event that an item of Indebtedness meets the criteria of more than one of the types categories of Permitted DebtIndebtedness described in clauses (1) through (15) of the preceding paragraph or is entitled to be incurred pursuant to the first paragraph of this covenant, the IssuerCompany shall, in its sole discretion, shall divide, classify or reclassify (or later divide, classify, redivide or reclassify) such item of Indebtedness in any manner that complies with this covenant (including splitting into multiple exceptions) and shall will only be required to include the amount and type of such Indebtedness in one of the such clauses of the preceding paragraph or pursuant to the first paragraph of this covenant; provided that Indebtedness of the Company and any of its Restricted Subsidiaries outstanding under the Credit Agreement as of the Issue Date shall initially be deemed to have been incurred pursuant to clause (1) of the preceding paragraph. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant; provided that the amount thereof shall be included in the calculation Consolidated Interest Expense of the Company as accrued to the extent required by the definition of Permitted Debt; and (3) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date). For purposes of determining compliance with any United States dollar-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than United States dollars, the amount of such Indebtedness shall be the Dollar Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date)term.

Limitation on Indebtedness and Preferred Stock. The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee, permit to be outstanding Guarantee or otherwise be or become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt)Indebtedness, and the Issuer Company will not issue or have in issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company or have in a Restricted Subsidiary of the Company may incur Indebtedness, the Company may issue Disqualified Stock and any shares Restricted Subsidiary of the Company may issue Preferred Stock if, on the date of such incurrence and after giving effect thereto, the Consolidated Coverage Ratio equals or exceeds 2.0 to 1.0; provided, further, that the amount of Indebtedness that may be incurred and the Preferred Stock that may be issued pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed at any one time outstanding the greater of (a) $200.0 million and (b) 2.0% of the Company’s ACNTA. The limitation described in the preceding paragraph shall not prohibit the incurrence of the following Indebtedness by the Company or any shares of its Restricted Subsidiaries or the issuance of Disqualified Stock, other thanStock by the Company or Preferred Stock by any Restricted Subsidiary of the Company (“Permitted Debt”): (1) Indebtedness of the Company or any of its Restricted Subsidiaries (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not exceeding the greater of (a) $2.5 billion and (b) the sum of $500.0 million plus 30.0% of the Company’s ACNTA as of the date of such incurrence; (2) Indebtedness owed to and Preferred Stock issued to and, in each case, held by the Company or any Permitted Debt. For the purposes of determining compliance with this covenant: (1) the outstanding principal amount its Restricted Subsidiaries; provided that any subsequent issuance or transfer of any particular Indebtedness shall Capital Stock which results in any such Restricted Subsidiary ceasing to be counted only once and any obligation arising under any Guarantee, indemnity, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded to the extent a Restricted Subsidiary of the outstanding principal amount Company or any subsequent transfer of such Indebtedness included in any clause or Preferred Stock (other than to the Company or another Restricted Subsidiary of the definition of Permitted Debt; (2Company) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuershall be deemed, in its sole discretioneach case, shall classify such item of Indebtedness and shall only be required to include the amount and type of such Indebtedness in one of the clauses of the definition of Permitted Debt; and (3) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of constitute the incurrence of such Indebtedness or the issuance of such Preferred Stock not permitted by this clause (or, if later2); (3) the Securities (other than any Additional Securities), the Subsidiary Guarantees related thereto, the Exchange Securities and any Exchange Guarantees related thereto; (4) Indebtedness outstanding on the Issue DateDate (other than Indebtedness described in clauses (1). For purposes , (2) and (3) of determining this paragraph); (5) Refinancing Indebtedness in respect of Indebtedness incurred by the Company or any of its Restricted Subsidiaries in exchange for, or the net proceeds of which are used to Refinance any Indebtedness (other than intercompany Indebtedness), Disqualified Stock or Preferred Stock, as applicable, that was permitted by this Indenture to be incurred or issued pursuant to the first paragraph of this covenant or pursuant to clauses (3) and (4) of this paragraph and this clause (5); (6) Indebtedness represented by Capital Lease Obligations, mortgage financings, purchase money obligations or other Indebtedness, in each case incurred for the purpose of financing all or any part of the price or cost of design, construction, installation, development, repair or improvement of plant, property or equipment used in the business of the Company or any of its Restricted Subsidiaries, and Refinancing Indebtedness thereof, in an aggregate principal amount, when taken together with the outstanding amount of all other Indebtedness or Refinancing Indebtedness incurred pursuant to this clause (6), not to exceed at any time outstanding under this clause (6) the greater of (a) $500.0 million and (b) 5.0% of the Company’s ACNTA at the time of any incurrences under this clause (6); (7) Guarantees by the Company or a Restricted Subsidiary of the Company of any Indebtedness of the Company or any Restricted Subsidiary of the Company that is permitted to be incurred by another provision of this covenant and could have been incurred (in compliance with any United States dollar-denominated restriction on this covenant) by the Person so Guaranteeing such Indebtedness; provided, however, that if the Indebtedness incurred being Guaranteed is denominated subordinated to or pari passu with the Securities, then the Subsidiary Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed; (8) Indebtedness under Hedging Contracts, Interest Rate Agreements and Currency Agreements entered into in a currency other than United States dollars, the amount ordinary course of such Indebtedness shall be business for the Dollar Equivalent, determined on purpose of limiting risks that arise in the date ordinary course of the incurrence of such Indebtedness (or, if later, the Issue Date).business and not for speculation;

Limitation on Indebtedness and Preferred Stock. The Issuer shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create(i) Create, incur, issue, assume, Guarantee, permit to be outstanding Guarantee or otherwise be or become directly or indirectly liable, contingently or otherwiseotherwise (collectively, "incur"), with respect to any Indebtedness (including Acquired Debt), and the Issuer will not issue or have in issue any Disqualified Stock and will not permit or, in the case of any Subsidiary of its Subsidiaries to issue or have in the Borrower, issue any shares of Preferred Stock preferred stock; provided, however, that the Borrower may incur Indebtedness (including Acquired Debt) or any shares of issue Disqualified Stock, other thanand the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock if the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. (ii) Section 8.2(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (A) the incurrence by the Borrower of Indebtedness pursuant to any Loan Document, the aggregate principal amount of which is evidenced by the General and Refunding Mortgage Bonds, and the incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee of such Indebtedness pursuant to Section 8.2(o); (B) the incurrence by the Borrower and its Subsidiaries of the Existing Indebtedness; (C) the incurrence by the Borrower or any of the Subsidiary Guarantors of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Borrower or such Subsidiary Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (C), not to exceed $20,000,000 at any time outstanding; (D) the incurrence by the Borrower or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was incurred under Section 8.2(a)(i) or clauses (B), (C) or (J) of this Section 8.2(a)(ii); (E) the incurrence by the Borrower or any of its Subsidiaries of intercompany Indebtedness between or among the Borrower, any of its Subsidiaries, Sierra Pacific Resources or Nevada Power