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PLEDGE AGREEMENT
AMONG
SIERRA PACIFIC RESOURCES
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS COLLATERAL AGENT
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS SECURITIES INTERMEDIARY
AND
THE BANK OF NEW YORK, AS PURCHASE CONTRACT AGENT
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DATED AS OF MAY 24, 2005
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TABLE OF CONTENTS
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Section 1. Definitions.................................................................................. 2
Section 2. Pledge....................................................................................... 7
Section 2.1 Pledge............................................................................... 7
Section 2.2 Control; Financing Statement......................................................... 7
Section 2.3 Termination.......................................................................... 7
Section 3. Distributions on Pledged Collateral.......................................................... 7
Section 3.1 Income Distributions................................................................. 7
Section 3.2 Principal Payments Following Termination Event....................................... 7
Section 3.3 Principal Payments Prior to or On Purchase Contract Settlement Date.................. 8
Section 3.4 Payments to Purchase Contract Agent.................................................. 9
Section 3.5 Assets Not Properly Released......................................................... 9
Section 4. Control...................................................................................... 9
Section 4.1 Establishment of Collateral Account.................................................. 9
Section 4.2 Treatment as Financial Assets........................................................ 10
Section 4.3 Sole Control by Collateral Agent..................................................... 10
Section 4.4 Securities Intermediary's Location................................................... 10
Section 4.5 No Other Claims...................................................................... 10
Section 4.6 Investment and Release............................................................... 10
Section 4.7 Statements and Confirmations......................................................... 10
Section 4.8 Tax Allocations...................................................................... 10
Section 4.9 No Other Agreements.................................................................. 11
Section 4.10 Powers Coupled With An Interest...................................................... 11
Section 5. Initial Deposit; Creation of Treasury PIES; and Recreation of Corporate PIES; Other.......... 11
Section 5.1 Initial Deposit of Senior Notes...................................................... 11
Section 5.2 Creation of Treasury PIES by Substitution of Treasury Securities..................... 11
Section 5.3 Recreation of Corporate PIES......................................................... 12
Section 5.4 Termination Event.................................................................... 14
Section 5.5 Cash Settlement...................................................................... 14
Section 5.6 Early Settlement; Merger Early Settlement............................................ 16
Section 5.7 Optional Remarketing................................................................. 17
Section 5.8 Application of Proceeds in Settlement; Remarketing................................... 18
Section 6. Voting Rights................................................................................ 21
Section 7. Rights and Remedies.......................................................................... 21
Section 7.1 Rights and Remedies of the Collateral Agent.......................................... 21
Section 7.2 Substitutions........................................................................ 22
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Section 8. Representations and Warranties; Covenants.................................................... 22
Section 8.1 Representations and Warranties....................................................... 22
Section 8.2 Covenants............................................................................ 23
Section 9. The Collateral Agent and the Securities Intermediary......................................... 24
Section 9.1 Appointment, Powers and Immunities................................................... 24
Section 9.2 Instructions of the Company.......................................................... 25
Section 9.3 Reliance by Collateral Agent and Securities Intermediary............................. 25
Section 9.4 Rights in Other Capacities........................................................... 25
Section 9.5 Non-Reliance on Collateral Agent and Securities Intermediary......................... 26
Section 9.6 Compensation and Indemnity........................................................... 26
Section 9.7 Failure to Act....................................................................... 26
Section 9.8 Resignation of Collateral Agent and Securities Intermediary.......................... 27
Section 9.9 Right to Appoint Agent or Advisor.................................................... 29
Section 9.10 Survival............................................................................ 29
Section 9.11 Exculpation.......................................................................... 29
Section 10. Amendment.................................................................................... 29
Section 10.1 Amendment Without Consent of Holders................................................. 29
Section 10.2 Amendment with Consent of Holders.................................................... 29
Section 10.3 Execution of Amendments.............................................................. 30
Section 10.4 Effect of Amendments................................................................. 31
Section 10.5 Reference to Amendments.............................................................. 31
Section 11. Merger, Consolidation, Sale or Conveyance.................................................... 31
Section 11.1 When Company May Merge, Etc.......................................................... 31
Section 11.2 Successor Corporation Substituted.................................................... 31
Section 11.3 Limitation........................................................................... 32
Section 12. Miscellaneous................................................................................ 32
Section 12.1 No Waiver............................................................................ 32
Section 12.2 Governing Law; Jurisdiction and Venue................................................ 32
Section 12.3 Notices.............................................................................. 32
Section 12.4 Successors and Assigns............................................................... 33
Section 12.5 Counterparts......................................................................... 33
Section 12.6 Effect of Headings and Table of Contents............................................. 33
Section 12.7 Severability......................................................................... 33
Section 12.8 Expenses, etc........................................................................ 34
Section 12.9 Security Interest Absolute........................................................... 34
EXHIBITS
EXHIBIT A Instruction from Purchase Contract Agent to Collateral Agent
(Creation of Treasury PIES).......................................................... A-1
EXHIBIT B Instruction from Collateral Agent to Securities Intermediary
(Creation of Treasury PIES).......................................................... B-1
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EXHIBIT C Instruction from Purchase Contract Agent to Collateral Agent
(Recreation of Corporate PIES)....................................................... C-1
EXHIBIT D Instruction from Collateral Agent to Securities Intermediary
(Recreation of Corporate PIES)....................................................... D-1
EXHIBIT E Notice of Cash Settlement from the Securities Intermediary to the
Purchase Contract Agent.............................................................. E-1
EXHIBIT F Instruction from Holder of Separated Senior Notes to Collateral Agent Regarding
Remarketing.......................................................................... F-1
EXHIBIT G Instruction from Purchase Contract Agent to Collateral Agent......................... G-1
EXHIBIT H Agency and Custody Account Direction for Cash Balances............................... H-1
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PLEDGE AGREEMENT, dated as of May 24, 2005, among SIERRA PACIFIC
RESOURCES, a Nevada corporation (the "Company"), XXXXX FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, not individually but solely as
collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, not
individually but solely in its capacity as "Securities Intermediary" (in such
capacity, together with its successors in such capacity, the "Securities
Intermediary") as defined in Section 8-102(a)(14) of the UCC (as hereinafter
defined) with respect to the Collateral Account (as hereinafter defined), and
THE BANK OF NEW YORK, a New York banking corporation, not individually but
solely as purchase contract agent and as attorney-in-fact of the Holders from
time to time of the PIES (in such capacity, together with its successors in such
capacity, the "Purchase Contract Agent") under the Purchase Contract Agreement
(as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement dated as of the date hereof (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Purchase Contract Agreement"), pursuant to which there may be issued up to
4,704,350 PIES (the "PIES"), all of which will initially be Corporate PIES.
Each Corporate PIES consists of a unit comprised of (a) one stock purchase
contract (a "Purchase Contract") under which the Holder will purchase from the
Company and the Company will be required to sell to such Holder not later than
the Purchase Contract Settlement Date, for an amount equal to $50 (the "Stated
Amount"), a number of shares of Common Stock of the Company equal to the
Settlement Rate or Early Settlement Rate, as the case may be, then in effect and
(b) either beneficial ownership of (1) a 1/20th, or 5%, undivided beneficial
interest in a Senior Note with a principal amount of $1,000 or (2) following the
Remarketing of the Senior Note in accordance with the Purchase Contract
Agreement and the Remarketing Agreement, the Treasury Portfolio Interest,
subject to the termination or settlement of the Purchase Contracts.
In accordance with the terms of the Purchase Contract Agreement, a Holder
of Corporate PIES may separate the Senior Notes from the related Purchase
Contracts by substituting Treasury Securities for such Senior Notes that will
pay on maturity in the aggregate an amount equal to the aggregate Stated Amount
of such Corporate PIES except during an Active Remarketing Period. Upon such
substitution, the Corporate PIES will become Treasury PIES in accordance with
the terms of the Purchase Contract Agreement. Each Treasury PIES will be
comprised of (a) a Purchase Contract under which the holder will purchase from
the Company not later than the Purchase Contract Settlement Date, for the Stated
Amount, a number of shares of Common Stock of the Company equal to the
Settlement Rate or Early Settlement Rate, as the case may be, then in effect,
and (b) a 1/20th undivided beneficial interest in a Treasury Security having a
principal amount at maturity equal to $1,000 and maturing on or prior to the
Business Day preceding the Purchase Contract Settlement Date, subject to the
termination or settlement of the Purchase Contracts.
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders, from time to time, of the PIES have irrevocably
authorized the Purchase Contract Agent, as attorney-in-fact of such Holders,
among other things, to execute and deliver this
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Agreement on behalf of such Holders and to grant the pledge provided herein of
the Collateral Account to secure the Obligations.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the PIES, agree as follows:
Section 1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Section have the meanings assigned to
them in this Section and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section, Exhibit or other section;
(c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "certificated security," "control," "financial
asset," "entitlement order," "securities account" and "security entitlement";
(d) capitalized terms used and not defined in this Agreement shall
have the meanings set forth in the Purchase Contract Agreement; and
(e) the following terms have the meanings given to them in this
Section 1(e):
"Account Direction" means the Agency and Custody Account Direction for
Cash Balances in the form of Exhibit H attached hereto, as executed and
delivered to the Collateral Agent by the Company from time to time.
"Active Remarketing Period" means the period commencing on and including
the Business Day preceding any Three-Day Remarketing Period and ending on and
including, in the case of a Successful Remarketing during that Three-Day
Remarketing Period, the Remarketing Settlement Date, or, if none of the
Remarketings during that Three-Day Remarketing Period is successful, the
Business Day following the last remarketing date during that Three-Day
Remarketing Period.
"Agreement" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time in accordance with the terms thereof.
"Business Day" means any day other than Saturday or Sunday or a day on
which banking institutions in New York City are authorized or required by law or
executive order to remain closed.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Collateral" means the collective reference to:
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(1) the Collateral Account;
(2) all investment property and other financial assets and other
property and credit balances from time to time credited to the Collateral
Account, including, without limitation, (A) any Senior Notes or any
Treasury Portfolio Interest which are then a component of the Corporate
PIES and, in each case, security entitlements relating thereto, (B) any
Treasury Securities and security entitlements relating thereto delivered
from time to time upon establishment of Treasury PIES in accordance with
Section 5.2 hereof and (C) payments made by Holders pursuant to Section
5.5 hereof;
(3) all Proceeds of any of the foregoing (whether such Proceeds
arise before or after the commencement of any proceeding under any
applicable bankruptcy, insolvency or other similar law, by or against the
pledgor or with respect to the pledgor); and
(4) all powers and rights now owned or hereafter acquired under or
with respect to the Collateral Account.
"Collateral Account" means the Securities Account No. 00000000 entitled
"Xxxxx Fargo Bank, National Association, as Collateral Agent, Securities Account
(Sierra Pacific Resources)" maintained by the Securities Intermediary for the
Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders.
"Collateral Agent" means the Person named as the "Collateral Agent" in the
first paragraph of this instrument until a successor shall have become such in
accordance with the terms of this Agreement, and thereafter "Collateral Agent"
shall mean such successor.
"Collateral Substitution" means the substitution of Treasury Securities
for a Holder's Senior Notes, pursuant to Section 3.13 of the Purchase Contract
Agreement and Section 5.2 of this Agreement, and the substitution of a Holder's
Senior Notes for Treasury Securities, pursuant to Section 3.14 of the Purchase
Contract Agreement and Section 5.3 of this Agreement.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such in accordance with
the terms of this Agreement, and thereafter "Company" shall mean such successor.
"Custodian" has the meaning set forth in Section 5.2(c).
"Early Remarketing" means a Remarketing in one or more three-day
remarketing periods that consist of three sequential possible remarketing dates
selected by the Company during the Period for Early Remarketing.
"Failed Remarketing" has the meaning set forth in the Remarketing
Agreement.
"Final Remarketing" means a Remarketing during Final Remarketing Period.
