Document:

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                            SIERRA PACIFIC RESOURCES

                              OFFICERS' CERTIFICATE

                              ___________ __, 2005

     Pursuant to Sections 2.01, 13.04 and 13.05 of the Indenture dated as of May
1, 2000 (as supplemented and amended from time to time, the "Indenture"),
between Sierra Pacific Resources (the "Company") and The Bank of New York, as
trustee (the "Trustee") and the authority granted in the Resolutions of the
Board of Directors of the Company dated February 8, 2005, the undersigned
officers of the Company, Michael W. Yackira, Corporate Executive Vice President
and Chief Financial Officer, and [__________________], hereby certify as
follows:

     The terms and conditions of the securities described in this Officers'
Certificate (as amended, modified and supplemented from time to time, the
"Officers' Certificate") are as follows (the numbered paragraphs set forth below
corresponding to the numbered paragraphs of Section 2.01 of the Indenture,
except paragraph 20 below). Certain terms used herein are defined in paragraph
20 of this certificate. Capitalized terms used herein but not defined in said
paragraph 20 or elsewhere in this certificate shall have the meanings assigned
to them in the Indenture unless the context clearly requires otherwise

1.   Title; Ranking. The Securities issued under the Indenture shall constitute
     a new series of Securities and shall be designated "7.93% Senior Notes due
     2007" (the "Senior Notes"). The Senior Notes shall constitute the senior,
     unsecured and unsubordinated debt obligations of the Company and shall rank
     equally in right of payment with all other existing and future senior,
     unsecured and unsubordinated debt obligations of the Company. The Senior
     Notes, including the related form of Trustee's certificate of
     authentication and any applicable legends, shall be issued in substantially
     the form annexed hereto as Exhibit A.

2.   Maximum Aggregate Principal Amount. The maximum aggregate principal amount
     of the Senior Notes that may be authenticated and delivered under the
     Indenture (except for the Senior Notes authenticated and delivered upon
     registration or transfer of or in exchange for, or in lieu of other Senior
     Notes pursuant to Section 2.06, 2.07, 2.09 or 3.07 of the Indenture) shall
     be $235,218,000.

3.   Registered Securities in Global Form, Etc. Initially, the Senior Notes that
     are components of certain securities of the Company referred to as
     Corporate PIES (the "Corporate PIES") will be issued in definitive form
     (the "Certificated Notes") registered in the name of The Bank of New York,
     as Purchase Contract Agent (the "Purchase Contract Agent"), under the
     Purchase Contract Agreement dated as of _______ __, 2005 between the
     Company and the Purchase Contract Agent (the "Purchase Contract
     Agreement"). Senior Notes that are not components of Corporate PIES shall
     initially be issued in the form of one or more global Senior Notes (each a
     "Global Senior Note") in the name of Cede & Co., as nominee for The
     Depository Trust Company (the "Depositary"), the initial securities
     depositary for the Global Senior Notes. The
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     Certificated Notes and the Global Senior Notes may bear such legends as set
     forth on Exhibit A hereto.

     So long as any Senior Notes constitute components of Corporate PIES, they
     shall be issued in the form of Certificated Notes. Senior Notes that no
     longer constitute components of Corporate PIES shall be issued in the form
     of Global Senior Notes. Each Global Senior Note or Certificated Note, as
     applicable, shall represent such of the outstanding Senior Notes as shall
     be specified therein and each shall provide that it shall represent the
     aggregate principal amount of outstanding Senior Notes from time to time
     endorsed thereon and that the aggregate principal amount of outstanding
     Senior Notes represented thereby may from time to time be reduced or
     increased, as appropriate, to reflect exchanges and redemptions. Any
     endorsement of a Global Senior Note to reflect the amount of any increase
     or decrease in the aggregate principal amount of outstanding Senior Notes
     represented thereby shall be made by the Trustee, as custodian of the
     Global Senior Notes (the "Custodian"), in accordance with instructions as
     further set forth below. Any endorsement of a Certificated Note to reflect
     the amount of any decrease in the aggregate principal amount of outstanding
     Certificated Notes represented thereby shall be made by the Collateral
     Agent pursuant to and in accordance with instructions as further set forth
     below.