Company; provided, however, that: (I) if the Borrower is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Loans and other Obligations, unless such Indebtedness constitutes ordinary course intercompany payables; (II) if a Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of such Subsidiary Guarantor's Subsidiary Guarantee; (III) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Borrower or a Subsidiary of the Borrower and (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Borrower or a Subsidiary of the Borrower shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Borrower or such Subsidiary, as the case may be, that was not permitted by this clause (E); and (IV) any Indebtedness issued by the Borrower or a Subsidiary to a Trust Preferred Vehicle shall not be treated as intercompany Indebtedness for purposes of this clause (E) to the extent of the face amount of the beneficial interests of the Trust Preferred Vehicle that are not held by the Borrower or any of its Subsidiaries; (F) the incurrence by the Borrower or any of its Subsidiaries of Hedging Obligations or any Indebtedness pursuant to a Hedge Agreement, in each case, incurred in the normal course of business and not for speculative purposes; (G) the Guarantee by the Borrower or any of its Subsidiaries of Indebtedness of the Borrower or any Subsidiary of the Borrower that was permitted to be incurred by another provision of this Section 8.2(a); provided that in the event the Indebtedness that is being Guaranteed is Subordinated Debt, then the Guarantee of that Indebtedness shall be subordinated in right of payment to the Loans and other Obligations on substantially identical terms; (H) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of such Disqualified Stock, each of which will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 8.2(a); provided, in each such case, that the amount thereof is included in the Fixed Charges of the Borrower as accrued; (I) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Borrower or any Subsidiary of the Borrower in the ordinary course of business, including Guarantees or obligations of the Borrower or any Subsidiary of the Borrower with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); (J) the incurrence by the Borrower of additional Indebtedness consisting of securities issued pursuant to the General and Refunding Mortgage Indenture in respect of claims relating to the Borrower's obligations pursuant to agreements with gas, electric power and other energy suppliers that have been terminated as of Closing Date; (K) the incurrence by the Borrower or any of its Subsidiaries of additional Indebtedness consisting of letters of credit for purposes of supporting the Borrower's or any such Subsidiary's obligations now or hereafter owing to gas, electric power or other energy suppliers, not to exceed $20,000,000 at any time outstanding; (L) the incurrence by the Borrower of additional Indebtedness to finance capital expenditures incurred pursuant to the Borrower's 2004 Integrated Resource Plan as approved or amended under order by the PUCN or the CPUC (as applicable) or mandated by statute or by one or more federal or state regulatory authorities, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (L); and (M) the incurrence by the Borrower or any Subsidiary of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (M), not to exceed $50,000,000 at any time outstanding. (iii) Notwithstanding anything to the contrary in this Agreement, the Borrower will not issue any additional notes or bonds under its First Mortgage Indenture. (iv) The Borrower will not incur any Indebtedness (including Permitted Debt. ) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower unless such Indebtedness is also contractually subordinated in right of payment to the Loans and other Obligations on substantially identical terms; provided, however, that no Indebtedness of the Borrower will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower solely by virtue of being secured on a junior basis or by virtue of being unsecured. (v) For the purposes of determining compliance with this covenant:Section 8.2(a): (1) the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any Guarantee, indemnity, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded to the extent of the outstanding principal amount of such Indebtedness included in any clause of the definition of Permitted Debt; (2A) in the event that an item of Indebtedness proposed Indebtedness, including Acquired Debt, meets the criteria of more than one of the types categories of Permitted DebtDebt described in clauses (A) through (M) of Section 8.2(a)(ii), or is entitled to be incurred pursuant to Section 8.2(a)(i), the IssuerBorrower will be permitted to classify (or later classify or reclassify such Indebtedness, in whole or in part in its sole discretion, shall classify ) such item of Indebtedness and shall only be required to include the amount and type of such Indebtedness in one of the clauses of the definition of Permitted Debtany manner that complies with this Section 8.2(a); and (3B) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with respect to any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date). For purposes of determining compliance with any United States dollar-denominated restriction on Indebtedness, if the incurrence of Indebtedness incurred is denominated in a currency other than United States dollarsforeign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the Dollar Equivalent, determined relevant currency exchange rate in effect on the date of the incurrence of that such Indebtedness (or, if later, the Issue Date)was incurred.

Limitation on Indebtedness and Preferred Stock. (a) The Issuer shall Company will not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee, permit to be outstanding guarantee or otherwise be or in any manner become directly or indirectly liable, contingently or otherwise, with respect to for the payment of (collectively "incur") any Indebtedness (including any Acquired DebtIndebtedness), other than Permitted Indebtedness, and the Issuer will not issue or have in issue any Disqualified Stock and will Company shall not permit any of its Restricted Subsidiaries to issue or have in issue any shares of Preferred Stock or any shares of Disqualified Stock, preferred stock (other than, in each casethan to the Company, any Guarantor or the immediate parent of any Restricted Subsidiary), provided, however, that the Company may incur Indebtedness (including any Acquired Indebtedness) in addition to Permitted Debt. For the purposes of determining compliance with this covenant: Indebtedness and Restricted Subsidiaries may issue preferred stock, if: (1x) the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any Guarantee, indemnity, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded to Company's Consolidated Fixed Charge Coverage Ratio for the extent of the outstanding principal amount of such Indebtedness included in any clause of the definition of Permitted Debt; (2) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, shall classify such item of Indebtedness and shall only be required to include the amount and type of such Indebtedness in one of the clauses of the definition of Permitted Debt; and (3) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of four full fiscal quarters for which interim financial statements are available immediately preceding the incurrence of such Indebtedness (or, if later, or the Issue Date). For purposes of determining compliance with any United States dollar-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than United States dollars, the amount issuance of such Indebtedness shall be the Dollar Equivalentpreferred stock, determined on the date of taken as one period (and after giving pro forma effect to: (i) the incurrence of such Indebtedness or the issuance of such preferred stock, as the case may be, and (orif applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness was incurred or such preferred stock was issued and the application of such proceeds occurred at the beginning of such four-quarter period; (ii) the incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; and (iii) notwithstanding clause (d) of the definition of Consolidated Adjusted Net Income, the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity, business or division, or assets constituting any of the foregoing, acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, since the first day of such four-quarter period, as if such acquisition or disposition occurred at the beginning of such four-quarter period), would have been at least equal to 2.25 to 1.0, and (y) if such Indebtedness is Subordinated Indebtedness, such Indebtedness shall have an Average Life longer than the Average Life of the Securities and a final Stated Maturity of principal later than the final Stated Maturity of principal of the Securities. (b) The Company will