"Final Remarketing Period" means the period beginning on the fifth
Business Day and ending on and including the third Business Day preceding the
Purchase Contract Settlement Date.
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"Final Remarketing Date" means last day of the Final Remarketing Period.
"Indenture Officers' Certificate" has the meaning set forth in Section 1.1
of the Purchase Contract Agreement.
"Obligations" means, with respect to each Holder, the collective reference
to all obligations and liabilities of such Holder under such Holder's Purchase
Contract and this Agreement or any other document made, delivered or given in
connection herewith or therewith, in each case whether on account of principal,
interest (including, without limitation, interest accruing before and after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Holder, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Company or the Collateral Agent or
the Securities Intermediary that are required to be paid by the Holder pursuant
to the terms of any of the foregoing agreements).
"Period for Early Remarketing" means the period beginning the day
following the consummation of the exchange offer and ending on the ninth
Business Day prior to the Purchase Contract Settlement Date.
"Permitted Investments" means any one of the following which shall mature
not later than the Purchase Contract Settlement Date:
(1) any evidence of indebtedness with an original maturity of 365
days or less issued, or directly and fully guaranteed or insured, by the
United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America
is pledged in support of the timely payment thereof or such indebtedness
constitutes a general obligation of it);
(2) deposits, certificates of deposit or acceptances with an
original maturity of 365 days or less of any institution which is a member
of the Federal Reserve System having combined capital and surplus and
undivided profits of not less than $200,000,000 at the time of deposit,
which may include the Collateral Agent or any of its affiliates;
(3) investments with an original maturity of 365 days or less of any
Person that are fully and unconditionally guaranteed by a bank referred to
in clause (2);
(4) repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally guaranteed by
the United States Government or issued by any agency thereof and backed as
to timely payment by the full faith and credit of the United States
Government;
(5) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated
under the laws of the United States or any State thereof, which commercial
paper has a rating at the time of purchase at least equal to "A-1" by
Standard & Poor's Ratings Services, Inc. ("S&P") or at least equal to
"P-1" by Xxxxx'x Investors Service, Inc. ("Moody's"); and
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(6) investments in money market funds registered under the
Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's, which may include such money
market funds offered, administered or serviced by the Collateral Agent or
any of its affiliates.
"PIES" has the meaning specified in the paragraph preceding the recitals
of this Agreement.
"Pledge" means the lien and security interest created by this Agreement.
"Pledged Senior Notes" means the Senior Notes, which shall be in
certificated form, and security entitlements with respect thereto from time to
time credited to the Collateral Account and not then released from the Pledge.
"Pledged Treasury Portfolio Interest" means the Treasury Portfolio
Interest and security entitlements with respect thereto from time to time
credited to the Collateral Account and not then released from the Pledge.
"Pledged Treasury Securities" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, Cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the UCC) and other
property received, receivable or otherwise distributed upon the sale, exchange,
collection or disposition of any financial assets from time to time held in the
Collateral Account.
"Purchase Contract Agent" means the Person named as the "Purchase Contract
Agent" in the first paragraph of this instrument until a successor shall have
become such in accordance with the terms of the Purchase Contract Agreement, and
thereafter "Purchase Contract Agent" shall mean such successor.
"Purchase Contract Agreement" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"Purchase Contract Settlement Date" means November 15, 2005.
"Remarketing" means the remarketing of the Remarketing Senior Notes
pursuant to the Remarketing Procedures.
"Remarketing Fee" has the meaning set forth in Section 5.8(a).
"Remarketing Procedures" means, collectively, the procedures and
requirements relating to the Remarketing and the determination of the Reset Rate
as set forth in the Indenture, the Purchase Contract Agreement, this Agreement
and the Remarketing Agreement.
"Remarketing Senior Notes" has the meaning set forth in Section 5.8(a).
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"Remarketing Settlement Date" means the date of the settlement of any
Successful Remarketing, which will be three Business Days after such
Remarketing.
"Reset Rate" has the meaning set forth in the Indenture Officers'
Certificate.
"Securities Intermediary" means the Person named as the "Securities
Intermediary" in the first paragraph of this instrument until a successor shall
have become such in accordance with the terms of this Agreement, and thereafter
"Securities Intermediary" shall mean such successor.
"Separated Senior Notes" means any Senior Notes that are not Pledged
Senior Notes.
"Stated Amount" has the meaning specified in the second paragraph of the
recitals of this Agreement.
"Successful Remarketing" has the meaning specified in the Remarketing
Agreement.
"Three-Day Remarketing Period" means one or more three-day remarketing
periods that consist of three sequential possible remarketing dates selected by
the Company.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, an amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
"Transfer" means:
(1) in the case of certificated securities in registered form,
delivery as provided in Section 8-301(a) of the UCC, endorsed to the
transferee or in blank by an effective endorsement;
(2) in the case of Treasury Securities, registration of the
transferee as the owner of such Treasury Securities on TRADES; and
(3) in the case of security entitlements, including, without
limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security
entitlement has been credited to the transferee's securities account.
"Treasury Security" means a zero-coupon U.S. Treasury Security that has a
principal amount at maturity of $1,000 and matures on or prior to the Business
Day prior to the Purchase Contract Settlement Date.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.
"Value" means, with respect to any item of Collateral on any date, as to
(i) Cash, the face amount thereof, (ii) Senior Notes, the aggregate principal
amount thereof due at maturity and (iii)
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Treasury Securities, the aggregate principal amount thereof due at maturity and
(iv) Treasury Portfolio Interest, the aggregate principal amount thereof due at
maturity.
Section 2. Pledge.
Section 2.1 Pledge.
Each Holder from time to time, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, hereby pledges and grants to the
Collateral Agent, as agent of and for the benefit of the Company, a continuing
first priority security interest in and to, and a lien upon and right of set off
against, all of such Holder's right, title and interest in and to the Collateral
to secure the prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Obligations. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.
Section 2.2 Control; Financing Statement.
(a) The Collateral Agent shall have control of the Collateral
Account pursuant to the provisions of Section 4.3 of this Agreement.
(b) On the date of initial issuance of the PIES, the Company shall
file in the Office of the Secretary of State of the State of New York, a
financing statement identifying the Purchase Contract Agent, as attorney-in-fact
for the Holders, as debtors, and the Collateral Agent, as the secured party, and
describing the Collateral.
Section 2.3 Termination.
As to each Holder, this Agreement and the Pledge created hereby
shall terminate upon the satisfaction in full, discharge or termination of such
Holder's Obligations. Upon satisfaction in full, discharge or termination of
such Holder's Obligations and written notice thereof from the Company, the
Purchase Contract Agent or holders of at least 10% of the outstanding PIES to
the Securities Intermediary, the Securities Intermediary shall, Transfer any
remaining Collateral to the Purchase Contract Agent for distribution to such
Holder in accordance with its interest, free and clear of any lien, pledge or
security interest created hereby.
Section 3. Distributions on Pledged Collateral
Section 3.1 Income Distributions.
All income distributions, including interest payments received by
the Securities Intermediary or the Collateral Agent on account of the Pledged
Senior Notes, the Pledged Treasury Portfolio Interest or Permitted Investments
from time to time held in the Collateral Account, if any, shall be distributed
to the Purchase Contract Agent for the benefit of the applicable Holders in
whose names the Corporate PIES or Treasury PIES are registered at the close of
business on the Record Date (as specified in the Purchase Contract Agreement)
preceding the date of such distribution as provided in the Purchase Contract
Agreement. Notwithstanding the foregoing, income distributions, including
interest payments received by the Securities Intermediary or the Collateral
Agent on account of the Treasury Portfolio Interest shall not exceed the
Treasury Portfolio Return.
Section 3.2 Principal Payments Following Termination Event.
All payments received by the Collateral Agent or the Securities
Intermediary following a Termination Event with respect to (1) the Pledged
Senior Notes or security entitlement with respect thereto, (2) the Pledged
Treasury Portfolio Interest or security entitlement with respect thereto or (3)
the Pledged Treasury Securities or security entitlement with respect thereto
shall, in each case, be distributed to the Purchase Contract Agent for the
benefit of the applicable Holders in whose names the Corporate PIES or Treasury
PIES are registered at the close of business on the Record Date (as
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specified in the Purchase Contract Agreement) preceding the date of such
distribution for distribution to such Holders in accordance with their
respective interests.
Section 3.3 Principal Payments Prior to or On Purchase Contract Settlement
Date.
(a) Except as provided in clause 3.3(b) below, if the Securities
Intermediary and Collateral Agent have not received notice of a Termination
Event, all payments received by the Collateral Agent or the Securities
Intermediary of (1) the principal amount with respect to the Pledged Senior
Notes or security entitlement with respect thereto (2) the principal amount with
respect to the Pledged Treasury Portfolio Interest or security entitlement with
respect thereto or (3) the principal amount with respect to Pledged Treasury
Securities or security entitlement with respect thereto, shall be held and
invested at the written direction of the Company in Permitted Investments until
the Purchase Contract Settlement Date and on the Purchase Contract Settlement
Date distributed to the Company as provided in Section 5.8 hereof. Any balance
remaining in the Collateral Account shall be distributed to the Purchase
Contract Agent for the benefit of the applicable Holders for distribution to
such Holders in whose names the Corporate PIES or Treasury PIES are registered
at the close of business on the Record Date (as specified in the Purchase
Contract Agreement) immediately preceding the date of such distribution in
accordance with their respective interests. Upon the request of the Securities
Intermediary or the Collateral Agent, as applicable, the Company shall instruct
the Securities Intermediary or the Collateral Agent, as applicable, as to the
type of Permitted Investments in which any payments made under this Section
shall be invested, provided, however, that if the Company fails to deliver such
instructions by 10:30 a.m. (New York City time), the Securities Intermediary or
the Collateral Agent, as applicable, shall invest such payments in the Permitted
Investments described in clause 6 of the definition of Permitted Investments and
identified by the Company in the Account Direction.
(b) All payments received by the Collateral Agent or the Securities
Intermediary of (1) the principal amount with respect to the Pledged Senior
Notes or security entitlement with respect thereto (2) the principal amount with
respect to the Pledged Treasury Portfolio Interest or security entitlement with
respect thereto or (3) the principal amount of Pledged Treasury Securities or
security entitlement with respect thereto that, in each case, have been released
from the Pledge shall be distributed to the Purchase Contract Agent, for the
benefit of the Holders, to be distributed to such Holders in whose names the
Corporate PIES or Treasury PIES are registered at the close of business on the
Record Date (as specified in the Purchase Contract Agreement) immediately
preceding the date of such distribution in accordance with their respective
interests.
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Section 3.4 Payments to Purchase Contract Agent.
Payments to the Purchase Contract Agent hereunder shall be made to
the account designated by the Purchase Contract Agent for such purpose (which
shall be: The Bank of New York, ABA 021 000 018; Account Name: Sierra Pacific
Resources (Pies II); Account No. 229886, unless and until otherwise advised by
the Purchase Contract Agent) not later than 12:00 p.m. (New York City time), on
the Business Day such payment is received by the Collateral Agent or the
Securities Intermediary; provided, however, that if such payment is received by
the Collateral Agent or the Securities Intermediary on a day that is not a
Business Day or after 11:00 a.m. (New York City time) on a Business Day, then
such payment shall be made no later than 10:30 a.m. (New York City time), on the
next succeeding Business Day.
Section 3.5 Assets Not Properly Released.
If the Purchase Contract Agent or any Holder shall receive any
payments on account of financial assets credited to the Collateral Account and
not released therefrom in accordance with this Agreement, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for the
benefit of the Company and, upon receipt of an Officers' Certificate so
directing, promptly deliver the same to the Securities Intermediary for credit
to the Collateral Account or to the Company for application to the obligations
of the Holders under the related Purchase Contracts, and the Purchase Contract
Agent and Holders shall acquire no right, title or interest in any such payments
of amounts so received.
Section 4. Control.
Section 4.1 Establishment of Collateral Account.