     No beneficial owner of the Senior Notes shall receive a Certificated Note
     representing such beneficial owner's interest in such Global Senior Notes,
     except as provided in Section 2.06 of the Indenture. Unless and until
     Certificated Notes have been issued to the beneficial owners of the Senior
     Notes pursuant to Section 2.06 of the Indenture, the rights of the
     beneficial owners of the Senior Notes shall be exercised only through the
     Depositary and shall be limited to those established by law and agreements
     between such beneficial owners and the Depositary and/or the Depositary
     Participants. The Depositary shall make book-entry transfers among its
     participants and receive and transmit any payments on the Global Senior
     Notes to such participants; provided that, solely for the purposes of
     determining whether the Holders of the requisite amount of the Senior Notes
     have voted on any matter provided for in the Indenture, the Company may
     rely conclusively on, and shall be protected in relying on, any written
     instrument (including a proxy) delivered to the Company by the Depositary
     setting forth the votes of the beneficial owners of the Senior Notes or
     assigning the right to vote on any matter to any other Persons either in
     whole or in part.

     The Company shall execute, and the Trustee shall authenticate and deliver,
     in each case, pursuant to Section 2.02 of the Indenture, one or more Global
     Senior Notes that (i) shall represent and be denominated in an amount equal
     to the aggregate principal amount of all of the Senior Notes to be issued
     in the form of Global Senior Notes and not yet canceled, (ii) shall be
     registered in the name of the Depositary for the Senior Notes or the
     nominee of such Depositary and (iii) shall be delivered by the Trustee to
     such Depositary or pursuant to such Depositary's instructions.

     Notwithstanding any other provisions of the Indenture (other than the
     provisions set forth in Section 2.06 of the Indenture), Global Senior Notes
     may not be transferred as a whole except by the Depositary to a nominee of
     the Depositary or by a nominee of the

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     Depositary to the Depositary or another nominee of the Depositary or by the
     Depositary or any such nominee to a successor Depositary or a nominee of
     such successor Depositary. Interests of beneficial owners may be
     transferred or exchanged for Senior Notes not represented by a Global
     Senior Note, and Senior Notes not represented by a Global Senior Note may
     be transferred or exchanged for a Global Senior Notes or Senior Notes, in
     accordance with rules of the Depositary and the provisions of Section 2.06
     of the Indenture.

     Upon initial issuance, the Senior Notes shall be pledged to the Collateral
     Agent for the benefit of the Company, pursuant to the terms of the Pledge
     Agreement, as collateral to secure the obligations of the Holders of
     Corporate PIES to purchase the Common Stock in accordance with the terms of
     the Purchase Contract Agreement. The Senior Notes may be transferred, in
     whole or in part, only in accordance with the terms and conditions set
     forth in the Indenture, the Pledge Agreement and the Purchase Contract
     Agreement. To the extent permitted by law, any transfer or purported
     transfer of any Senior Note not made in accordance with the Indenture shall
     be null and void. Subject to this Section, the Senior Notes shall be freely
     transferable.

     If any beneficial interest in a Global Senior Note is exchanged for or
     transferred to a person who will take delivery thereof in the form of a
     beneficial interest in another Global Senior Note or for Certificated
     Notes, the principal amount of Senior Notes represented by such Global
     Senior Note shall be reduced accordingly and an endorsement shall be made
     on such Global Senior Note by the Collateral Agent or by the Depositary at
     the direction of the Trustee to reflect such reduction; and if the
     beneficial interest is being exchanged for or transferred to a person who
     will take delivery thereof in the form of a beneficial interest in another
     Global Senior Note, such other Global Senior Note shall be increased
     accordingly and an endorsement shall be made on such Global Senior Note by
     the Trustee or by the Depositary at the direction of the Trustee to reflect
     such increase.

     In the event that any Pledged Senior Notes are to be released from the
     Pledge of the Pledge Agreement and delivered to the Purchase Contract Agent
     pursuant to Section 5.2(b) of the Pledge Agreement (a "Released Note"), as
     a result of the creation of one or more Treasury PIES as provided in
     Section 5.2 of the Pledge Agreement, such release and delivery shall be
     evidenced by an endorsement by the Collateral Agent on the Certificated
     Note held by the Collateral Agent reflecting a reduction in the principal
     amount of such Certificated Note equal in amount (the "Reduced Principal
     Amount") to the principal amount of the Released Note. The Collateral Agent
     shall confirm any such Reduced Principal Amount by telecopying or otherwise
     delivering a photocopy of such endorsement made on the Certificated Note
     evidencing such Reduced Principal Amount to the Trustee at the telecopier
     number or address of the Purchase Contract Agent provided for notices to
     the Purchase Contract Agent in the Pledge Agreement (or at such other
     telecopier or address as the Trustee shall provide to the Collateral
     Agent). Upon receipt of such confirmation, the Trustee shall instruct the
     Custodian to increase the principal amount of a Global Note held by the
     Custodian in an amount equal to the Reduced Principal Amount by an
     endorsement made by the Custodian on such Global Note to reflect such
     increase.