not permit any Restricted Subsidiary to incur any Indebtedness (including any Acquired Indebtedness), other than Permitted Subsidiary Indebtedness provided, however, that the Company may permit Restricted Subsidiaries to incur Indebtedness (including any Acquired Indebtedness) in addition to Permitted Subsidiary Indebtedness, if later(x) the Company's Consolidated Fixed Charge Coverage Ratio for the four full fiscal quarters for which interim financial statements are available immediately preceding the incurrence of such Indebtedness or the issuance of such preferred stock, taken as one period (and after giving pro forma effect to the Issue Datematters referred to in clauses (i), (ii) and (iii) in the parenthetical in clause (x) of paragraph (a) of this Section 1010), would have been at least equal to 3.0 to 1.0, provided that a non-domestic Restricted Subsidiary may incur any Indebtedness (including any Acquired Indebtedness) so long as at the time of such incurrence the Consolidated Fixed Charge Coverage Ratio for the four fiscal quarters for which interim financial statements are available immediately preceding the incurrence of such Indebtedness, taken as one period (and after giving pro forma effect to the matters referred to in clauses (i), (ii) and (iii) in the parenthetical in clause (x) of paragraph (a) of this Section 1010), would have complied with the ratio test in clause (x) of paragraph (a) of the "Limitation on Indebtedness" covenant and (y) any Restricted Subsidiary that incurs any Indebtedness pursuant to clause (x) of this paragraph (b) shall Guarantee the Securities. (c) The Company shall not incur any Indebtedness that is expressly subordinated to any other Indebtedness of the Company unless such Indebtedness, by its terms or the terms of any agreement or instrument pursuant to which such Indebtedness is issued or outstanding, is also expressly made subordinate to the Securities at least to the extent it is subordinated to such other Indebtedness, except that the Securities shall not be required to become designated senior indebtedness or its equivalent due solely to the incurrence of such other Indebtedness in accordance with this sentence.

Limitation on Indebtedness and Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee, permit to be outstanding or otherwise be or become directly or indirectly liable, contingently or otherwise, with respect to Incur any Indebtedness (including Acquired DebtIndebtedness), and the Issuer will Company shall not permit any Restricted Subsidiary to issue or have in issue Preferred Stock, provided that the Company and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) and any Restricted Subsidiary that is a Non-Guarantor Subsidiary may Incur Permitted Subsidiary Indebtedness if, after giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, (x) no Default has occurred and is continuing and (y) the Fixed Charge Coverage Ratio would not be less than 3.0 to 1.0. Notwithstanding the foregoing, the Company shall not permit any Restricted Subsidiary to Incur any Disqualified Stock (other than Disqualified Stock of Restricted Subsidiaries held by the Company or a Subsidiary Guarantor, so long as it is so held). (b) Notwithstanding the foregoing, the Company and, to the extent provided below, any Restricted Subsidiary may Incur each and will not permit all of the following (“Permitted Indebtedness”): (i) Indebtedness under the Notes (excluding any Additional Notes and any Permitted Pari Passu Secured Indebtedness of its Subsidiaries to issue or have in issue the Company) and each Subsidiary Guarantee and JV Subsidiary Guarantee; (ii) any shares of Preferred Stock Pari Passu Subsidiary Guarantees by any Subsidiary Guarantor or any shares JV Subsidiary Guarantor; (iii) Indebtedness of Disqualified Stock, the Company or any Restricted Subsidiary outstanding on the Original Issue Date excluding Indebtedness permitted under clause (iv) below; provided that such Indebtedness of Restricted Subsidiaries that are Non-Guarantor Subsidiaries shall be included in the calculation of Permitted Subsidiary Indebtedness; (iv) Indebtedness of the Company or any Restricted Subsidiary owed to the Company or any Restricted Subsidiary; provided that (i) any event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other thanthan to the Company or any Restricted Subsidiary) shall be deemed, in each case, to constitute an Incurrence of such Indebtedness not permitted by this clause (d) and (ii) if the Company is the obligor on such Indebtedness, such Indebtedness must expressly be subordinated in right of payment to the Notes, and if a Subsidiary Guarantor or a JV Subsidiary Guarantor is the obligor on such Indebtedness and the Company is not the obligee, such Indebtedness must be expressly subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor or the JV Subsidiary Guarantee of such JV Subsidiary Guarantor, as the case may be; (v) Indebtedness of the Company or any Restricted Subsidiary (“Permitted Debt. For Refinancing Indebtedness”) issued in exchange for, or the purposes net proceeds of determining compliance with which are used to refinance or refund, replace, exchange, renew, repay, defease, discharge or extend (collectively, “refinance” and “refinances” and “refinanced” shall have a correlative meaning), then outstanding Indebtedness Incurred under the immediately preceding paragraph (a) or clauses (i), (ii), (iii), (viii), (xvi), (xvii), (xviii) or (xix) of this covenant: paragraph (b) and any refinancings thereof in an amount not to exceed the amount so refinanced (plus premiums, accrued interest, fees and expenses); provided that (1) Indebtedness the outstanding principal amount proceeds of which are used to refinance the Notes or Indebtedness that is pari passu with, or subordinated in right of payment to, the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee shall only be permitted under this clause (v) if (A) in case the Notes are refinanced in part or the Indebtedness to be refinanced is pari passu with the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee, such new Indebtedness, by its terms or by the terms of any particular agreement or instrument pursuant to which such new Indebtedness shall be counted only once and any obligation arising under any is issued or remains outstanding, is expressly made pari passu with, or subordinate in right of payment to, the remaining Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, indemnityas the case may be, Lienor (B) in case the Indebtedness to be refinanced is subordinated in right of payment to the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee, letter such new Indebtedness, by its terms or by the terms of credit any agreement or similar instrument supporting pursuant to which such new Indebtedness shall be disregarded is issued or remains outstanding, is expressly made subordinate in right of payment to the Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, as the case may be, at least to the extent that the Indebtedness to be refinanced is subordinated to the Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, (2) such new Indebtedness, determined as of the outstanding date of Incurrence of such new Indebtedness, does not mature prior to the Stated Maturity of the Indebtedness to be refinanced, and the Average Life of such new Indebtedness is at least equal to the remaining Average Life of the Indebtedness to be refinanced, (3) in no event may Indebtedness of the Company, any Subsidiary Guarantor or any JV Subsidiary Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor or a JV Subsidiary Guarantor, and (4) in no event may Indebtedness of the Company or any Subsidiary Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any JV Subsidiary Guarantor; (vi) Indebtedness Incurred by the Company or any Restricted Subsidiary pursuant to Hedging Obligations entered into in the ordinary course of business designed solely to protect the Company or any Restricted Subsidiary against fluctuations in commodity prices, interest rates or foreign currency exchange rates; (vii) Pre-Registration Mortgage Guarantees by the Company or any Restricted Subsidiary; (viii) Indebtedness Incurred by the Company or any Restricted Subsidiary for the purpose of financing (x) all or any part of the purchase price of assets, real or personal property (including the lease purchase price of land use rights) or equipment to be used in the ordinary course of business by the Company or a Restricted Subsidiary in the Permitted Business, including any such purchase through the acquisition of Capital Stock of any Person that owns such real or personal property or equipment which will, upon acquisition, become a Restricted Subsidiary, or (y) all or any part of the purchase price or the cost of development, construction or improvement of assets, real or personal property (including the lease purchase price of land use rights) or equipment to be