The Securities Intermediary hereby confirms that:
(1) the Securities Intermediary has established the Collateral
Account;
(2) the Collateral Account is a securities account;
(3) subject to the terms of this Agreement, the Securities
Intermediary shall treat the Purchase Contract Agent as entitled to
exercise the rights that comprise any financial asset credited to the
Collateral Account;
(4) upon delivery to the Securities Intermediary of any property,
including Cash, pursuant to this Agreement, the Purchase Contract
Agreement or the Indenture, the Securities Intermediary will promptly
indicate by book-entry that such property has been credited to the
Collateral Account; and
(5) except with respect to the Pledged Senior Notes, which shall be
registered in the name of the Purchase Contract Agent, all securities,
securities entitlements or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Securities Intermediary, endorsed to the Securities Intermediary, or in
blank or credited to another securities account maintained in the name of
the Securities Intermediary, and in no case will any financial asset or
other property credited to the Collateral Account be registered in the
name of the Purchase Contract Agent or any Holder, payable to the order of
the Purchase Contract Agent or any Holder or specially endorsed to the
Purchase Contract Agent or any Holder.
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Section 4.2 Treatment as Financial Assets.
Each item of property (whether investment property, financial asset,
security, security entitlement, instrument or Cash) credited to the Collateral
Account shall be treated as a financial asset under Article 8 of the UCC.
Section 4.3 Sole Control by Collateral Agent.
Except as provided in Section 6, at all times prior to the
termination of the Pledge, the Collateral Agent shall have sole control of the
Collateral Account, and the Securities Intermediary shall take instructions and
directions with respect to the Collateral Account solely from the Collateral
Agent. If at any time the Securities Intermediary shall receive an entitlement
order issued by the Collateral Agent and relating to the Collateral Account, the
Securities Intermediary shall comply with such entitlement order without further
consent by the Purchase Contract Agent or any Holder or any other Person. Until
termination of the Pledge, the Securities Intermediary will not comply with any
entitlement orders issued by the Purchase Contract Agent or any Holder.
Section 4.4 Securities Intermediary's Location.
The Collateral Account and the rights and obligations of the
Securities Intermediary, the Collateral Agent, the Purchase Contract Agent and
the Holders with respect thereto shall be governed by the laws of the State of
New York. Regardless of any provision in any other agreement, for purposes of
the UCC, New York shall be deemed to be the Securities Intermediary's location
and jurisdiction.
Section 4.5 No Other Claims.
Except for the claims and interest of the Collateral Agent, the
Company, the Purchase Contract Agent and the Holders in the Collateral Account,
the Securities Intermediary does not know of any claim to, or interest in, the
Collateral Account or in any financial asset credited thereto. If any Person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the
Collateral Account or in any financial asset carried therein, the Securities
Intermediary, upon receiving written notice thereof, will promptly notify the
Collateral Agent, the Purchase Contract Agent and the Company.
Section 4.6 Investment and Release.
All proceeds of financial assets from time to time deposited in the
Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement or
upon written instructions of the Collateral Agent.
Section 4.7 Statements and Confirmations.
The Securities Intermediary will promptly send copies of all
statements, confirmations and other correspondence concerning the Collateral
Account and any financial assets credited thereto simultaneously to each of the
Collateral Agent, the Purchase Contract Agent and the Company at their addresses
for notices under this Agreement.
Section 4.8 Tax Allocations.
The Company shall report all items of income, gain, expense and loss
recognized in the Collateral Account to the Internal Revenue Service and all
state and local taxing authorities under the names and taxpayer identification
numbers of the Holders that are the beneficial owners thereof. None of the
Collateral Agent, the Securities Intermediary or the Purchase Contract Agent
shall have any responsibility for such tax reporting.
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Section 4.9 No Other Agreements.
The Securities Intermediary has not entered into, and prior to the
termination of the Pledge will not enter into, any agreement with any other
Person relating to the Collateral Account or any financial assets credited
thereto, including, without limitation, any agreement to comply with entitlement
orders of any Person other than the Collateral Agent.
Section 4.10 Powers Coupled With An Interest.
The rights and powers granted in this Section 4 to the Collateral
Agent have been granted in order to perfect its security interests in the
Collateral Account, are powers coupled with an interest and will be affected
neither by the bankruptcy of the Purchase Contract Agent or any Holder nor by
the lapse of time. The obligations of the Securities Intermediary under this
Section 4 shall continue in effect until the termination of the Pledge.
Section 5. Initial Deposit; Creation of Treasury PIES; and Recreation of
Corporate PIES; Other.
Section 5.1 Initial Deposit of Senior Notes.
Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Corporate PIES, shall Transfer to the Securities Intermediary, and the
Securities Intermediary shall accept, for credit to the Collateral Account, the
Senior Notes or security entitlements relating to such Senior Notes, and the
Securities Intermediary shall indicate by book entry that a security entitlement
with respect to such Senior Notes has been credited to the Collateral Account.
Section 5.2 Creation of Treasury PIES by Substitution of Treasury
Securities.
(a) A Holder of Corporate PIES may separate their interests in
Senior Notes from the related Purchase Contracts in respect of such Holder's
Corporate PIES by substituting Treasury Securities for such interests in Senior
Notes or security entitlements thereto in an aggregate principal amount equal to
the aggregate principal amount of such interests in Senior Notes, at any time
from and after the date of this Agreement except during an Active Remarketing
Period by:
(1) providing notice to the Purchase Contract Agent, substantially
in the form of Exhibit C to the Purchase Contract Agreement, of such
Holder's intention to create Treasury PIES;
(2) transferring a Treasury Security for each group of 20 Corporate
PIES from which such Holder wishes to create Treasury PIES to the
Securities Intermediary which shall then (y) deposit the Treasury Security
with the Collateral Agent in the Collateral Account under this Agreement
and instruct the Collateral Agent to hold such Treasury Security as
Collateral under this Agreement and (z) instruct the Collateral Agent to
release to the Purchase Contract Agent, on behalf of such Holder, $1,000
principal amount of Senior Notes formerly subject to the Pledge;
(3) transferring the related Corporate PIES to the Purchase Contract
Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit D to the Purchase Contract Agreement,
stating that the Holder has transferred the relevant amount of Treasury
Securities to the Securities Intermediary and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release the Senior Notes
associated with such Corporate PIES, whereupon the Purchase Contract Agent
shall
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promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit A hereto; and
(4) paying to the Collateral Agent any fees or expenses incurred in
connection with the Collateral Substitution;
provided that, Holders may make Collateral Substitutions only in integral
multiples of 20 Corporate PIES. Under no circumstances may a Holder of Corporate
PIES create Treasury PIES during an Active Remarketing Period.
Upon receipt from the Purchase Contract Agent of a notice
substantially in the form of Exhibit A hereto, confirmation from the Securities
Intermediary that Treasury Securities have been credited to the Collateral
Account and receipt of payment for any fees or expenses incurred in connection
with the Collateral Substitution, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of Exhibit B
hereto, to release such Pledged Senior Notes from the Pledge by Transfer the
Purchase Contract Agent for distribution to such Holder thereof, free and clear
of any lien, pledge or security interest created hereby.
(b) Upon credit to the Collateral Account of Treasury Securities or
security entitlements thereto delivered by a Holder of Corporate PIES and
receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release the Senior Notes specified in such instruction and
shall promptly Transfer the same to the Purchase Contract Agent for distribution
to such Holder, free and clear of any lien, pledge or security interest created
hereby.
A Holder may elect not to participate in the Remarketing by creating
Treasury PIES as specified in this Section and Section 5.3(c) of the Purchase
Contract Agreement at any time except during an Active Remarketing Period.
(c) Notwithstanding any provision herein to the contrary, the
release and Transfer of the Pledged Senior Notes in connection with the
Collateral Substitution pursuant to this Section 5.2 shall be evidenced by an
endorsement by the Collateral Agent on the Pledged Senior Note held by the
Collateral Agent reflecting a reduction in the principal amount of such Pledged
Senior Note equal in amount to the principal amount of such Separated Senior
Note. The Collateral Agent shall confirm any such reduced principal amount by
telecopying or otherwise delivering a photocopy of such endorsement made on the
Pledged Senior Note evidencing such reduced principal amount to the Trustee and
the Company. Upon receipt of such confirmation, the Trustee shall instruct the
Custodian (as defined in the Indenture Officers' Certificate) to increase the
principal amount of the Senior Notes issued in global form held by the Custodian
in an amount equal to the reduced principal amount by an endorsement made the
Custodian on such global Senior Note to reflect such increase.
Section 5.3 Recreation of Corporate PIES. (a) A Holder of a Treasury PIES
may recreate Corporate PIES at any time except during an Active Remarketing
Period by:
(1) providing notice to the Purchase Contract Agent, substantially
in the form of Exhibit C of the Purchase Contract Agreement, of such
Holder's intention to create Corporate PIES;
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(2) transferring a $1,000 principal amount Senior Note for each
group of 20 Corporate PIES to be recreated to the Securities Intermediary
which shall then (y) deposit such Senior Notes in the Collateral Account
under this Agreement and instruct the Collateral Agent to hold such Senior
Notes as Collateral and (z) instruct the Collateral Agent to release to
such Holder one (1) Treasury Security formerly subject to the Pledge;
(3) transferring the related Treasury PIES to the Purchase Contract
Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit D of the Purchase Contract Agreement,
(i) stating that the Holder has transferred a $1,000 principal amount
Senior Note for each 20 Treasury PIES to the Securities Intermediary and
(ii) requesting that the Purchase Contract Agent instruct the Collateral
Agent to release the Treasury Securities underlying such Treasury PIES,
whereupon the Purchase Contract Agent shall promptly give such instruction
to the Collateral Agent, substantially in the form of Exhibit C hereto;
and
(4) paying to the Collateral Agent any fees or expenses incurred in
connection with the recreation of Corporate PIES;
provided that, Holders of Treasury PIES may recreate Corporate PIES in integral
multiples of 20 Treasury PIES. Under no circumstance may a Holder of Treasury
PIES recreate Corporate PIES during an Active Remarketing Period.
Upon receipt from the Purchase Contract Agent of a notice
substantially in the form of Exhibit C hereto, confirmation that Senior Notes or
security entitlements thereto have been credited to the Collateral Account as
described in such notice and receipt of payment for any fees or expenses
incurred in connection with the recreation of Corporate PIES, the Collateral
Agent shall instruct the Securities Intermediary by a notice, substantially in
the form provided in Exhibit D hereto, to release such Pledged Treasury
Securities from the Pledge by Transfer to the Holder thereof.
(b) Upon credit to the Collateral Account of Senior Notes or
security entitlements thereto and receipt of the related instruction from the
Collateral Agent, the Securities Intermediary shall release the applicable
Treasury Securities specified in such instruction and shall promptly Transfer
the same to such Holder, free and clear of any lien, pledge or security interest
created hereby.
(c) Notwithstanding any provision herein to the contrary, the
Transfer of the Senior Notes in connection with the recreation of Corporate PIES
pursuant to this Section 5.3 shall be evidenced by an endorsement by the
Collateral Agent on the Pledged Senior Note held by the Collateral Agent
reflecting an increase in the principal amount of such Pledged Senior Note equal
in amount to the principal amount of such Senior Note. The Collateral Agent
shall confirm any such increased principal amount by telecopying or otherwise
delivering a photocopy of such endorsement made on the Pledged Senior Note
evidencing such increased principal amount to the Trustee and the Company. Upon
receipt of such confirmation, the Trustee shall instruct the Custodian (as
defined in the Indenture Officers' Certificate) to decrease the principal amount
of Senior Notes issued in global form held by the Custodian in an amount equal
to the increased principal amount by an endorsement made by the Custodian on
such global Senior Note to reflect such decrease.
14
Section 5.4 Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer any Pledged Senior Notes or security entitlement with respect
thereto, any Pledged Treasury Portfolio Interest or security entitlement with
respect thereto and any Pledged Treasury Securities or security entitlement with
respect thereto to the Purchase Contract Agent for the benefit of the Holders,
for distribution to such Holders in accordance with their respective interests,
free and clear of any lien, pledge or security interest or other interest
created hereby.