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         In the event that a Senior Note is transferred to the Collateral Agent
         pursuant to Section 5.3(a) of the Pledge Agreement (a "Subjected Note")
         in connection with the recreation of Corporate PIES as provided in
         Section 5.3 of the Pledge Agreement, such transfer shall be evidenced
         by an endorsement by the Collateral Agent on the Certificated Note held
         by the Collateral Agent reflecting an increase in the principal amount
         of such Certificated Note equal in amount (the "Increased Principal
         Amount") to the principal amount of such Subjected Note. The Collateral
         Agent shall confirm any such Increased Principal Amount by telecopying
         or otherwise delivering a photocopy of such endorsement made on the
         Certificated Note evidencing such Increased Principal Amount to the
         Trustee at the telecopier number or address of the Purchase Contract
         Agent provided for notices to the Purchase Contract Agent in the Pledge
         Agreement (or at such other telecopier or address as the Trustee shall
         provide to the Collateral Agent). Upon receipt of such confirmation,
         the Trustee shall instruct the Custodian to decrease the principal
         amount of the Senior Global Note held by the Custodian in an amount
         equal to the Increased Principal Amount by an endorsement made by the
         Custodian on such Senior Global Note to reflect such decrease.

4.   Not applicable.

5.   Not applicable.

6.   Maturity. The principal amount of all Outstanding Senior Notes shall be
     payable at their Stated Maturity on November 15, 2007 or such later date
     falling on or prior to the eleventh anniversary of the Remarketing
     Settlement Date as shall be set forth in the Second Officers' Certificate
     (as defined in paragraph 19 below), it being understood that if there
     should have been a Failed Remarketing or no Remarketing at all, the Stated
     Maturity shall remain November 15, 2007. Any extension of the Stated
     Maturity in accordance with this paragraph 6 shall be effective on and
     after the Remarketing Settlement Date.

7.   Interest. The interest rate to be borne by the Senior Notes shall be 7.93%
     per annum from May 15, 2005 to, but excluding, either (1) the Remarketing
     Settlement Date, if there is a Successful Remarketing, or (2) the Purchase
     Contract Settlement Date, if there is a Failed Remarketing or if there is
     not a Remarketing at all pursuant to clause (c) of the definition of "Reset
     Rate" herein, and, in each case, at the Reset Rate thereafter to, but
     excluding, the Stated Maturity of the Senior Notes; the Reset rate shall be
     set forth in the Second Officers' Certificate, or, in the event of a Failed
     Remarketing or if no remarketing shall have occurred, in an Officers'
     Certificate supplemental to this Officers' Certificate.

     Interest shall be payable in arrears (i) quarterly on each February 15, May
     15, August 15 and November 15 of each year, commencing August 15, 2005
     (each a "Quarterly Interest Payment Date"), to and including the Quarterly
     Interest Payment Date next preceding the Remarketing Settlement Date, (ii)
     on the Remarketing Settlement Date (whether or not a Quarterly Interest
     Payment Date), and (iii) after the Remarketing Settlement Date, such
     interest payment dates as determined in the Remarketing until the Stated
     Maturity (each an "Interest Payment Date" and collectively, the "Interest
     Payment Dates"). Interest payments will include interest accrued from and
     including the immediately preceding

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     Interest Payment Date, or in the case of the first Interest Payment Date,
     from and including May 15, 2005 to but excluding such Interest Payment
     Date. If the Remarketing Settlement Date is not a Quarterly Interest
     Payment Date, interest paid on the Remarketing Settlement Date to the
     Collateral Agent will be paid by the Collateral Agent to the holders of the
     Senior Notes subject to the provisions of the Pledge Agreement and the
     Remarketing Agreement. Interest payments for the Senior Notes shall be
     computed and paid (1) for any full quarterly period, on the basis of a
     360-day year of twelve 30-day months, (2) for any period shorter than a
     full quarterly period, on the basis of a 30-day month and (3) for any
     period less than a month, on the basis of the actual number of days elapsed
     per 30-day month. In the event that any date on which interest is payable
     on the Senior Notes is not a Business Day, then payment of the interest
     payable on such date will be made on the next succeeding day that is a
     Business Day (and without any interest or payment in respect of any such
     delay), in each case with the same force and effect as if made on the date
     the payment was originally due and payable; provided, however, if such
     Business Day is in the next calendar year, then such payment will be made
     on the preceding Business Day.