used in the ordinary course of business by the Company or such Restricted Subsidiary in the Permitted Business; provided that in the case of clauses (x) and (y), (A) the aggregate principal amount of such Indebtedness included in any clause of the definition of Permitted Debt; shall not exceed such purchase price or cost, (2B) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, shall classify such item of Indebtedness and shall only be required to include the amount and type of such Indebtedness in one of the clauses of the definition of Permitted Debt; and (3) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be Incurred no later than 180 days after the Sterling Equivalentacquisition of such asset, determined property or equipment or completion of such development, construction or improvement and (C) on the date of the incurrence Incurrence of such Indebtedness (or, if laterand after giving effect thereto, the Issue Date). For purposes sum of determining compliance (1) the aggregate principal amount outstanding of all such Indebtedness permitted by this clause (viii) (together with refinancings thereof, but excluding any United States dollar-denominated restriction on Indebtedness, if Contractor Guarantee Incurred under this clause (viii) to the Indebtedness incurred is denominated in a currency other than United States dollars, extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) plus (2) the aggregate amount outstanding of all Indebtedness permitted and then outstanding under clauses (xvi), (xvii) and (xviii) below does not exceed an amount equal to 20.0% of Total Assets; (ix) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to workers’ compensation claims or self- insurance obligations or bid, performance or surety bonds (in each case other than for an obligation for borrowed money); (x) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit or trade guarantees issued in the ordinary course of business to the extent that such letters of credit or trade guarantees are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than 30 days following receipt by the Company or such Restricted Subsidiary of a demand for reimbursement; (xi) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or any Restricted Subsidiary pursuant to such agreements, in any case, Incurred in connection with the disposition of any business, assets or Restricted Subsidiary, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or any Restricted Subsidiary from the disposition of such business, assets or Restricted Subsidiary; (xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business provided, that such Indebtedness is extinguished within five Business Days of Incurrence; (xiii) (A) Guarantees by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant (B) Guarantees by any Restricted Subsidiary of Indebtedness of another Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant, or (C) Guarantees by any JV Subsidiary Guarantor of Indebtedness of any other JV Subsidiary Guarantor that is a direct or indirect Subsidiary or parent of such JV Subsidiary Guarantor, which Indebtedness was permitted to be Incurred by another provision of this covenant; (xiv) Indebtedness of the Company or any Restricted Subsidiary maturing within one year; provided that the aggregate principal amount of Indebtedness permitted by this clause (xiv) at any time outstanding does not exceed US$30.0 million (or the Dollar EquivalentEquivalent thereof); (xv) Indebtedness of the Company or any Restricted Subsidiary constituting an obligation to pay the deferred purchase price of Capital Stock of a Restricted Subsidiary pursuant to a Staged Acquisition Agreement, determined to the extent that such deferred purchase price is paid within 12 months after the date the Company or such Restricted Subsidiary enters into such Staged Acquisition Agreement; (xvi) Indebtedness Incurred by the Company or any Restricted Subsidiary arising from any Investment made by a Trust Company Investor in a PRC Project Company; provided that on the date of Incurrence of all such Indebtedness and after giving effect thereto, the incurrence sum of (1) the aggregate amount outstanding of all Indebtedness permitted under this clause (xvi) plus (2) the aggregate principal amount outstanding of all Indebtedness permitted under clause (viii) above (together with refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) above and clauses (xvii) and (xviii) below to the extent the amount of such Indebtedness (or, if later, the Issue Date).Contractor Guarantee is otherwise reflected in such aggregate principal amount) does not exceed an amount equal to 20.0% of Total Assets;

Limitation on Indebtedness and Preferred Stock. The Issuer shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create(i) Create, incur, issue, assume, Guarantee, permit to be outstanding Guarantee or otherwise be or become directly or indirectly liable, contingently or otherwiseotherwise (collectively, "incur"), with respect to any Indebtedness (including Acquired Debt), and the Issuer will not issue or have in issue any Disqualified Stock and will not permit or, in the case of any Subsidiary of its Subsidiaries to issue or have in the Borrower, issue any shares of Preferred Stock preferred stock; provided, however, that the Borrower may incur Indebtedness (including Acquired Debt) or any shares of issue Disqualified Stock, other thanand the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock if the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. (ii) Section 8.2(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (A) the incurrence by the Borrower of Indebtedness pursuant to any Loan Document, the aggregate principal amount of which is evidenced by the General and Refunding Mortgage Bonds, and the incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee of such Indebtedness pursuant to Section 8.2(o); (B) the incurrence by the Borrower and its Subsidiaries of the Existing Indebtedness; (C) the incurrence by the Borrower or any of the Subsidiary Guarantors of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Borrower or such Subsidiary Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (C), not to exceed $40,000,000 at any time outstanding; (D) the incurrence by the Borrower or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was incurred under Section 8.2(a)(i) or clauses (B), (C) or (J) of this Section 8.2(a)(ii); (E) the incurrence by the Borrower or any of its Subsidiaries of intercompany Indebtedness between or among the Borrower, any of its Subsidiaries, Sierra Pacific Resources or Sierra Pacific Power Company; provided, however, that: (I) if the Borrower is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Loans and other Obligations, unless such Indebtedness constitutes ordinary course intercompany payables; (II) if a Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of such Subsidiary Guarantor's Subsidiary Guarantee; (III) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Borrower or a Subsidiary of the Borrower and (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Borrower or a Subsidiary of the Borrower shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Borrower or such Subsidiary, as the case may be, that was not permitted by this clause (E); and (IV) any Indebtedness issued by the Borrower or a Subsidiary to a Trust Preferred Vehicle shall not be treated as intercompany Indebtedness for purposes of this clause (E) to the extent of the face amount of the beneficial interests of the Trust Preferred Vehicle that are not held by the Borrower or any of its Subsidiaries; (F) the incurrence by the Borrower or any of its Subsidiaries of Hedging Obligations or any Indebtedness pursuant to a Hedge Agreement, in each case, incurred in the normal course of business and not for speculative purposes; (G) the Guarantee by the Borrower or any of its Subsidiaries of Indebtedness of the Borrower or any Subsidiary of the Borrower that was permitted to be incurred by another provision of this Section 8.2(a); provided that in the event the Indebtedness that is being Guaranteed is Subordinated Debt, then the Guarantee of that Indebtedness shall be subordinated in right of payment to the Loans and other Obligations on substantially identical terms; (H) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of such Disqualified Stock, each of which will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 8.2(a); provided, in each such case, that the amount thereof is included in the Fixed Charges of the Borrower as accrued; (I) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Borrower or any Subsidiary of the Borrower in the ordinary course of business, including Guarantees or obligations of the Borrower or any Subsidiary of the Borrower with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); (J) the incurrence by the Borrower of additional Indebtedness consisting of securities issued pursuant to the