(b) If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall
for any reason fail promptly to effectuate the release and Transfer of all
Pledged Senior Notes, the Pledged Treasury Portfolio Interest or the Pledged
Treasury Securities or security entitlements with respect thereto, as the case
may be, as provided by this Section 5.4, the Purchase Contract Agent shall:
(1) request an opinion letter of a nationally recognized law firm
reasonably acceptable to the Collateral Agent to the effect that, as a
result of the Company's being the debtor in such a bankruptcy case, the
Collateral Agent will not be prohibited from releasing or Transferring the
Collateral as provided in this Section 5.4, and shall deliver such opinion
to the Collateral Agent within ten days after the occurrence of such
Termination Event, and if (A) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such
Termination Event or (B) the Collateral Agent shall continue, after
delivery of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Senior Notes, all Pledged Treasury Portfolio Interest, all
Pledged Treasury Securities or the Proceeds of any of the foregoing, as
the case may be, as provided in this Section 5.4, then the Purchase
Contract Agent shall within thirty days after the occurrence of such
Termination Event commence an action or proceeding in the court having
jurisdiction of the Company's case under the Bankruptcy Code seeking an
order requiring the Collateral Agent to effectuate the release and
transfer of all Pledged Senior Notes, all Pledged Treasury Portfolio
Interest or all the Pledged Treasury Securities or security entitlements
with respect thereto, as the case may be, as provided by this Section 5.4;
or
(2) commence an action or proceeding like that described in Section
5.4(b)(1)(B) hereof within ten days after the occurrence of such
Termination Event.
The Purchase Contract Agent shall be deemed to have complied with Section
5.4(b)(1), and shall not be required to commence any action or proceeding
referred to therein, if it shall have either obtained such an opinion letter or
requested such an opinion from three such nationally recognized law firms
reasonably acceptable to the Collateral Agent.
Section 5.5 Cash Settlement.
(a) Unless a Holder has effected an Early Settlement or a Merger
Early Settlement or a Successful Remarketing during the Period for Early
Remarketing has occurred, in the case of Corporate PIES, and unless a
Termination Event has occurred prior to dates required for notice to elect the
Cash Settlement right specified in the Purchase Contract Agreement and the
Collateral Agent has received written notice from the Company, the Purchase
Contract Agent or, in the case of a Termination Event, from the holders of at
least 10% of the outstanding PIES of such Early Settlement, Merger Early
Settlement, Successful Remarketing or
15
Termination Event, as the case may be, upon receipt by the Collateral Agent of
(1) a notice from the Purchase Contract Agent (including a copy of such notice
received from the Holder substantially in the form of Exhibit F to the Purchase
Contract Agreement) promptly after the receipt by the Purchase Contract Agent of
a notice from a Holder of a Corporate PIES or a Treasury PIES that it has
elected, in accordance with the procedures specified in Section 5.8(a)(i) or
(b)(i) of the Purchase Contract Agreement, respectively, to effect a Cash
Settlement and (2) payment by such Holder by deposit in the Collateral Account
on or prior to 11:00 a.m. (New York City time), on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date in the case of
Corporate PIES, and the Business Day immediately preceding the Purchase Contract
Settlement Date in the case of the Treasury PIES, of the Purchase Price in
lawful money of the United States by certified or cashiers' check or wire
transfer, in each case of immediately available funds payable to or upon the
order of the Securities Intermediary, then the Collateral Agent shall upon
receipt of written directions from the Company:
(1) instruct the Securities Intermediary promptly to invest any such
Cash in Permitted Investments;
(2) release from the Pledge (i) in the case of a Holder of Corporate
PIES, the related Pledged Senior Notes, or (ii) in the case of a Holder of
Treasury PIES, the related Pledged Treasury Securities, with a principal
amount or principal amount at maturity, as the case may be, equal to the
product of (x) the Stated Amount times (y) the number of Purchase
Contracts as to which such Holder has elected to effect a Cash Settlement;
and
(3) instruct the Securities Intermediary to Transfer all such
Pledged Senior Notes or Pledged Treasury Securities, as the case may be,
to the Purchase Contract Agent for the benefit of such Holders, in each
case free and clear of the Pledge created hereby, for distribution to such
Holder.
The Company shall instruct the Securities Intermediary as to the
type of Permitted Investments in which any such Cash shall be invested;
provided, however, that if the Company fails to deliver such instructions by
10:00 a.m. (New York City time), the Securities Intermediary shall invest such
Cash in the Permitted Investments described in clause 6 of the definition of
Permitted Investments and identified by the Company in the Account Direction.
Upon receipt of the proceeds upon the maturity of the Permitted Investments on
the Purchase Contract Settlement Date, the Collateral Agent shall (A) instruct
the Securities Intermediary to pay the portion of such proceeds and deliver any
certified or cashier's checks received, in an aggregate amount equal to the
Purchase Price, to the Company on the Purchase Contract Settlement Date, and (B)
instruct the Securities Intermediary to release any amounts in respect of the
interest earned from such Permitted Investments to the Purchase Contract Agent
for distribution to such Holder.
(b) If a Holder of a Corporate PIES notifies the Purchase Contract
Agent as provided in Section 5.8(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.8(a)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have consented to (A) the disposition of the Pledged Senior
Notes in the Final Remarketing Period in accordance with Section 5.3 of the
Purchase Contract Agreement or, (B) if a Failed Remarketing occurs the
Collateral Agent, for the benefit of the Company, and upon written direction of
the Company as provided in this Agreement, exercising all of its rights as a
secured party with respect to any
16
Pledged Senior Notes under this Agreement and, subject to applicable law, by
either (i) retaining such Senior Notes in full satisfaction of such Holder's
obligations under the related Purchase Contracts or (ii) selling such Senior
Notes in one or more public or private sales.
(c) If a Holder of a Treasury PIES notifies the Purchase Contract
Agent as provided in Section 5.8(b)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.8(b)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have elected to pay the Purchase Price in accordance with
Section 5.8(b) hereof.
(d) Prior to 3:00 p.m. (New York City time), on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating the amount of cash that
it has received with respect to the Cash Settlement of Corporate PIES.
(e) Prior to 3:00 p.m. (New York City time), on the Business Day
immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating the amount of cash that
it has received with respect to the Cash Settlement of Treasury PIES.
Section 5.6 Early Settlement; Merger Early Settlement.
Unless a Termination Event has occurred and the Collateral Agent has
received from the Company or the Purchase Contract Agent or holders of at least
10% of the outstanding PIES written notice of such Termination Event, upon
receipt by the Collateral Agent of a notice from the Purchase Contract Agent
that a Holder of PIES has elected to effect Early Settlement or Merger Early
Settlement of its obligations under the Purchase Contracts forming a part of
such PIES in accordance with the terms of the Purchase Contracts and the
Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to effect Early
Settlement or Merger Early Settlement), and that the Purchase Contract Agent has
received from such Holder, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts or Merger Early Settlement
Amounts, as applicable, pursuant to the terms of the Purchase Contract Agreement
and all conditions to such Early Settlement or Merger Early Settlement, as
applicable, have been satisfied, then the Collateral Agent shall release from
the Pledge, (1) Pledged Senior Notes, or Pledged Treasury Portfolio Interest, as
the case may be, in the case of a Holder of Corporate PIES, or (2) Pledged
Treasury Securities, in the case of a Holder of Treasury PIES, with a Value
equal to the product of (i) the Stated Amount times (ii) the number of Purchase
Contracts as to which such Holder has elected to effect Early Settlement or
Merger Early Settlement, as applicable, and shall instruct the Securities
Intermediary to Transfer all such Pledged Senior Notes, Pledged Treasury
Portfolio Interest or Pledged Treasury Securities, as the case may be, to the
Purchase Contract Agent for the benefit of such Holder, in each case free and
clear of the Pledge created hereby, for distribution to such Holder.
Notwithstanding anything to the contrary contained herein, Holders
may not effect Early Settlement during an Active Remarketing Period and Holders
may effect Early Settlement or Merger Early Settlement of PIES only in integral
multiples of 20 Corporate PIES or 20 Treasury PIES.
17
Section 5.7 Optional Remarketing.
Pursuant to the Indenture and the Remarketing Agreement, on or prior
to 5:00 p.m. (New York City time) on the second Business Day, but no earlier
than the fifth Business Day, preceding the first of the three sequential
remarketing dates of any Three-Day Remarketing Period, registered holders of
Separated Senior Notes may elect to have their Separated Senior Notes remarketed
by Transferring their Separated Senior Notes, together with a notice of such
election, substantially in the form of Exhibit F hereto and Exhibit B to the
Indenture Officers' Certificate, to the Collateral Agent and the Trustee,
respectively, whereupon, the Collateral Agent shall hold such Separated Senior
Notes in an account separate from the Collateral Account and cause such
Separated Senior Notes to be included in any Remarketing pursuant to the
Indenture and the Remarketing Procedures. Once such holder of such Separated
Senior Notes delivers such notice and Separated Senior Notes as specified in the
preceding sentence, such election may not be withdrawn and may not be
conditioned upon the level at which the Reset Rate is established in the
Remarketing; provided, however, that if such a holder delivers only such a
notice but not the Separated Senior Notes subject to the notice, then none of
such holders' Separated Senior Notes shall be included in the Remarketing.
If a Failed Remarketing occurs, the Remarketing Agents shall notify
the Company, the Depositary, the Purchase Contract Agent, the Collateral Agent
and the Trustee by telephone by 4:00 p.m. (New York City time) on the Final
Remarketing Date that a Failed Remarketing has occurred and shall Transfer to
the Collateral Agent, by the third Business Day following the Failed
Remarketing, such Separated Senior Notes, whereupon the Collateral Agent shall
promptly Transfer such Separated Senior Notes to the holders entitled thereto.
18
Section 5.8 Application of Proceeds in Settlement; Remarketing.
(a) During the Period for Early Remarketing, unless a Termination
Event has occurred or a Holder has effected an Early Settlement or a Merger
Early Settlement and the Collateral Agent has received written notice of such
Termination Event, Early Settlement, or Merger Early Settlement from the Company
or the Purchase Contract Agent or, in the case of a Termination, Holders of at
least 10% of the Outstanding PIES, (i) the Purchase Contract Agent shall provide
notice, substantially in the form of Exhibit G to the Purchase Contract
Agreement by 11:00 a.m. (New York City time), on the Business Day immediately
preceding the first of the three sequential remarketing dates of any Three-Day
Remarketing Period, to the Remarketing Agents, the Collateral Agent, the Trustee
and the Company of the aggregate principal amount of Pledged Senior Notes
comprising part of Corporate PIES to be remarketed, other than those Pledged
Senior Notes of Holders that have elected not to participate in the Remarketing
pursuant to paragraph 19(i)(B) of the Indenture Officers' Certificate and
Section 5.3(c) of the Purchase Contract Agreement (of which the Purchase
Contract Agent has delivered written notice thereof to the Collateral Agent,
substantially in the form of Exhibit G hereto), and (ii) the Collateral Agent
shall notify, by 11:00 a.m. (New York City time), on the Business Day
immediately preceding the first of the three sequential remarketing dates of any
Three-Day Remarketing Period, the Remarketing Agents, the Trustee and the
Company of the aggregate principal amount of Separated Senior Notes of holders
of Separated Senior Notes that have elected to participate in the Remarketing
(the Senior Notes described in clauses (i) and (ii) collectively being referred
to as the "Remarketing Senior Notes") and, concurrently therewith, the
Collateral Agent shall, without any further instruction from any holder of the
Remarketing Senior Notes, present all Remarketing Senior Notes to the
Remarketing Agents for Remarketing.