     Any principal of or installment of interest on the Senior Notes that is
     overdue shall bear interest at the interest rate then borne by the Senior
     Notes (to the extent that the payment of such interest shall be legally
     enforceable), from the dates such amounts are due until they are paid or
     made available for payment, and such interest shall be payable on demand by
     the Holders.

     Interest shall be paid in arrears on each Interest Payment Date to the
     Person in whose name the Senior Notes are registered on the Regular Record
     Date for such Interest Payment Date; provided that, interest payable at the
     Stated Maturity of principal as provided herein will be paid to the Person
     to whom principal is payable. Any such interest that is not so punctually
     paid or duly provided for will forthwith cease to be payable to the Holders
     on such Regular Record Date and may either be paid to the Person or Persons
     in whose name the Senior Notes are registered at the close of business on a
     special record date (as such term is used in Section 2.12 of the Indenture)
     for the payment of such defaulted interest to be fixed by the Company,
     notice whereof shall be given to Holders of the Senior Notes not less than
     ten days prior to such special record date, or be paid at any time in any
     other lawful manner not inconsistent with the requirements of any
     securities exchange, if any, on which the Senior Notes may be listed, and
     upon such notice as may be required by any such exchange, all as set forth
     in Section 2.12 of the Indenture.

     Notwithstanding anything to the contrary contained herein, the manner of
     computing and paying interest on the Senior Notes may be modified in the
     Remarketing.

8.   Place and Method of Payment. Payments of the principal of and interest on
     the Senior Notes shall be made by the Company at the office of the Paying
     Agent which shall initially be The Bank of New York, with any such payment
     that is due at the Stated Maturity of any Senior Notes being made upon
     surrender of such Senior Notes to the Paying Agent. Payments of interest
     (including interest on any Interest Payment Date) will be made at the
     option of the Company, (i) by check mailed to the address of the

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     Person entitled thereto as such address shall appear in the Security
     Register or (ii) by wire transfer at such place and to such account at a
     banking institution in the United States as may be designated in writing to
     the Trustee at least sixteen days prior to the date for payment by the
     Person entitled thereto.

9.   Redemption. The Senior Notes shall not be redeemable at the option of the
     Company, the Holders or otherwise on or prior to the Remarketing Settlement
     Date, provided, however, that after the Remarketing Settlement Date, the
     Senior Notes may be subject to redemption as determined in the Remarketing
     and set forth in the Second Officers' Certificate.

10.  Sinking Fund. There shall be no sinking fund with respect to the Senior
     Notes.

11.  Denominations. The Senior Notes shall be issued in denominations of $1,000,
     or any integral multiple thereof, whether they are issued in global or
     definitive form.

12.  Premium upon Acceleration of Maturity. The Senior Notes shall not be
     subject to a premium upon a declaration of acceleration of their maturity
     prior to the Remarketing Settlement Date, provided, however, that after the
     Remarketing Settlement Date, the Senior Notes may be subject to a premium
     upon an acceleration of their maturity as determined in the Remarketing and
     set forth in the Second Officers' Certificate.

13.  Not applicable.

14.  Not applicable.

15.  Not applicable.

16.  Not applicable.

17.  Not applicable.

18.  Covenants. After the Remarketing Settlement Date, the Senior Notes may have
     additional covenants as determined in the Remarketing and set forth in the
     Second Officers' Certificate.

19.  (i) Remarketing Rights.

          (A) The Senior Notes (1) comprising part of Corporate PIES, other than
          those Senior Notes of holders that have elected not to participate in
          the Remarketing pursuant to Section 5.3(c) of the Purchase Contract
          Agreement, and (2) that no longer comprise a part of the Corporate
          PIES, if any, that elect to be included in any Remarketing as set
          forth in Section 5.7 of the Pledge Agreement (collectively, the Senior
          Notes described in clauses (1) and (2), the "Remarketing Senior
          Notes"), shall be remarketed in the Remarketing pursuant to the
          Remarketing Procedures. All holders of Senior Notes described in
          clause (1) above, including those who have attempted to effect a Cash
          Settlement pursuant to Section 5.8 of the Purchase Contract Agreement,
          Early Settlement pursuant to Section 5.9 of the