General and Refunding Mortgage Indenture in respect of claims relating to the Borrower's obligations pursuant to agreements with gas, electric power and other energy suppliers that have been terminated as of Closing Date; (K) the incurrence by the Borrower or any of its Subsidiaries of additional Indebtedness consisting of letters of credit for purposes of supporting the Borrower's or any such Subsidiary's obligations now or hereafter owing to gas, electric power or other energy suppliers, not to exceed $40,000,000 at any time outstanding; (L) the incurrence by the Borrower of additional Indebtedness to finance capital expenditures incurred pursuant to the Borrower's 2003 Integrated Resource Plan as approved or amended under order by the PUCN or mandated by statute or by one or more federal or state regulatory authorities, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (L); and (M) the incurrence by the Borrower or any Subsidiary of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (M), not to exceed $75,000,000 at any time outstanding. (iii) Notwithstanding anything to the contrary in this Agreement, the Borrower will not issue any additional notes or bonds under its First Mortgage Indenture. (iv) The Borrower will not incur any Indebtedness (including Permitted Debt. ) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower unless such Indebtedness is also contractually subordinated in right of payment to the Loans and other Obligations on substantially identical terms; provided, however, that no Indebtedness of the Borrower will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower solely by virtue of being secured on a junior basis or by virtue of being unsecured. (v) For the purposes of determining compliance with this covenant:Section 8.2(a): (1) the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any Guarantee, indemnity, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded to the extent of the outstanding principal amount of such Indebtedness included in any clause of the definition of Permitted Debt; (2A) in the event that an item of Indebtedness proposed Indebtedness, including Acquired Debt, meets the criteria of more than one of the types categories of Permitted DebtDebt described in clauses (A) through (M) of Section 8.2(a)(ii), or is entitled to be incurred pursuant to Section 8.2(a)(i), the IssuerBorrower will be permitted to classify (or later classify or reclassify such Indebtedness, in whole or in part in its sole discretion, shall classify ) such item of Indebtedness and shall only be required to include the amount and type of such Indebtedness in one of the clauses of the definition of Permitted Debtany manner that complies with this Section 8.2(a); and (3B) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with respect to any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date). For purposes of determining compliance with any United States dollar-denominated restriction on Indebtedness, if the incurrence of Indebtedness incurred is denominated in a currency other than United States dollarsforeign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the Dollar Equivalent, determined relevant currency exchange rate in effect on the date of the incurrence of that such Indebtedness (or, if later, the Issue Date)was incurred.

Limitation on Indebtedness and Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee, permit to be outstanding or otherwise be or become directly or indirectly liable, contingently or otherwise, with respect to Incur any Indebtedness (including Acquired DebtIndebtedness), and the Issuer will Company shall not permit any Restricted Subsidiary to issue Preferred Stock, provided that the Company, any Subsidiary Guarantor or have in issue any JV Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) and any Non-Guarantor Subsidiary may Incur Permitted Subsidiary Indebtedness if, after giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, (x) no Default has occurred and is continuing and (y) the Fixed Charge Coverage Ratio would not be less than 2.0 to 1.0. Notwithstanding the foregoing, the Company shall not permit any Restricted Subsidiary to Incur any Disqualified Stock (other than Disqualified Stock of Restricted Subsidiaries held by the Company or a Subsidiary Guarantor, so long as it is so held). (b) Notwithstanding the foregoing, the Company and, to the extent provided below, any Restricted Subsidiary may Incur each and will not permit all of the following (“Permitted Indebtedness”): (i) Indebtedness under the Notes (excluding any Additional Notes and any Permitted Pari Passu Secured Indebtedness of its Subsidiaries to issue or have in issue the Company) and each Subsidiary Guarantee and JV Subsidiary Guarantee; (ii) any shares of Preferred Stock Pari Passu Subsidiary Guarantees by any Subsidiary Guarantor or any shares JV Subsidiary Guarantor; (iii) Indebtedness of Disqualified Stock, the Company or any Restricted Subsidiary outstanding on the Original Issue Date excluding Indebtedness permitted under clause (iv) below; provided that such Indebtedness of Non-Guarantor Subsidiaries shall be included in the calculation of Permitted Subsidiary Indebtedness; (iv) Indebtedness of the Company or any Restricted Subsidiary owed to the Company or any Restricted Subsidiary; provided that (i) any event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other thanthan to the Company or any Restricted Subsidiary) shall be deemed, in each case, to constitute an Incurrence of such Indebtedness not permitted by this clause (d) and (ii) if the Company is the obligor on such Indebtedness, such Indebtedness must expressly be subordinated in right of payment to the Notes, and if a Subsidiary Guarantor or a JV Subsidiary Guarantor is the obligor on such Indebtedness and the Company is not the obligee, such Indebtedness must be expressly subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor or the JV Subsidiary Guarantee of such JV Subsidiary Guarantor, as the case may be; (v) Indebtedness of the Company or any Restricted Subsidiary (“Permitted Debt. Refinancing Indebtedness”) issued in exchange for, or the net proceeds of which are used to refinance or refund, replace, exchange, renew, repay, defease, discharge or extend (collectively, “refinance” and “refinances” and “refinanced” shall have a correlative meaning), then outstanding Indebtedness Incurred under the immediately preceding paragraph (a) or clauses (i), (ii), (iii), (viii), (xvi), (xvii), (xviii) or (xix) of this paragraph (b) and any refinancings thereof in an amount not to exceed the amount so refinanced (plus premiums, accrued interest, fees and expenses); provided that (1) Indebtedness the proceeds of which are used to refinance the Notes or Indebtedness that is pari passu with, or subordinated in right of payment to, the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee shall only be permitted under this clause (v) if (A) in case the Notes are refinanced in part or the Indebtedness to be refinanced is pari passu with the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made pari passu with, or subordinate in right of payment to, the remaining Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, as the case may be, or (B) in case the Indebtedness to be refinanced is subordinated in right of payment to the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made subordinate in right of payment to the Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, as the case may be, at least to the extent that the Indebtedness to be refinanced is subordinated to the Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, (2) such new Indebtedness, determined as of the date of Incurrence of such new Indebtedness, does not mature prior to the Stated Maturity of the Indebtedness to be refinanced, and the Average Life of such new Indebtedness is at least equal to the remaining Average Life of the Indebtedness to be refinanced, (3) in no event may Indebtedness of the Company, any Subsidiary Guarantor or any JV Subsidiary Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor or a JV Subsidiary Guarantor, and (4) in no event may Indebtedness of the Company or any Subsidiary Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any JV Subsidiary Guarantor; (vi) Indebtedness Incurred by the Company or any Restricted Subsidiary pursuant to Hedging Obligations designed solely to reduce or manage the exposure of the Company or any Restricted Subsidiary to fluctuations in commodity prices, interest rates or foreign currency exchange rates; (vii) Pre-Registration Mortgage Guarantees by the Company or any Restricted Subsidiary; (viii) Indebtedness Incurred by the Company or any Restricted Subsidiary for the purpose of financing (x) all or any part of the purchase price of assets, real or personal property (including the lease purchase price of land use rights) or equipment to be used in the ordinary course of business by the