If there has been a Successful Remarketing prior to the Final
Remarketing Period, the Remarketing Agents will on such Remarketing Settlement
Date (i) deduct and retain as a remarketing fee an amount pursuant to the
Remarketing Agreement (the "Remarketing Fee"), (ii) use the remaining Proceeds
with respect to the Pledged Senior Notes from such Successful Remarketing to
purchase the Treasury Portfolio and, on the Remarketing Settlement Date, deliver
such Treasury Portfolio to the Collateral Agent, along with notification
thereof, which shall thereupon, for the benefit of the Company, apply such
Treasury Portfolio, to secure the obligation of all Holders of Corporate PIES to
purchase Common Stock under the Purchase Contracts constituting a part of such
Corporate PIES, in substitution for the Pledged Senior Notes, (iii) if any
Separated Senior Notes were remarketed, remit to the Collateral Agent, along
with notification thereof, for payment to the holders of such Separated Senior
Notes sold in the Remarketing the remaining proceeds from such Successful
Remarketing attributable to such Separated Senior Notes and (iv) if there then
remains any proceeds from such Successful Remarketing, after the application of
such proceeds as set forth in clauses (i) and (ii) above, then remit, along with
notification thereof, any such remaining proceeds attributable to the remarketed
Pledged Senior Notes to the Purchase Contract Agent for the benefit of the
holders of such Pledged Senior Notes, on a pro rata basis, provided, however,
that if such Successful Remarketing is consummated after 4:30 p.m. (New York
City time) on such Remarketing Settlement Date and, despite using its
commercially reasonable efforts, the Remarketing Agents cannot cause the
applications of the proceeds specified above to occur on such Remarketing
Settlement Date, then the Remarketing Agents may make such applications and
remittances on the next succeeding Business Day. Holders of the Remarketing
Senior Notes that are so remarketed will not otherwise be responsible for the
payment of any remarketing fee or expenses
19
in connection with the Remarketing. Following the delivery of the Treasury
Portfolio to the Collateral Agent as set forth above in this paragraph, the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Senior
Notes, as provided herein.
In the event that any portion of the Pledged Treasury Portfolio
Interest matures before the Purchase Contract Settlement Date, the Collateral
Agent shall invest the Cash Proceeds therefrom in Permitted Investments in
clause 6 of the definition of Permitted Investments, and identified by the
Company in the Account Direction, unless the Company shall otherwise instruct
the Securities Intermediary and the Collateral Agent as to the type of Permitted
Investments in which any such Cash Proceeds shall be invested. The Collateral
Agent shall cause the Securities Intermediary to remit, on the Purchase Contract
Settlement Date, a portion of the Cash Proceeds of the maturing Pledged Treasury
Portfolio Interest and of the investment earnings from the related investment in
Permitted Investments, in an aggregate amount equal to the Treasury Portfolio
Return to the Purchase Contract Agent for the benefit of the Holders of the
related Corporate PIES when received. Without receiving any instruction from any
such Holder of Corporate PIES, the Collateral Agent shall apply, on the Purchase
Contract Settlement Date, the Cash Proceeds of the maturing Pledged Treasury
Portfolio Interest and of the investment earnings from the related investment in
Permitted Investments, in an aggregate amount equal to the aggregate Purchase
Price applicable to such Corporate PIES to satisfy in full such Holder's
obligations to pay the Purchase Price to purchase the shares of Common Stock
under the related Purchase Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury Portfolio
Interest and the investment earnings from the related investment in Permitted
Investments exceeds the sum of the related Treasury Portfolio Return and the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent shall instruct the Securities Intermediary to distribute such
excess, when received, to the Purchase Contract Agent for distribution to the
Holders whose Purchase Contracts were settled with such Proceeds, on a pro rata
basis.
If, by 4:00 p.m. (New York City time), on the ninth Business Day
preceding the Purchase Contract Settlement Date, the Remarketing Agents, despite
using its commercially reasonable efforts, have been and are unable to remarket
all of the Remarketing Senior Notes tendered for purchase at a price equal to at
least the Remarketing Value, the Remarketing Agents shall Transfer to the
Collateral Agent, along with notification thereof, by the sixth Business Day
preceding the Purchase Contract Settlement Date, the Pledged Senior Notes that
were to be remarketed during the Period for Early Remarketing, whereupon the
Collateral Agent shall, for the benefit of the Company, apply such Pledged
Senior Notes, to secure the obligation of the related Holders of Corporate PIES
to purchase Common Stock under the related Purchase Contracts.
(b) Unless a Termination Event has occurred or a Holder has effected
a Cash Settlement, an Early Settlement or a Merger Early Settlement, or a
Successful Remarketing has occurred during the Period for Early Remarketing,
such Holder shall be deemed to have consented to the Remarketing of its Pledged
Senior Notes during the Final Remarketing on the Final Remarketing Date, in a
Remarketing in accordance with Section 2 of the Remarketing Agreement. Upon
notice of such event from the Purchase Contract Agent, the Collateral Agent
shall, by 11:00 a.m. (New York City time), on the sixth Business Day immediately
preceding the
20
Purchase Contract Settlement Date, without any instruction from such Holders of
Corporate PIES, Transfer the Remarketing Senior Notes to the Remarketing Agents
for Remarketing. Upon receiving such Remarketing Senior Notes, the Remarketing
Agents, pursuant to the terms of the Remarketing Agreement, will use their
commercially reasonable efforts to remarket such Remarketing Senior Notes during
the Final Remarketing Period.
If there has been a Successful Remarketing during the Final
Remarketing Period, the Remarketing Agents will on such remarketing date (i)
deduct and retain the Remarketing Fee pursuant to the Remarketing Agreement,
(ii) cause the remaining Proceeds of the Remarketing with respect to the Pledged
Senior Notes in an amount equal to the aggregate principal amount of such Senior
Notes to be delivered to the Purchase Contract Agent, on the Remarketing
Settlement Date, (iii), if any Separated Senior Notes were remarketed, remit to
the Collateral Agent, along with notification thereof, for payment to the
holders of such Separated Senior Notes sold in the Remarketing the remaining
proceeds from such Successful Remarketing attributable to the Separated Senior
Notes and (iv) if there then remains any proceeds from such Successful
Remarketing, after the application of such proceeds as set forth in clauses (i)
and (ii) above, remit, along with notification thereof, any excess Proceeds of
the Remarketing to the Purchase Contract Agent for the benefit of the Holders of
Corporate PIES whose Pledged Senior Notes were remarketed, on a pro rata basis.
Holders of the Remarketing Senior Notes that are so remarketed will not
otherwise be responsible for the payment of any remarketing fee or expenses in
connection with the Remarketing. The Purchase Contract Agent shall give written
directions to the Collateral Agent, and the Collateral Agent shall instruct the
Securities Intermediary, to apply a portion of the Proceeds with respect to the
Pledged Senior Notes from such Remarketing, on the Purchase Contract Settlement
Date, equal to the aggregate principal amount of such Pledged Senior Notes to
satisfy in full the obligations of such Holders of Corporate PIES to pay the
Purchase Price to purchase the shares of Common Stock under the related Purchase
Contracts.
If a Failed Remarketing occurs, the Collateral Agent, (a) having
received notice of such Failed Remarketing from the Remarketing Agents pursuant
to the Remarketing Agreement, shall, on the written direction of the Company,
exercise for the benefit of the Company, its rights as a secured creditor with
respect to the Pledged Senior Notes related to this Corporate PIES Certificate
and (b) subject to applicable law, may (i) retain such Pledged Senior Notes in
full satisfaction of the Holders' obligations under the Purchase Contracts or
(ii) sell such Pledged Senior Notes in one or more public or private sales, the
proceeds, if any, of such sale to constitute full satisfaction of the Holders'
obligations under the Purchase Contracts.
(c) Unless a Termination Event has occurred or a Holder has effected
a Cash Settlement, an Early Settlement or a Merger Early Settlement, if a
Successful Remarketing has occurred during the Period for Early Remarketing, a
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contracts from the Proceeds of the Pledged
Treasury Portfolio, in the case of Holders of Corporate PIES, and the related
Pledged Treasury Securities, in the case of Holders of Treasury PIES.
(d) In the event that all or any portion of the Pledged Treasury
Securities matures before the Purchase Contract Settlement Date, the Collateral
Agent shall invest the Cash Proceeds therefrom in Permitted Investments in
clause 6 of the definition of Permitted Investments and identified by the
Company in the Account Direction, unless the Company shall
21
otherwise instruct the Securities Intermediary and the Collateral Agent as to
the type of Permitted Investments in which any such Cash Proceeds shall be
invested.
(e) Without receiving any instruction from any such Holder of
Treasury PIES, the Collateral Agent shall apply, on the Purchase Contract
Settlement Date, the Cash Proceeds of the maturing Pledged Treasury Securities
and of the investment earnings from the related investment in Permitted
Investments, in each case, in an amount equal to the aggregate Purchase Price
applicable to such Treasury PIES to satisfy in full such Holder's obligations to
pay the Purchase Price to purchase the shares of Common Stock under the related
Purchase Contracts on the Purchase Contract Settlement Date. In the event the
sum of the Proceeds from the related Pledged Treasury Securities and the
investment earnings from the related investment in Permitted Investments exceeds
the aggregate Purchase Price of the Purchase Contracts being settled thereby,
the Collateral Agent shall instruct the Securities Intermediary to distribute
such excess, when received, to the Purchase Contract Agent for distribution to
the Holders whose Purchase Contracts were settled with such Proceeds, on a pro
rata basis.
(f) Notwithstanding the Pledge and, if applicable, the delivery of
Separated Senior Notes to the Collateral Agent for Remarketing, in each case, as
set forth herein, the Company's obligation to pay interest, including any
accrued and unpaid, on all outstanding Senior Notes (whether then comprising a
part of Corporate PIES or as Separated Senior Notes) pursuant to the Indenture
shall remain.
Section 6. Voting Rights.
The Purchase Contract Agent may exercise, or refrain from
exercising, any and all voting and other consensual rights pertaining to the
Pledged Senior Notes or any part thereof in accordance with the terms of the
Purchase Contract Agreement. The Purchase Contract Agent shall give the Company
and the Collateral Agent at least five calendar days' prior written notice of
the manner in which it intends to exercise, or its reasons for refraining from
exercising, any such right. Upon receipt of any notices and other communications
in respect of any Pledged Senior Notes, including notice of any meeting at which
holders of the Senior Notes are entitled to vote or solicitation of consents,
waivers or proxies of holders of the Senior Notes, the Collateral Agent shall
use its reasonable efforts to send promptly to the Purchase Contract Agent such
notice or communication, and as soon as reasonably practicable after receipt of
a written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such Pledged Senior Notes (in form and substance satisfactory to the Collateral
Agent) as are prepared by the Purchase Contract Agent with respect to the
Pledged Senior Notes.
Section 7. Rights and Remedies.
Section 7.1 Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 5.5
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (i) retention of the Pledged
Senior Notes, Pledged Treasury Portfolio Interest or Pledged Treasury Securities
in full satisfaction of the Holders' obligations under the Purchase Contracts or
(ii) sale of the Pledged
22
Senior Notes, Pledged Treasury Portfolio Interest or Pledged Treasury Securities
in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Securities or on account of any Pledged Treasury Portfolio Interest as
provided in Section 3 hereof, in satisfaction of the Obligations of the Holder
of the PIES of which such Pledged Treasury Securities or Pledged Treasury
Portfolio Interest are a part under the related Purchase Contracts, the
inability to make such payments shall constitute an event of default hereunder
and the Collateral Agent shall have and may exercise and, upon receiving written
instructions from the Company pursuant to and in accordance with Section 9.2
shall exercise, with reference to such Pledged Treasury Securities or Pledged
Treasury Portfolio Interest, as applicable, any and all of the rights and
remedies available to a secured party under the UCC and the TRADES Regulations
after default by a debtor, and as otherwise granted herein or under any other
law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Senior Notes, (ii) the principal amount of the Pledged Treasury
Securities and (iii) the principal amount of the Pledged Treasury Portfolio
Interest, subject, in each case, to the provisions of Section 3 hereof, and as
otherwise granted herein.