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          Purchase Contract Agreement or Merger Early Settlement pursuant to
          Section 5.10 of the Purchase Contract Agreement but have failed to
          follow the procedures for such settlements shall be deemed to have
          consented to the Remarketing of their Senior Notes pursuant to the
          Remarketing Procedures in any Remarketing, or in the case of an
          unsuccessful Cash Settlement, in the Final Remarketing Period. The
          right of each Holder of Senior Notes to have its Senior Notes
          remarketed will be limited, however, to the extent that (i) the
          Remarketing Agents conduct a Remarketing pursuant to the terms of the
          Remarketing Agreement, (ii) the Remarketing Agents are able to find a
          purchaser or purchasers for the tendered Senior Notes, (iii) such
          purchaser or purchasers deliver the purchase price therefor to the
          Remarketing Agents and (iv) the Remarketing may not commence or be
          consummated pursuant to applicable law. In addition, all holders of
          Senior Notes shall be deemed to have consented to the Remarketing
          Procedures and the terms of the Purchase Contract Agreement, the
          Pledge Agreement and the Remarketing Agreement with respect to the
          pledge and transfer and other provisions of these agreements with
          respect to their Senior Notes, pursuant to the terms of such
          agreements. Notwithstanding anything to the contrary contained herein,
          Merrill Lynch & Co. and Lehman Brothers Inc. have entered into an
          agreement with the Company pursuant to which, subject to certain
          conditions, they have agreed to purchase the Senior Notes that have
          not been remarketed to other investors in a Remarketing.

          (B) Holders of Senior Notes comprising part of Corporate PIES may
          elect not to participate in the Remarketing by creating Treasury PIES
          if they notify the Purchase Contract Agent of such election and
          deliver the specific U.S. Treasury Security or U.S. Treasury
          Securities not later than 5:00 p.m. (New York City time) on the
          Business Day immediately preceding the first of the three sequential
          remarketing dates of any Three-Day Remarketing Period. A Holder that
          has not timely created Treasury PIES by delivering the Treasury
          Security or Treasury Securities pursuant to this paragraph and Section
          3.13 of the Purchase Contract Agreement shall be deemed to have
          elected to participate in any Remarketing.

          (C) Holders of Separated Senior Notes may elect to have such Separated
          Senior Notes remarketed, if such holder delivers (a) to the Trustee
          and the Collateral Agent a notice of that election, by use of a notice
          in substantially the form of Exhibit B, specifying the aggregate
          principal amount of Senior Notes to be remarketed, and (b) such
          Separated Senior Notes, by book-entry transfer or other appropriate
          procedures, to the Collateral Agent for Remarketing, in each case, by
          5:00 p.m. (New York City time) on or prior to the second Business Day,
          but no earlier than the fifth Business Day, preceding the first of the
          three sequential remarketing dates of any Three-Day Remarketing
          Period. Once the holder of such Separated Senior Notes delivers such
          notice and Separated Senior Notes as specified in the preceding
          sentence, such election may not be withdrawn and may not be
          conditioned upon (i) the level at which the Reset Rate is established
          in the Remarketing or (ii) the extent to which the other terms of the
          Senior Notes may be modified in the Remarketing, including the
          interest payment dates, the maturity date (which may be extended to a
          maximum term of 11 years

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          from the Remarketing Settlement Date), the redemption provisions and
          the addition of covenants applicable to the Senior Notes; provided,
          however, that if such a holder delivers only such a notice but not the
          Separated Senior Notes subject to the notice, or vice versa, then none
          of such holder's Separated Senior Notes shall be included in the
          Remarketing. On the Business Day immediately preceding the first of
          the three sequential remarketing dates of any Three-Day Remarketing
          Period, the Collateral Agent shall notify the Remarketing Agents of
          the aggregate number of Separated Senior Notes to be remarketed. If
          there is a Successful Remarketing, the Collateral Agent shall transfer
          such Separated Senior Notes in accordance with the instructions
          provided by the Remarketing Agents pursuant to the Remarketing
          Agreement. In the event that all remarketing attempts during any
          Three-Day Remarketing Period are unsuccessful, the Collateral Agent
          shall Transfer such Separated Senior Notes to the holders by the end
          of the Business Day following any such unsuccessful remarketing
          attempt.