Company or a Restricted Subsidiary, including any such purchase through the acquisition of Capital Stock of any Person that owns such real or personal property or equipment which will, upon acquisition, become a Restricted Subsidiary, or (y) all or any part of the purchase price or the cost of development, construction or improvement of assets, real or personal property (including the lease purchase price of land use rights) or equipment to be used in the ordinary course of business by the Company or such Restricted Subsidiary; provided that, in the case of clauses (x) and (y), (A) the aggregate principal amount of such Indebtedness shall not exceed such purchase price or cost, (B) such Indebtedness shall be Incurred no later than 180 days after the acquisition of such asset, property or equipment or completion of such development, construction or improvement and (C) on the date of the Incurrence of such Indebtedness and after giving effect thereto, the sum of (1) the aggregate principal amount outstanding of all such Indebtedness permitted by this clause (viii) (together with refinancings thereof, but excluding any Contractor Guarantee Incurred under this clause (viii) to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) plus (2) the aggregate amount outstanding of all Indebtedness permitted and then outstanding under clauses (xvi), (xvii), (xx) and (xxii) below (together with any refinancings thereof) does not exceed an amount equal to 60.0% of Total Assets; (ix) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to workers’ compensation claims or self- insurance obligations or bid, performance or surety bonds (in each case other than for an obligation for borrowed money); (x) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit or trade guarantees issued in the ordinary course of business to the extent that such letters of credit or trade guarantees are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than 30 days following receipt by the Company or such Restricted Subsidiary of a demand for reimbursement; (xi) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or any Restricted Subsidiary pursuant to such agreements, in any case, Incurred in connection with the disposition of any business, assets or Restricted Subsidiary, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that, the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or any Restricted Subsidiary from the disposition of such business, assets or Restricted Subsidiary; (xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business provided, that such Indebtedness is extinguished within five Business Days of Incurrence; (xiii) (A) Guarantees by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant (B) Guarantees by any Restricted Subsidiary of Indebtedness of another Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant, or (C) Guarantees by any JV Subsidiary Guarantor of Indebtedness of any other JV Subsidiary Guarantor that is a direct or indirect Subsidiary or parent of such JV Subsidiary Guarantor, which Indebtedness was permitted to be Incurred by another provision of this covenant; (xiv) Indebtedness of the Company or any Restricted Subsidiary maturing within one year; provided that, the aggregate principal amount of Indebtedness permitted by this clause (xiv) at any time outstanding does not exceed US$50.0 million (or the Dollar Equivalent thereof); (xv) Indebtedness of the Company or any Restricted Subsidiary constituting an obligation to pay the deferred purchase price of Capital Stock of a Restricted Subsidiary pursuant to a Staged Acquisition Agreement, to the extent that such deferred purchase price is paid within 12 months after the date the Company or such Restricted Subsidiary enters into such Staged Acquisition Agreement; (xvi) Indebtedness Incurred or Preferred Stock issued by the Company or any Restricted Subsidiary arising from any Investment made by a Trust Company Investor in a Restricted Subsidiary; provided that, on the date of Incurrence of all such Indebtedness or issuance of such Preferred Stock and after giving effect thereto, the sum of (1) the aggregate amount outstanding of all Indebtedness and Preferred Stock permitted under this clause (xvi) plus (2) the aggregate principal amount outstanding of all Indebtedness permitted under clause (viii) above and clauses (xvii), (xx) and (xxii) below (together with refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) above to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) does not exceed an amount equal to 60.0% of Total Assets; (xvii) Bank Deposit Secured Indebtedness Incurred by the Company or any Restricted Subsidiary; provided that, on the date of the Incurrence of such Indebtedness and after giving effect thereto, the sum of (1) the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to this clause (xvii) (together with any refinancings thereof), plus (2) the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to clauses (viii) and (xvi) above and clauses (xx) and (xxii) below (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) above to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount), does not exceed an amount equal to 60.0% of Total Assets; (xviii) Indebtedness Incurred by any Restricted Subsidiary which is secured by Investment Properties; provided that, on the date of the Incurrence of all such Indebtedness and after giving effect thereto, the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to this clause (xviii) (together with any refinancings thereof) does not exceed an amount equal to 10.0% of Total Assets; (xix) Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount outstanding at any time (together with refinancings thereof) not to exceed US$15.0 million (or the Dollar Equivalent thereof); (xx) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting a Guarantee of Indebtedness of any Person (other than the Company or a Restricted Subsidiary) by the Company or such Restricted Subsidiary; provided that, on the date of the Incurrence of all such Indebtedness and after giving effect thereto, (1) the aggregate principal amount outstanding of all such Indebtedness Incurred under this clause (xx) (together with any refinancing thereof), plus (2) the aggregate principal amount outstanding of all Indebtedness Incurred pursuant to clauses (viii), (xvi) and (xvii) above and clause (xxii) below (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount), does not exceed an amount equal to 60.0% of Total Assets; (xxi) Indebtedness Incurred by the Company or a Restricted Subsidiary constituting a Subordinated Shareholder Loan; and (xxii) Acquired Indebtedness of any Restricted Subsidiary Incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary (other than Indebtedness Incurred (A) to provide all or any portion of the funds utilized to consummate the transaction or series of transactions pursuant to which a Person becomes a Restricted Subsidiary or (B) otherwise in contemplation of a Person becoming a Restricted Subsidiary or any such acquisition); provided that, on the date of the Incurrence of all such Indebtedness and after giving effect thereto, (1) the aggregate principal amount outstanding of all such Indebtedness Incurred under this clause (xxii) (together with any refinancings thereof), plus (2) the aggregate principal amount outstanding of all Indebtedness Incurred pursuant to clauses (viii), (xvi), (xvii) and (xx) above (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (vii) to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) does not exceed an amount equal to 60.0% of Total Assets. (c) For the purposes of determining compliance with this covenant: (1) the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any GuaranteeSection 4.05, indemnity, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded to the extent of the outstanding principal amount of such Indebtedness included in any clause of the definition of Permitted Debt; (2) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted DebtIndebtedness described above, including under the proviso in Section 4.05(a), the IssuerCompany, in its sole discretion, shall classify classify, and from time to time may reclassify, such item of Indebtedness and shall only be required to include the amount and type as one or more of such Indebtedness in one of the clauses of the definition of Permitted Debt; andtypes. (3d) Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that may be Incurred pursuant to this covenant will not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to the result of fluctuations in the event that an item exchange rates of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date). For purposes of determining compliance with any United States dollar-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than United States dollars, the amount of such Indebtedness shall be the Dollar Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date)currencies.