(d) Subject to Section 9.1, the Purchase Contract Agent and each
Holder of PIES agrees that, from time to time, upon the written request of the
Collateral Agent, the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own grossly negligent
acts, its own grossly negligent failure to act or its own willful misconduct.
Section 7.2 Substitutions.
Whenever a Holder has the right to substitute Treasury Securities,
Senior Notes or security entitlements to either of them for financial assets
held in the Collateral Account, such substitution shall not constitute a
novation of the security interest created hereby.
Section 8. Representations and Warranties; Covenants.
Section 8.1 Representations and Warranties.
Each Holder from time to time, acting through the Purchase Contract
Agent as attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represents and warrants to the Collateral Agent (with respect to
its interest in the Collateral), which representations and warranties shall be
deemed repeated on each day a Holder Transfers Collateral that:
(1) such Holder has the power to grant a security interest in and
lien on the Collateral;
23
(2) such Holder is the sole beneficial owner of the Collateral and,
in the case of Collateral delivered in physical form, is the sole holder
of such Collateral and is the sole beneficial owner of, or has the right
to Transfer, the Collateral it Transfers to the Securities Intermediary
for credit to the Collateral Account, free and clear of any security
interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under
Section 2 hereof;
(3) upon the Transfer of the Collateral to the Securities
Intermediary for credit to the Collateral Account, the Collateral Agent,
for the benefit of the Company, will have a valid and perfected first
priority security interest therein (assuming that any central clearing
operation or any Securities Intermediary or other entity not within the
control of the Holder involved in the Transfer of the Collateral,
including the Collateral Agent and the Securities Intermediary, gives the
notices and takes the action required of it hereunder and under applicable
law for perfection of that interest and assuming the establishment and
exercise of control pursuant to Section 4 hereof); and
(4) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security
interest, lien or other encumbrance on the Collateral other than the
security interest and lien granted under Section 2 hereof or violate any
provision of any existing law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or undertaking to which it
is a party or which is binding on it or any of its assets.
Section 8.2 Covenants.
The Purchase Contract Agent and the Holders from time to time,
acting through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any covenant
made by or on behalf of a Holder), hereby covenant to the Collateral Agent that
for so long as the Collateral remains subject to the Pledge:
(1) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien,
pledge or any other security interest whatsoever over the Collateral or
any part of it other than pursuant to this Agreement; and
(2) neither the Purchase Contract Agent nor such Holders will sell
or otherwise dispose (or attempt to dispose) of the Collateral or any part
of it except for the beneficial interest therein, subject to the Pledge
hereunder, transferred in connection with the Transfer of the PIES.
24
Section 9. The Collateral Agent and the Securities Intermediary.
It is hereby agreed as follows:
Section 9.1 Appointment, Powers and Immunities.
The Collateral Agent and the Securities Intermediary shall each act
solely as agent for the Company hereunder and not in its individual capacity
with such powers as are specifically vested in the Collateral Agent or the
Securities Intermediary, as the case may be, by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent and the Securities Intermediary shall:
(1) have no duties or responsibilities except those expressly set
forth in this Agreement and no implied covenants or obligations shall be
inferred from this Agreement against the Collateral Agent or the
Securities Intermediary, nor shall the Collateral Agent or the Securities
Intermediary be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof;
(2) not be responsible for, and neither the Collateral Agent nor the
Securities Intermediary makes any representation or warranty with respect
to, any recitals contained in this Agreement, or in any certificate or
other document referred to or provided for in, or received by it under,
this Agreement, the PIES or the Purchase Contract Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement (other than as against the Collateral Agent or the
Securities Intermediary, as the case may be), the PIES or the Purchase
Contract Agreement or any other document referred to or provided for
herein or therein, for the sufficiency of the Collateral as security or
for any failure by the Company or any other Person (except the Collateral
Agent or the Securities Intermediary, as the case may be) to perform any
of its obligations hereunder or thereunder or for the due creation,
perfection, validity, priority or, except, in the case of the Collateral
Agent, as expressly required hereby, maintenance of any security interest
created hereunder;
(3) not be required to initiate or conduct any litigation or
collection proceedings hereunder or to exercise any other rights or
remedies available to a secured party under the UCC or TRADES regulations
after a default of a debtor (except, in the case of the Collateral Agent,
pursuant to directions furnished under Section 9.2 hereof, subject to
Section 9.6 hereof);
(4) not be responsible for any action taken or omitted to be taken
by it hereunder or under any other document or instrument referred to or
provided for herein or in connection herewith or therewith, except for its
own gross negligence or willful misconduct; and
(5) not be required to advise any party as to selling or retaining,
or taking or refraining from taking any action with respect to, any
securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.
25
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. Notwithstanding the foregoing, each
of the Collateral Agent and the Securities Intermediary in its individual
capacity hereby waives any right of setoff, bankers' lien, liens or perfection
rights as Securities Intermediary or any counterclaim with respect to any of the
Collateral.
Section 9.2 Instructions of the Company.
The Company shall have the right, by one or more instruments in
writing executed and delivered to the Collateral Agent, to direct the time,
method and place of conducting any proceeding for the realization of any right
or remedy available to the Collateral Agent, or of exercising any power
conferred on the Collateral Agent, or to direct the taking or refraining from
taking of any action authorized by this Agreement; provided, however, that (i)
such direction shall not conflict with the provisions of any law or of this
Agreement and (ii) the Collateral Agent shall be adequately indemnified as
provided herein. Nothing contained in this Section 9.2 shall impair the right of
the Collateral Agent in its discretion to take any action or omit to take any
action which it deems proper and which is not inconsistent with such direction.
In the event the Collateral Agent or the Securities Intermediary is
uncertain as to the application of any provision in this Agreement or any other
agreement relating to the transactions contemplated hereby, or such provision is
ambiguous as to its application or is, or appears to be, in conflict with any
other applicable provision hereof, or in the event this Agreement permits any
determination by the Collateral Agent or the Securities Intermediary or is
silent or incomplete as to the course of action the Collateral Agent or the
Securities Intermediary is required to take with respect to a particular set of
facts, the Collateral Agent or the Securities Intermediary may seek instructions
from the Company and shall not be liable to any Person to the extent that it
acts in good faith in accordance with the instructions of the Company; provided,
that, if the Collateral Agent or the Securities Intermediary shall not have
received instructions from the Company pursuant to its request within twenty
(20) days after the date of such request, until instructed otherwise by the
Company, the Collateral Agent or the Securities Intermediary may, but shall be
under no duty to, take or refrain from taking such action as it shall deem
advisable in the best interests of the Company.
Section 9.3 Reliance by Collateral Agent and Securities Intermediary.
Each of the Securities Intermediary and the Collateral Agent shall
be entitled to rely upon, and shall not incur any liability to anyone in acting
upon, any certification, order, judgment, opinion, notice, instructions or other
communication (including, without limitation, any thereof by telephone,
telecopy, telex or facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact or matter
stated therein) and upon advice and statements of legal counsel and other
experts selected by the Collateral Agent or the Securities Intermediary, as the
case may be. As to any matters not expressly provided for by this Agreement, the
Collateral Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with Section 9.2 of this
Agreement.
Section 9.4 Rights in Other Capacities.
The Collateral Agent and the Securities Intermediary and their
affiliates may (without having to account therefor to the Company) accept
26
deposits from, lend money to, make their investments in and generally engage in
any kind of banking, trust or other business with the Purchase Contract Agent or
the Securities Intermediary, as the case may be, any other Person interested
herein and any Holder of PIES (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of PIES without having to account for
the same to the Company; provided that each of the Securities Intermediary and
the Collateral Agent covenants and agrees with the Company that it shall not
accept, receive or permit there to be created in favor of itself and shall take
no affirmative action to permit there to be created in favor of any other
Person, any security interest, lien or other encumbrance of any kind in or upon
the Collateral other than the lien created by the Pledge.
Section 9.5 Non-Reliance on Collateral Agent and Securities Intermediary.
Neither the Securities Intermediary nor the Collateral Agent shall
be required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of PIES of this Agreement, the Purchase
Contract Agreement, the PIES or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Purchase Contract
Agent or any Holder of PIES. Neither the Collateral Agent nor the Securities
Intermediary shall have any duty or responsibility to provide the Company with
any credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent or any Holder of PIES (or any of their
respective affiliates) that may come into the possession of the Collateral Agent
or the Securities Intermediary or any of their respective affiliates.
Section 9.6 Compensation and Indemnity.
The Company agrees to:
(1) pay the Collateral Agent and the Securities Intermediary from
time to time such compensation as shall be agreed in writing between the
Company and the Collateral Agent or the Securities Intermediary, as the
case may be, for all services rendered by them hereunder including the
reasonable costs and fees of agents and advisors appointed pursuant to and
in accordance with Section 9.9, which such fees and costs shall be subject
to the prior consent of the Company; and
(2) indemnify the Collateral Agent and the Securities Intermediary
for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without gross
negligence, willful misconduct or bad faith on its part, arising out of or
in connection with the acceptance or administration of its powers and
duties under this Agreement, including the reasonable costs and expenses
(including reasonable fees and expenses of counsel) of defending itself
against any claim or liability in connection with the exercise or
performance of such powers and duties.
Section 9.7 Failure to Act.
Subject to Section 9.2 of this Agreement, in the event of any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Securities Intermediary shall be entitled, after prompt
notice to the Company and the Purchase Contract Agent, at its sole option, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and the Collateral Agent and the Securities Intermediary shall not be or become
liable in any way to any
27
of the parties hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent and the Securities
Intermediary shall be entitled to refuse to act until either:
(1) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by
agreement between the conflicting parties as evidenced in a writing
satisfactory to the Collateral Agent or the Securities Intermediary; or
(2) the Collateral Agent or the Securities Intermediary shall have
received security or an indemnity satisfactory to it sufficient to save it
harmless from and against any and all loss, liability or reasonable
out-of-pocket expense which it may incur by reason of its acting.
The Collateral Agent and the Securities Intermediary may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Securities Intermediary shall be required to take any
action that is in its opinion contrary to law or to the terms of this Agreement,
or which would in its opinion subject it or any of its officers, employees or
directors to liability.
Section 9.8 Resignation of Collateral Agent and Securities Intermediary.
Subject to the appointment and acceptance of a successor Collateral
Agent as provided below:
(1) the Collateral Agent may resign at any time by giving notice
thereof to the Company, the Purchase Contract Agent as attorney-in-fact
for the Holders of PIES and the Trustee;
(2) the Collateral Agent may be removed at any time by the Company;
and
(3) if the Collateral Agent fails to perform any of its material
obligations hereunder in any material respect for a period of not less
than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent may be removed by the Purchase Contract Agent; provided,
however, that neither this provision nor any other provision of this
Agreement or the Purchase Contract Agreement shall require the Purchase
Contract Agent to keep itself informed as to or to monitor the performance
or observance by the Collateral Agent or the Securities Intermediary of
their obligations hereunder.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Collateral Agent. If no successor Collateral Agent shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's giving of notice of resignation or such
removal, then the retiring Collateral Agent may petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent. The Collateral
Agent shall be a bank which has an office in New York, New York or Minneapolis,
Minnesota with a combined capital and surplus of at least $50,000,000 and shall
not be the Purchase Contract Agent or any of its
28
affiliates. Upon the acceptance of any appointment as Collateral Agent hereunder
by a successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall take
all appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor Collateral Agent. The retiring
Collateral Agent shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent hereunder. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this Section 9
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Collateral Agent. Any
resignation or removal of the Collateral Agent hereunder shall be deemed for all
purposes of this Agreement as the simultaneous resignation or removal, as the
case may be, of the Securities Intermediary.