          (D) The Company (a) during the Early Remarketing Period may, at its
          option, and in its sole discretion, select one or more Three-Day
          Remarketing Periods consisting of three successive remarketing dates
          on each of which it shall cause the Remarketing Agents to use
          commercially reasonable efforts to remarket, in whole (but not in
          part), unless the Senior Notes have previously been successfully
          remarketed in accordance with provisions of the Remarketing Agreement,
          (i) the Pledged Senior Notes of holders who have not notified the
          Purchase Contract Agent of their intention to settle their purchase
          contracts in cash and (ii) any Separated Senior Notes of Holders who
          have elected in the manner set forth in the Purchase Contract
          Agreement and the Pledge Agreement to have their Senior Notes so
          remarketed, for settlement on the Remarketing Settlement Date and (b)
          shall, unless the Pledged Senior Notes have previously been
          successfully remarketed, cause the Remarketing Agents to use
          commercially reasonable efforts to remarket, in whole (but not in
          part), on each remarketing date during the Final Remarketing Period
          (i) the Pledged Senior Notes the Holders of which have failed to
          notify the Purchase Contract Agent, on or prior to the sixth Business
          Day immediately preceding the Purchase Contact Settlement Date, of
          their intention to settle such purchase contracts in cash, and (ii)
          any Separated Senior Notes of Holders who have elected in the manner
          set forth herein to have their Senior Notes so remarketed, for
          settlement on the Purchase Contract Settlement Date. The Company may
          select a Three-Day Remarketing Period during the Early Remarketing
          Period by designating each of the three sequential remarketing dates
          to comprise such Three-Day Remarketing Period, provided that no such
          remarketing date shall occur earlier than the day following the
          consummation of the Exchange Offer and later than the ninth Business
          Day prior to the Purchase Contract Settlement Date.

     (ii) Remarketing Notice Requirements and Procedures.

          (A) On the fourth Business Day immediately preceding the first of the
          three sequential remarketing dates of any Three-Day Remarketing Period
          (each such date, a "Remarketing Announcement Date"), the Company shall
          give notice of the

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          Remarketing in an Authorized Newspaper, including the specific U.S.
          Treasury Security or Treasury Securities (including the CUSIP number
          and/or the principal terms of such Treasury Security or Treasury
          Securities) that must be delivered by Holders of Corporate PIES that
          elect not to participate in the Remarketing pursuant to Section 5.3(c)
          of the Purchase Contract Agreement, that the Senior Notes may be
          remarketed on any and all of the fourth, fifth and sixth Business Days
          following such Remarketing Announcement Date. Promptly after 11:00
          a.m. (New York City time) on the Business Day immediately preceding
          the first of the three sequential remarketing dates of any Three-Day
          Remarketing Period, the Purchase Contract Agent shall notify the
          Remarketing Agents, the Company, the Collateral Agent and the Trustee
          of the aggregate principal amount of Pledged Senior Notes to be
          remarketed, and the Collateral Agent shall notify the Remarketing
          Agents, the Trustee and the Company of the aggregate principal amount
          of Separated Senior Notes to be included in the Remarketing and shall
          concurrently therewith, pursuant to the Pledge Agreement, deliver for
          Remarketing to the Remarketing Agents all Remarketing Senior Notes. In
          the event that all of the remarketing attempts during any Three-Day
          Remarketing Period are unsuccessful, the Company will cause a notice
          of the unsuccessful remarketing attempt to be published in an
          Authorized Newspaper no later than the second Business Day following
          the last sequential remarketing date of such Three-Day Remarketing
          Period.

          (B) The Company will request not later than seven nor more than
          fifteen calendar days prior to each Remarketing Announcement Date,
          that the Depositary (or any successor or its nominee) notify the
          Depository participants holding Senior Notes of the Remarketing.

          (C) The Remarketing Agents shall use their commercially reasonable
          efforts to remarket the Remarketing Senior Notes pursuant to the
          procedures set forth in Section 2 of Remarketing Agreement.

          (D) In addition to the procedures set forth in the Remarketing
          Agreement, if a Failed Remarketing occurs the Collateral Agent, under
          the Pledge Agreement and for the benefit of the Company, may, on the
          written direction of the Company, exercise its rights as a secured
          party with respect to such Pledged Senior Notes, including those
          actions specified below; provided that, if upon a Failed Remarketing,
          the Collateral Agent exercises such rights for the benefit of the
          Company with respect to such Pledged Senior Notes, any accumulated and
          unpaid interest on such Senior Notes will become payable by the
          Company to the Purchase Contract Agent for payment to the Holders of
          the Corporate PIES to which such Senior Notes relates. Such payment
          will be made by the Company on or prior to 11:00 a.m. (New York City
          time), on the Purchase Contract Settlement Date in lawful money of the
          United States by wire transfer in immediately available funds payable
          to or upon the order of the Purchase Contract Agent.

          With respect to any Pledged Senior Notes which are subject of a Failed
          Remarketing, the Collateral Agent, for the benefit of the Company,
          reserves all of

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          its rights as a secured party with respect thereto and, subject to
          applicable law, may, on the written direction of the Company, (i)
          retain such Senior Notes in full satisfaction of the Holders'
          obligations under the related Purchase Contracts or (ii) sell such
          Senior Notes in one or more public or private sales.