Limitation on Indebtedness and Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee, permit to be outstanding or otherwise be or become directly or indirectly liable, contingently or otherwise, with respect to Incur any Indebtedness (including Acquired DebtIndebtedness), and the Issuer will Company shall not permit any Restricted Subsidiary to issue or have in issue Preferred Stock, provided that the Company and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) and any Restricted Subsidiary that is a Non-Guarantor Subsidiary may Incur Permitted Subsidiary Indebtedness if, after giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, (x) no Default has occurred and is continuing and (y) the Fixed Charge Coverage Ratio would not be less than 3.0 to 1.0. Notwithstanding the foregoing, the Company shall not permit any Restricted Subsidiary to Incur any Disqualified Stock (other than Disqualified Stock of Restricted Subsidiaries held by the Company or a Subsidiary Guarantor, so long as it is so held). (b) Notwithstanding the foregoing, the Company and, to the extent provided below, any Restricted Subsidiary may Incur each and will not permit all of the following (“Permitted Indebtedness”): (i) Indebtedness under the Notes (excluding any Additional Notes and any Permitted Pari Passu Secured Indebtedness of its Subsidiaries to issue or have in issue the Company) and each Subsidiary Guarantee and JV Subsidiary Guarantee; (ii) any shares of Preferred Stock Pari Passu Subsidiary Guarantees by any Subsidiary Guarantor or any shares JV Subsidiary Guarantor; (iii) Indebtedness of Disqualified Stock, the Company or any Restricted Subsidiary outstanding on the Original Issue Date excluding Indebtedness permitted under clause (iv) below; provided that such Indebtedness of Restricted Subsidiaries that are Non-Guarantor Subsidiaries shall be included in the calculation of Permitted Subsidiary Indebtedness; (iv) Indebtedness of the Company or any Restricted Subsidiary owed to the Company or any Restricted Subsidiary; provided that (i) any event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other thanthan to the Company or any Restricted Subsidiary) shall be deemed, in each case, to constitute an Incurrence of such Indebtedness not permitted by this clause (d) and (ii) if the Company is the obligor on such Indebtedness, such Indebtedness must expressly be subordinated in right of payment to the Notes, and if a Subsidiary Guarantor or a JV Subsidiary Guarantor is the obligor on such Indebtedness and the Company is not the obligee, such Indebtedness must be expressly subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor or the JV Subsidiary Guarantee of such JV Subsidiary Guarantor, as the case may be; (v) Indebtedness of the Company or any Restricted Subsidiary (“Permitted Debt. Refinancing Indebtedness”) issued in exchange for, or the net proceeds of which are used to refinance or refund, replace, exchange, renew, repay, defease, discharge or extend (collectively, “refinance” and “refinances” and “refinanced” shall have a correlative meaning), then outstanding Indebtedness Incurred under the immediately preceding paragraph (a) or clauses (i), (ii), (iii), (viii), (xvi), (xvii), (xviii) or (xix) of this paragraph (b) and any refinancings thereof in an amount not to exceed the amount so refinanced (plus premiums, accrued interest, fees and expenses); provided that (1) Indebtedness the proceeds of which are used to refinance the Notes or Indebtedness that is pari passu with, or subordinated in right of payment to, the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee shall only be permitted under this clause (v) if (A) in case the Notes are refinanced in part or the Indebtedness to be refinanced is pari passu with the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made pari passu with, or subordinate in right of payment to, the remaining Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, as the case may be, or (B) in case the Indebtedness to be refinanced is subordinated in right of payment to the Notes or a Subsidiary Guarantee or a JV Subsidiary Guarantee, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made subordinate in right of payment to the Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, as the case may be, at least to the extent that the Indebtedness to be refinanced is subordinated to the Notes or such Subsidiary Guarantee or such JV Subsidiary Guarantee, (2) such new Indebtedness, determined as of the date of Incurrence of such new Indebtedness, does not mature prior to the Stated Maturity of the Indebtedness to be refinanced, and the Average Life of such new Indebtedness is at least equal to the remaining Average Life of the Indebtedness to be refinanced, (3) in no event may Indebtedness of the Company, any Subsidiary Guarantor or any JV Subsidiary Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor or a JV Subsidiary Guarantor, and (4) in no event may Indebtedness of the Company or any Subsidiary Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any JV Subsidiary Guarantor; (vi) Indebtedness Incurred by the Company or any Restricted Subsidiary pursuant to Hedging Obligations entered into in the ordinary course of business designed solely to protect the Company or any Restricted Subsidiary against fluctuations in commodity prices, interest rates or foreign currency exchange rates; (vii) Pre-Registration Mortgage Guarantees by the Company or any Restricted Subsidiary; (viii) Indebtedness Incurred by the Company or any Restricted Subsidiary for the purpose of financing (x) all or any part of the purchase price of assets, real or personal property (including the lease purchase price of land use rights) or equipment to be used in the ordinary course of business by the Company or a Restricted Subsidiary in the Permitted Business, including any such purchase through the acquisition of Capital Stock of any Person that owns such real or personal property or equipment which will, upon acquisition, become a Restricted Subsidiary, or (y) all or any part of the purchase price or the cost of development, construction or improvement of assets, real or personal property (including the lease purchase price of land use rights) or equipment to be used in the ordinary course of business by the Company or such Restricted Subsidiary in the Permitted Business; provided that in the case of clauses (x) and (y), (A) the aggregate principal amount of such Indebtedness shall not exceed such purchase price or cost, (B) such Indebtedness shall be Incurred no later than 180 days after the acquisition of such asset, property or equipment or completion of such development, construction or improvement and (C) on the date of the Incurrence of such Indebtedness and after giving effect thereto, the sum of (1) the aggregate principal amount outstanding of all such Indebtedness permitted by this clause (viii) (together with refinancings thereof, but excluding any Contractor Guarantee Incurred under this clause (viii) to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) plus (2) the aggregate amount outstanding of all Indebtedness permitted and then outstanding under clauses (xvi), (xvii), (xviii) and (xx) (together with any refinancings thereof) below does not exceed an amount equal to 30.0% of Total Assets; (ix) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to