(b) Subject to the appointment and acceptance of a successor
Securities Intermediary as provided below:
(1) the Securities Intermediary may resign at any time by giving
notice thereof to the Company, the Purchase Contract Agent as
attorney-in-fact for the Holders of PIES and the Trustee;
(2) the Securities Intermediary may be removed at any time by the
Company; and
(3) if the Securities Intermediary fails to perform any of its
material obligations hereunder in any material respect for a period of not
less than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Securities Intermediary may be removed by the Purchase Contract Agent.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Securities Intermediary pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Securities Intermediary. If no successor Securities
Intermediary shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Securities Intermediary's giving
of notice of resignation or such removal, then the retiring Securities
Intermediary may petition any court of competent jurisdiction for the
appointment of a successor Securities Intermediary. The Securities Intermediary
shall be a bank which has an office in New York, New York with a combined
capital and surplus of at least $50,000,000 and shall not be the Purchase
Contract Agent or any of its affiliates. Upon the acceptance of any appointment
as Securities Intermediary hereunder by a successor Securities Intermediary,
such successor Securities Intermediary shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Securities Intermediary, and the retiring Securities Intermediary shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor Securities Intermediary. The
retiring Securities Intermediary shall, upon such succession, be discharged from
its duties and obligations as Securities Intermediary hereunder. After any
retiring Securities Intermediary's resignation hereunder as Securities
Intermediary, the provisions of this Section 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Securities Intermediary.
29
Section 9.9 Right to Appoint Agent or Advisor.
The Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith. The
appointment of agents pursuant to this Section 9.9 shall be subject to prior
consent of the Company, which consent shall not be unreasonably withheld.
Section 9.10 Survival.
The provisions of this Section 9 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Securities Intermediary.
Section 9.11 Exculpation.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, directors, employees or agents be liable under
this Agreement to the Company, the Purchase Contract Agent or any third party
for indirect, special, punitive or consequential loss or damage of any kind
whatsoever, including lost profits, whether or not the likelihood of such loss
or damage was known to the Collateral Agent or the Securities Intermediary, or
any of them, incurred without any act or deed that is found to be attributable
to gross negligence or willful misconduct on the part of the Collateral Agent or
the Securities Intermediary. Any and all exculpatory provisions, immunities and
indemnities in favor of the Collateral Agent or the Securities Intermediary
under this Agreement shall inure to the benefit of the Collateral Agent or the
Securities Intermediary, as applicable, in its individual capacity or as a party
to any agreement referred to herein or therein, whether or not expressly so
provided.
Section 10. Amendment.
Section 10.1 Amendment Without Consent of Holders.
Without the consent of any Holders, the Company (when authorized by
a Board Resolution), the Collateral Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption to by any such successor of the covenants of the Company;
(2) evidence and provide for the acceptance of appointment hereunder
by a successor Collateral Agent, Securities Intermediary or Purchase
Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company, provided such covenants or such surrender do not adversely affect
the validity, perfection or priority of the Pledge created hereunder; or
(4) cure any ambiguity (or formal defect), to correct or supplement
any provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided such action
shall not adversely affect the interests of the Holders.
Section 10.2 Amendment with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent, the Securities Intermediary and the
30
Collateral Agent, the Company, when duly authorized by a Board Resolution, the
Purchase Contract Agent, the Securities Intermediary and the Collateral Agent
may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
PIES; provided, however, that no such supplemental agreement shall, without the
unanimous consent of the Holders of each Outstanding PIES adversely affected
thereby, other than as expressly contemplated by the Agreement,
(1) change the amount or type of Collateral underlying a PIES,
impair the right of the Holder of any PIES to receive distributions on the
underlying Collateral or otherwise adversely affect the Holder's rights in
or to such Collateral;
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding PIES affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment;
provided that if any amendment or proposal referred to above would adversely
affect only the Corporate PIES or only the Treasury PIES after PIES of such
class are created and remain Outstanding, then only the affected class of Holder
as of the record date for the Holders entitled to vote thereon will be entitled
to vote on such amendment or proposal, and such amendment or proposal shall not
be effective except with the consent of Holders of not less than a majority of
such class; provided, further, that the unanimous consent of the Holders of each
outstanding Purchase Contract of such class affected thereby shall be required
to approve any amendment or proposal specified in clauses (1) through (3) above.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 10.3 Execution of Amendments.
In executing any amendment permitted by this Section, the Collateral
Agent, the Securities Intermediary and the Purchase Contract Agent shall be
entitled to receive and (subject to Section 7.1 of the Purchase Contract
Agreement with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel (as defined in the Purchase Contract
Agreement) stating that the execution of such amendment is authorized or
permitted by this Agreement and that all conditions precedent, if any, to the
execution and delivery of such amendment have been satisfied.
31
Section 10.4 Effect of Amendments.
Upon the execution of any amendment under this Section, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered under the Purchase Contract Agreement shall be bound thereby.
Section 10.5 Reference to Amendments.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Section may, and
shall if required by the Collateral Agent or the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the Company shall so
determine, new Security Certificates so modified as to conform, in the opinion
of the Collateral Agent, the Purchase Contract Agent and the Company, to any
such amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
PIES Certificates.
Section 11. Merger, Consolidation, Sale or Conveyance.
Section 11.1 When Company May Merge, Etc.
The Company shall not consolidate with or merge into, or sell, lease
(for a term extending beyond the last stated maturity of the PIES and the Senior
Notes then Outstanding) or convey all or substantially all of its assets to, any
Person or group of Affiliated Persons in one transaction or a series of related
transactions, unless the Company shall be the continuing corporation, or the
successor or transferee Person expressly assumes by one or more supplemental
agreements, in form satisfactory to the Collateral Agent, all the obligations of
the Company with respect to this Agreement, and the Company or the successor or
transferee Person, as the case may be, (i) shall be a Corporation organized and
existing under the laws of one of the states in the United States and (ii) shall
not, immediately after such consolidation or merger or sale, lease or
conveyance, be in default in the performance or any covenant or condition
hereunder. The Company shall deliver to the Collateral Agent an Officers'
Certificate (as defined in the Original Indenture) and an Opinion of Counsel (as
defined in the Original Indenture), each stating that such consolidation, merger
sale, lease or conveyance and such supplemental agreement comply with this
Agreement and that all conditions precedent to the consummation of any such
consolidation, or merger, or any sale, lease or conveyance have been met.
Section 11.2 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease or conveyance
of all or substantially all of the assets of the Company in accordance with
Section 11.1, the successor corporation or the transferee corporation formed by
such consolidation or into which the Company is merged or to which such transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Agreement with the same effect as if such
successor corporation had been named as the Company herein.
Such successor or transferee Person thereupon may cause to be
signed, and may issue either in its own name or in the name of Sierra Pacific
Resources, any or all of the Certificates evidencing PIES issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Purchase Contract Agent; and, upon the order of such successor or such
transferee Person, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Purchase Contract
Agent shall
32
authenticate and execute on behalf of the Holders and deliver any Certificates
which previously shall have been signed and delivered by the officers of the
Company to the Purchase Contract Agent for authentication and execution, and any
Certificate evidencing PIES which such successor corporation or transferee
corporation thereafter shall cause to be signed and delivered to the Purchase
Contract Agent for that purpose. All the Certificates issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing PIES
thereafter to be issued as may be appropriate.
Section 11.3 Limitation.
Nothing in this Agreement shall be deemed to prevent or restrict;
(a) any consolidation or merger after the consummation of which the Company
would be the surviving or resulting entity or any conveyance or other transfer
or lease of any part of the properties of the Company which does not constitute
the entirety, or substantially the entirety, thereof; or (b) the approval by the
Company of, or the consent by the Company to, any consolidation or merger to
which any Restricted Subsidiary (as defined in the Original Indenture) or any
other subsidiary or affiliate of the Company may be a party or any conveyance,
transfer or lease by any Subsidiary (as defined in the Original Indenture) or
any such other subsidiary or affiliate of any of its assets.
Section 12. Miscellaneous.
Section 12.1 No Waiver.
No failure on the part of the Collateral Agent or any of its agents
to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Collateral Agent or any
of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 12.2 Governing Law; Jurisdiction and Venue.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company, the Collateral Agent, the Securities Intermediary, the
Purchase Contract Agent and the Holders from time to time of the PIES, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent, the Securities Intermediary and the Holders from time to time
of the PIES, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
Section 12.3 Notices.
All notices, requests, consents and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by
33
telecopy) delivered to the intended recipient specified below. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telecopier or personally delivered or,
in the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
If to the Company:
Sierra Pacific Resources
0000 Xxxx Xxxx
X.X. Xxx 00000
Xxxx, Xxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Manager of Finance and Treasury
If to the Collateral Agent or the Securities Intermediary:
Xxxxx Fargo Bank, National Association
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxxxxx
If to the Purchase Contract Agent or the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Division -- Corporate Finance Unit
Section 12.4 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, and the Holders from
time to time of the PIES, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.
Section 12.5 Counterparts.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
Section 12.6 Effect of Headings and Table of Contents.
The headings and table of contents contained in this Agreement shall
not constitute a part, or to effect the meaning or interpretation of, this
Agreement.
Section 12.7 Severability.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall
34
remain in full force and effect in such jurisdiction and shall be liberally
construed in order to carry out the intentions of the parties hereto as nearly
as may be possible and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
Section 12.8 Expenses, etc.
The Company agrees to reimburse the Collateral Agent and the
Securities Intermediary for:
(1) all reasonable costs and expenses of the Collateral Agent and
the Securities Intermediary (including, without limitation, the reasonable
fees and expenses of counsel to the Collateral Agent and the Securities
Intermediary or any agent or advisor appointed by the Collateral Agent
pursuant to and in accordance with Section 9.9), in connection with (i)
the negotiation, preparation, execution and delivery or performance of
this Agreement and (ii) any modification, supplement or waiver of any of
the terms of this Agreement;
(2) all reasonable costs and expenses of the Collateral Agent and
the Securities Intermediary (including, without limitation, reasonable
fees and expenses of counsel to the Collateral Agent and the Securities
Intermediary) in connection with (i) any enforcement or proceedings
resulting or incurred in connection with causing any Holder of PIES to
satisfy its obligations under the Purchase Contracts forming a part of the
PIES and (ii) the enforcement of this Section 12.8; and
(3) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
Section 12.9 Security Interest Absolute.
All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(1) any lack of validity or enforceability of any provision of the
Purchase Contracts or the PIES or any other agreement or instrument
relating thereto;
(2) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of the PIES under the related Purchase Contracts,
or any other amendment or waiver of any term of, or any consent to any
departure from any requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument relating thereto;
or
(3) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
SIERRA PACIFIC RESOURCES
By:_____________________________________
Name:
Title:
THE BANK OF NEW YORK, not individually
but solely as Purchase Contract Agent
and as attorney-in-fact of the Holders
from time to time of the PIES
By:_____________________________________
Name:
Title:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Collateral Agent
By:_____________________________________
Name:
Title:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Securities Intermediary
By:_____________________________________
Name:
Title:
EXHIBIT A
NOTICE
FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
(Creation of Treasury PIES)
Xxxxx Fargo Bank, National Association, as Collateral Agent
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax (000) 000-0000
Re: PIES of Sierra Pacific Resources
Reference is made to the Pledge Agreement dated as of May 24, 2005 (the
"Pledge Agreement"), among Sierra Pacific Resources (the "Company"), you, as
Collateral Agent and as Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.
We hereby notify you that, in accordance with Section 5.2 of the Pledge
Agreement and Section 3.13 of the Purchase Contract Agreement, the holder of
securities named below (the "Holder") has elected to substitute $__________
Value of Treasury Securities (CUSIP No. ) in exchange for an equal Value of
Pledged Senior Notes and has delivered to the undersigned Purchase Contract
Agent a notice stating that the Holder has Transferred such Treasury Securities
to the Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities have been credited to the Collateral
Account, to release by Transfer to the undersigned Purchase Contract Agent, on
behalf of the undersigned Holder an equal Value of Pledged Senior Notes in
accordance with Section 5.2 of the Pledge Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent
By:__________________________________
Name:
Title:
Date:
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the Pledged Senior Notes:
_____________________________________________________
Name of Holder
_____________________________________________________
TRADES Account No.