          (E) If all of the holders of Corporate PIES elect not to participate
          in the Remarketing and no holders of Senior Notes that are not a
          component of Corporate PIES elect to participate in the Remarketing
          and deliver their Senior Notes and a notice of such election to the
          Collateral Agent, pursuant to and in accordance with the Pledge
          Agreement then, (i) the Remarketing Agents shall, in their sole
          discretion, determine the rate that, in their judgment, would have
          been established had a Remarketing been held on the Remarketing Date,
          and such rate shall be the Reset Rate; and (ii) by approximately 4:30
          p.m. (New York City time), on the third Business Day preceding the
          Purchase Contract Settlement Date, the Remarketing Agents shall advise
          by telephone (promptly confirmed in writing), the Trustee and the
          Company of such Reset Rate, whereupon the Company shall notify the
          Depositary in writing of such Reset Rate. The Remarketing Agents'
          calculation of the Reset Rate shall be conclusive and binding and the
          Trustee shall have no responsibility for the calculation thereof.

     (iii) Depositary's Procedures, Etc.

     So long as the Corporate PIES, Treasury PIES or the Senior Notes are
     evidenced by one or more Global Senior Notes deposited with the Depositary
     or its nominee, the Company shall request, not later than 15 calendar days
     nor more than 30 calendar days prior to the Remarketing Date, that the
     Depositary notify, directly or indirectly, each beneficial owner of a
     Corporate PIES and a Separated Senior Note of the impending Remarketing.

     In accordance with the Depositary's normal procedures, on the Remarketing
     Settlement Date or the Purchase Contract Settlement Date, as applicable,
     the transactions described above with respect to each Senior Note tendered
     for purchase and sold in the Remarketing shall be executed through the
     Depositary, and the accounts of the respective Depositary Participants
     shall be debited and credited and such Senior Notes delivered by book entry
     as necessary to effect purchases and sales of such Senior Notes. The
     Depositary shall make payment in accordance with its normal procedure;
     provided that, the procedures set forth herein, including provisions for
     payment by purchasers of the Senior Notes in the Remarketing, shall be
     subject to modification to the extent required by the Depositary or if the
     book-entry system is no longer available for the Senior Notes at the time
     of the Remarketing, to facilitate the remarketing of the Senior Notes in
     certificated form, and shall provide for the authentication and delivery of
     Senior Notes in a principal amount equal to the unremarketed portion of
     such Senior Notes. In addition, the Remarketing Agents may modify, the
     settlement procedures set forth herein in order to facilitate the
     settlement process.

     If any Holder of Senior Notes selling Senior Notes in the Remarketing fails
     to deliver such Senior Notes, the direct or indirect Depositary Participant
     of such selling Holder and of any other Person who was to have purchased
     Senior Notes in the Remarketing may

                                       10
<PAGE>
     deliver to any such other Person an aggregate principal amount of Senior
     Notes that is less than the aggregate principal amount of Senior Notes that
     otherwise was to be purchased by such Person. In such event, the aggregate
     principal amount of Senior Notes to be so delivered shall be determined by
     such direct or indirect Depositary Participant, and delivery of such lesser
     aggregate principal amount of Senior Notes shall constitute good delivery.

     (iv) Other Matters Regarding Remarketing.

          (A) The Remarketing Agents may purchase Remarketing Senior Notes for
          their own account. However, under no circumstances, shall the
          Remarketing Agents be obligated to purchase any Senior Notes in
          connection with a Remarketing and neither the Company nor the
          Remarketing Agents shall be obligated to provide or liable for any
          payment upon tender of Senior Notes in a Remarketing.

          (B) Under the Remarketing Agreement, the Company, in its capacity as
          issuer of the Senior Notes, shall be liable for, and shall pay, any
          and all costs and expenses incurred in connection with the
          Remarketing, other than the Remarketing Fee.

          (C) Notwithstanding the Pledge and, if applicable, the delivery of
          Separated Senior Notes to the Collateral Agent for Remarketing, in
          each case, as set forth herein, the Company's obligation to pay
          interest, including any accrued and unpaid interest, on all
          outstanding Senior Notes (whether then comprising a part of Corporate
          PIES or as Separated Senior Notes) pursuant to the Indenture shall
          remain unconditional and absolute.