workers’ compensation claims or self- insurance obligations or bid, performance or surety bonds (in each case other than for an obligation for borrowed money); (x) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit or trade guarantees issued in the ordinary course of business to the extent that such letters of credit or trade guarantees are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than 30 days following receipt by the Company or such Restricted Subsidiary of a demand for reimbursement; (xi) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or any Restricted Subsidiary pursuant to such agreements, in any case, Incurred in connection with the disposition of any business, assets or Restricted Subsidiary, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or any Restricted Subsidiary from the disposition of such business, assets or Restricted Subsidiary; (xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business provided, that such Indebtedness is extinguished within five Business Days of Incurrence; (xiii) (A) Guarantees by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant (B) Guarantees by any Restricted Subsidiary of Indebtedness of another Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant, or (C) Guarantees by any JV Subsidiary Guarantor of Indebtedness of any other JV Subsidiary Guarantor that is a direct or indirect Subsidiary or parent of such JV Subsidiary Guarantor, which Indebtedness was permitted to be Incurred by another provision of this covenant; (xiv) Indebtedness of the Company or any Restricted Subsidiary maturing within one year; provided that the aggregate principal amount of Indebtedness permitted by this clause (xiv) at any time outstanding does not exceed US$30.0 million (or the Dollar Equivalent thereof); (xv) Indebtedness of the Company or any Restricted Subsidiary constituting an obligation to pay the deferred purchase price of Capital Stock of a Restricted Subsidiary pursuant to a Staged Acquisition Agreement, to the extent that such deferred purchase price is paid within 12 months after the date the Company or such Restricted Subsidiary enters into such Staged Acquisition Agreement; (xvi) Indebtedness Incurred or Preferred Stock issued by the Company or any Restricted Subsidiary arising from any Investment made by a Trust Company Investor in a PRC Project Company; provided that on the date of Incurrence of all such Indebtedness or issuance of such Preferred Stock and after giving effect thereto, the sum of (1) the aggregate amount outstanding of all Indebtedness and Preferred Stock permitted under this clause (xvi) plus (2) the aggregate principal amount outstanding of all Indebtedness permitted under clause (viii) above and clauses (xvii), (xviii) and (xx) below (together with refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) above to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount) does not exceed an amount equal to 30.0% of Total Assets; (xvii) Bank Deposit Secured Indebtedness Incurred by the Company or any Restricted Subsidiary; provided that on the date of the Incurrence of such Indebtedness and after giving effect thereto, the sum of (1) the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to this clause (xvii) (together with any refinancings thereof), plus (2) the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to clauses (viii) and (xvi) above and clauses (xviii) and (xx) below (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) above to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount), does not exceed an amount equal to 30.0% of Total Assets; (xviii) Indebtedness Incurred by any Restricted Subsidiary which is secured by Investment Properties; provided that on the date of the Incurrence of all such Indebtedness and after giving effect thereto, the sum of (1) the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to this clause (xviii) (together with any refinancings thereof), plus (2) the aggregate principal amount outstanding of all such Indebtedness Incurred pursuant to clauses (viii), (xvi) and (xvii) above and clause (xx) below (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) above to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount), does not exceed an amount equal to 30.0% of Total Assets; (xix) Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount outstanding at any time (together with refinancings thereof) not to exceed US$15.0 million (or the Dollar Equivalent thereof); (xx) Indebtedness Incurred by the Company or any Restricted Subsidiary constituting a Guarantee of Indebtedness of any Person (other than the Company or a Restricted Subsidiary) by the Company or such Restricted Subsidiary; provided that on the date of the Incurrence of all such Indebtedness and after giving effect thereto, (1) the aggregate principal amount outstanding of all such Indebtedness Incurred under this clause (xx) (together with any refinancing thereof), plus (2) the aggregate principal amount outstanding of all Indebtedness Incurred pursuant to clauses (viii), (xvi), (xvii) and (xviii) above (together with any refinancings thereof, but excluding any Contractor Guarantee Incurred under clause (viii) to the extent the amount of such Contractor Guarantee is otherwise reflected in such aggregate principal amount), does not exceed an amount equal to 30.0% of Total Assets; and (xxi) Indebtedness Incurred by the Company or a Restricted Subsidiary constituting a Subordinated Shareholder Loan. (c) For the purposes of determining compliance with this covenant: (1) the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any GuaranteeSection 4.05, indemnity, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded to the extent of the outstanding principal amount of such Indebtedness included in any clause of the definition of Permitted Debt; (2) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted DebtIndebtedness described above, including under the proviso in Section 4.05(a), the IssuerCompany, in its sole discretion, shall classify classify, and from time to time may reclassify, such item of Indebtedness and shall only be required to include the amount and type as one or more of such Indebtedness in one of the clauses of the definition of Permitted Debt; andtypes. (3d) Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that may be Incurred pursuant to this covenant will not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to the result of fluctuations in the event that an item exchange rates of Indebtedness meets the criteria of more than one of the types of Permitted Debt, the Issuer, in its sole discretion, may divide and classify such item of Indebtedness under more than one of the types of Permitted Debt. For purposes of determining compliance with any sterling-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than sterling, the amount of such Indebtedness shall be the Sterling Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date). For purposes of determining compliance with any United States dollar-denominated restriction on Indebtedness, if the Indebtedness incurred is denominated in a currency other than United States dollars, the amount of such Indebtedness shall be the Dollar Equivalent, determined on the date of the incurrence of such Indebtedness (or, if later, the Issue Date)currencies.