_____________________________________________________
Social Security or Taxpayer Identification Number
_____________________________________________________
Address
EXHIBIT B
NOTICE
FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY
(Creation of Treasury PIES)
Xxxxx Fargo Bank, National Association, as Securities Intermediary
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax (000) 000-0000
Re: PIES of Sierra Pacific Resources
Securities Account No. 00000000 entitled "Xxxxx Fargo Bank,
National Association, as Collateral Agent, Securities Account
(Sierra Pacific Resources)" (the "Collateral Account")
Reference is made to the Pledge Agreement, dated as of May 24, 2005 (the
"Pledge Agreement"), among Sierra Pacific Resources (the "Company"), you, as
Securities Intermediary, The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the holders of PIES from time to time, and the undersigned,
as Collateral Agent. Capitalized terms used herein but not defined shall have
the meanings attributable to them in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities
(CUSIP No. ) has been credited to the Collateral Account by or for the
benefit of _________, as Holder of PIES (the "Holder"), you are hereby
instructed to release from the Collateral Account an equal Value of Senior Notes
by Transfer to the Purchase Contract Agent in accordance with Section 5.2 of the
Pledge Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Collateral Agent
By:______________________________
Name:
Title:
Date:
Please print name and address of Holder:
_____________________________________________________
Name
_____________________________________________________
TRADES Account No.
_____________________________________________________
Social Security or Taxpayer Identification Number
_____________________________________________________
Address
EXHIBIT C
NOTICE
FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
(Recreation of Corporate PIES)
Xxxxx Fargo Bank, National Association, as Collateral Agent
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax (000) 000-0000
Re: PIES of Sierra Pacific Resources
Reference is made to the Pledge Agreement, dated as of May 24, 2005 (the
"Pledge Agreement"), among Sierra Pacific Company (the "Company"), you, as
Collateral Agent and as Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.
We hereby notify you that, in accordance with Section 5.3 of the Pledge
Agreement and Section 3.14 of the Purchase Contract Agreement, the holder of
securities listed below (the "Holder") has elected to substitute $__________
Value of Senior Notes in exchange for $__________ Value of Pledged Treasury
Securities and has delivered to the undersigned a notice stating that the Holder
has Transferred such Senior Notes or security entitlements thereto to the
Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Senior Notes have been credited to the Collateral
Account, to release to the undersigned Holder an equal Value of Treasury
Securities or security entitlements thereto related to _____ Treasury PIES of
such Holder in accordance with Section 5.3 of the Pledge Agreement and Section
3.14 of the Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent
By:________________________________
Name:
Title:
Date:
Please print name and address of Holder electing to substitute Pledged Senior
Notes or security entitlements thereto for Pledged Treasury Securities:
_____________________________________________________
Name
_____________________________________________________
DTC Participant No.
_____________________________________________________
Social Security or Taxpayer Identification Number
_____________________________________________________
Address
EXHIBIT D
NOTICE
FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY
(Recreation of Corporate PIES)
Xxxxx Fargo Bank, National Association, as Securities Intermediary
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax (000) 000-0000
Re: PIES of Sierra Pacific Resources
Securities Account No. ________ entitled "Xxxxx Fargo Bank,
National Association, as Collateral Agent, Securities Account
(Sierra Pacific Resources)"
Reference is made to the Pledge Agreement, dated as of May 24, 2005 (the
"Pledge Agreement"), among Sierra Pacific Resources (the "Company"), you, as
Securities Intermediary, The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the holders of PIES from time to time, and the undersigned,
as Collateral Agent. Capitalized terms used herein but not defined shall have
the meanings attributable to them in the Pledge Agreement.
When you have confirmed that $_________ Value of Senior Notes has been
credited to the Collateral Account by or for the benefit of _________, as Holder
of PIES (the "Holder"), you are hereby instructed to release from the Collateral
Account $__________ Value of Treasury Securities (CUSIP No. ) or security
entitlements thereto by Transfer to the undersigned Holder in accordance with
Section 5.3 of the Pledge Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Collateral Agent
By:______________________________
Name:
Title:
Date:
Please print name and address of Holder:
_____________________________________________________
Name
_____________________________________________________
DTC Participant No.
_____________________________________________________
Social Security or Taxpayer Identification Number
_____________________________________________________
Address
EXHIBIT E
NOTICE OF CASH SETTLEMENT
FROM SECURITIES INTERMEDIARY TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Division -- Corporate Finance Unit
Re: PIES of Sierra Pacific Resources
Reference is made to the Pledge Agreement, dated as of May 24, 2005 (the
"Pledge Agreement"), among Sierra Pacific Resources (the "Company"), you, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time, as Collateral Agent and the undersigned, as Securities
Intermediary. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.
In accordance with Section [5.5(d)] [5.5(e)] of the Pledge Agreement, we
hereby notify you that as of 11:00 a.m. (New York City time), [on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date] [on
the Business Day immediately preceding the Purchase Contract Settlement Date],
we have received [$_____ in immediately available funds paid in an aggregate
amount equal to the Purchase Price to the Company on the Purchase Contract
Settlement Date with respect to __________ Corporate PIES] [$_________ in
immediately available funds paid in an aggregate amount equal to the Purchase
Price to the Company on the Purchase Contract Settlement Date with respect to
______ Treasury PIES.]
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Intermediary
By:________________________________
Name:
Title:
Date:
EXHIBIT F
NOTICE FROM HOLDER OF SEPARATED SENIOR NOTES TO
COLLATERAL AGENT REGARDING REMARKETING
Xxxxx Fargo Bank, National Association, as Collateral Agent
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax (000) 000-0000
Re: Senior Notes of Sierra Pacific Resources
Reference is made to the Pledge Agreement, dated as of May 24, 2005 (the
"Pledge Agreement"), among Sierra Pacific Resources (the "Company"), you, as
Collateral Agent, and as Securities Intermediary, and The Bank of New York, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.
The undersigned hereby notifies you in accordance with Section 5.7 of the
Pledge Agreement, that the undersigned elects to have $_________ principal
amount of Senior Notes for delivery to the Remarketing Agents on the Business
Day immediately preceding the first of the three sequential remarketing dates of
any Three-Day Remarketing Period for such Senior Notes to be included in any
Remarketing. The undersigned will, upon request of the Remarketing Agents,
promptly execute and deliver any additional documents deemed by the Remarketing
Agents or by the Company to be necessary or desirable to complete the sale,
assignment and transfer of the Senior Notes which are the subject of this
notice.
The undersigned hereby instructs the you, upon receipt of the Proceeds of
such Remarketing from the Remarketing Agents to deliver such Proceeds to the
undersigned in accordance with the instructions indicated below under "Payment
Instructions." The undersigned hereby instructs you, in the event of a
unsuccessful Remarketing, upon receipt of the Senior Notes tendered herewith
from the Remarketing Agents, to deliver the Senior Notes to the person(s) and at
the address(es) indicated below under "Delivery Instructions." The undersigned
acknowledges and agrees that the Collateral Agent and the Remarketing Agents may
withhold from the Proceeds such amounts as they may determine to be appropriate
in respect of taxes which may be applicable.
With this notice, the undersigned hereby (i) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of the Pledge Agreement.
Date:
By: ____________________________________
Name:
Title:
Signature Guarantee:
Please print name and address of Holder:
_____________________________________________________
Name
_____________________________________________________
Social Security or Taxpayer Identification Number
_____________________________________________________
Address
HOLDER'S INSTRUCTIONS
A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing should be In the event of a Failed Remarketing, Senior
paid by check in the name of the Notes which are in physical form should be
person(s) set forth below and mailed to delivered to the person(s) set forth below and
forth below mailed to the address set forth below.
Name(s) Name(s)
__________________________________ __________________________________
(Please Print) (Please Print)
Address Address
__________________________________ __________________________________
(Please Print) (Please Print)
__________________________________ __________________________________
__________________________________ __________________________________
(Zip Code) (Zip Code)
__________________________________
(Tax Identification or Social Security Number)
__________________________________
(Tax Identification or Social Security Number) In the event of a Failed Remarketing, Senior
Notes which are in book-entry form should be
If a DTC Participant, add wire transfer credited to the account at The Depositary Trust
instructions and DTC Account No. Company set forth below.
__________________________________
Wire transfer instructions __________________________________
DTC Account Number
__________________________________
DTC Account Number
Name of Account Party:___________
EXHIBIT G
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
Xxxxx Fargo Bank, National Association, as Collateral Agent
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax (000) 000-0000
Re: Senior Notes of Sierra Pacific Resources
Reference is made to the Pledge Agreement, dated as of May 24, 2005
(the "Pledge Agreement"), among Sierra Pacific Resources (the "Company"), you,
as Collateral Agent and Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.
The undersigned hereby notifies you, in accordance with paragraph
19(i)(B) of the Indenture Officers' Certificate and Section 5.8 of the Pledge
Agreement, that the undersigned has received notice from the Holder named below
(the "Holder") that the Holder has elected not to participate in the Remarketing
through compliance with the procedures for creating Treasury PIES set forth in
Section 3.13 of the Purchase Contract Agreement and Section 5.2 of the Pledge
Agreement.
Accordingly, the undersigned hereby notifies you in accordance with
Section 3.13 of the Purchase Contract Agreement and Section 5.2 of the Pledge
Agreement that the Holder has elected to substitute $______________ Value of
Treasury Securities in exchange for an equal Value of Pledged Senior Notes and
has delivered to the undersigned a notice stating that the Holder has
Transferred such Treasury Securities to the Securities Intermediary, for credit
to the Collateral Account.
The undersigned hereby requests that you as the Collateral Agent,
upon confirmation from the Securities Intermediary that such Treasury Securities
have been credited to the Collateral Account, release to us for delivery to such
Holder _________ principal amount of the Pledged Senior Note in accordance with
Section 5.2 of the Pledge Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent
By:_______________________________
Name:
Title:
Date:
EXHIBIT H
AGENCY AND CUSTODY ACCOUNT DIRECTION
FOR CASH BALANCES
Direction to use Xxxxx Fargo Funds for Cash Balances for the following
account(s):
Account Names: Xxxxx Fargo Bank, National Association, as Collateral
Agent, Securities Account (Sierra Pacific Resources)
Account Number(s): 00000000
You are hereby directed to invest, as indicated below or as I shall direct
further from time to time, all cash in the Account in the following money market
portfolio of Xxxxx Fargo Advantage Money Xxxxxx Funds -- Service Class (the
"Fund") (Check One):
[ ] Xxxxx Fargo Advantage Government Money Market Fund
[ ] Xxxxx Fargo Advantage 100% Treasury Money Market Fund
[ ] Xxxxx Fargo Advantage Treasury Plus Money Market Fund
[ ] Xxxxx Fargo Advantage National Tax-Free Money Market Fund
I acknowledge that I have received, at my request, and reviewed the Fund's
prospectus and have determined that the Fund is an appropriate investment for
the Account.
I understand from reading the Fund's prospectus that Xxxxx Fargo Bank, National
Association, ("Xxxxx Fargo Bank") serves as investment advisor, custodian and
transfer agent for the Fund; I also understand that Xxxxx Fargo Bank will be
paid, and its bank affiliates may be paid, fees for services to the Fund and
that those fees may include Processing Organization fees as described in the
Fund's prospectus.
I understand that you will not exclude amounts invested in the Fund from Account
assets subject to fees under the Account agreement between us.
I understand that investments in the Fund are not obligations of, or endorsed or
guaranteed by, Xxxxx Fargo Bank or its affiliates and are not insured by the
Federal Deposit Insurance Corporation.
I acknowledge that I have full power to direct investments of the Account.
I understand that I may change this direction at any time and that it shall
continue in effect until revoked or modified by me by written notice to you.
__________________________________
Signature
__________________________________
Date