          (D) In connection with the Remarketing, the Company may add provisions
          to, change and modify provisions of and/or eliminate provisions of the
          Senior Notes without the consent of the Holders, provided, however,
          that such additions, changes, modifications or eliminations are
          permitted under the Remarketing Agreement and provided further, that
          any such additions, changes or modifications (other than the Reset
          Rate) shall be effective only in the event of a Successful
          Remarketing. Upon the occurrence of a Successful Remarketing, (i) this
          Officers' Certificate shall be replaced with an Amended and Restated
          Officers' Certificate that reflects any such additions, changes,
          modifications or eliminations to the Senior Notes (the "Second
          Officers' Certificate") and (ii) the Company shall direct the Trustee
          to, and the Trustee shall, make a notation on the face of the Global
          Senior Note that indicates that a Successful Remarketing has occurred
          and that the terms of the Senior Notes that have been remarketed shall
          be governed by the Second Officers' Certificate and the Company shall
          direct the Trustee to, and the Trustee shall, make a similar notation
          on the face of all Certificated Senior Notes.

          (E) In the event of a Failed Remarketing or if no remarketing shall
          have occurred, (i) the Reset Rate shall be set forth in an Officers'
          Certificate

                                       11
<PAGE>
          supplemental to this Officers' Certificate, and (ii) the Company shall
          direct the Trustee to, and the Trustee shall, make a notation as to
          the Reset Rate on the face of the Global Senior Note and on the face
          of all Certificated Senior Notes.

          (F) The Holders will be deemed to have consented to the modified
          provisions of the Senior Notes pursuant to and in accordance with the
          terms of the Remarketing Agreement.

     (v)  Tax Treatment. The Company agrees, and by purchasing a beneficial
          ownership interest in the Senior Notes each Holder of Senior Notes
          will be deemed to have agreed, for United States federal income tax
          purposes (a) to treat the Senior Notes and the purchase contracts as
          separate assets, (b) to treat the exchange of the purchase contracts
          pursuant to the Exchange Offer as not being a realization event, (c)
          to treat the old notes as exchanged in the Exchange Offer for the
          Senior Notes and cash as a "recapitalization," (d) assuming that the
          Senior Notes will be listed for trading on the New York Stock Exchange
          within 30 days after the consummation of the Exchange Offer, to treat
          the Senior Notes as publicly traded within the meaning of the
          applicable United States Treasury Regulations, (e) to treat the
          acquisition of a Corporate PIES as the acquisition of a unit
          consisting of a stock purchase contract and a senior note issued by
          the Company and to treat the Senior Notes as indebtedness that is
          subject to Treas. Reg. Sec. 1.1275-4 (the "Contingent Payment
          Regulations") and (f) to be bound by the Company's determination of
          the "comparable yield" and "projected payment schedule," within the
          meaning of the Contingent Payment Regulations, with respect to the
          Senior Notes. The Company has determined that the comparable yield is
          an annual rate of ___%, compounded quarterly. Based on the comparable
          yield, the projected payment schedule per senior note is $_____ for
          the period ending on August 15, 2005.

20.  Definitions.

     "Applicable Spread" means the spread corresponding to the Prevailing Rating
of the Senior Notes, as set forth below, in effect at the close of business on
the Business Day immediately preceding the date of the Failed Remarketing, if
applicable:

<TABLE>
<CAPTION>
     Prevailing Rating                                                Spread
     -----------------                                                ------
<S>                                                                   <C>
     AA/Aa2.....................................................      3.00%
     A/A2.......................................................      4.00%
     BBB/Baa2...................................................      5.00%
     Below BBB/Baa2.............................................      7.00%
</TABLE>

     "Authorized Newspaper" has the meaning set forth in Section 1.1(d) of the
Purchase Contract Agreement.

     "Business Day" has the meaning set forth in Section 1.1(d) of the Purchase
Contract Agreement.

                                       12
<PAGE>
     "Cash Settlement" has the meaning set forth in Section 5.8(a)(i) of the
Purchase Contract Agreement.

     "Corporate PIES" has the meaning set forth in Section 1.1(d) of the
Purchase Contract Agreement.

     "Early Remarketing Period" means the day following the consummation of the
Exchange Offer and ending on the ninth Business Day prior to the Purchase
Contract Settlement Date.

     "Early Settlement" has the meaning set forth in Section 5.9(a) of the
Purchase Contract Agreement.

     "Exchange Offer" shall mean the exchange offer of the Company's existing
Corporate PIES for a like amount of the Company's new Corporate PIES to be
issued upon completion of the Offer pursuant to and in accordance with the terms
of the Company's exchange offer prospectus dated April 15, 2005, as amended,
modified and supplemented from time to time.

     "Failed Remarketing" has the meaning set forth in Section 2(f) of the
Remarketing Agreement.

     "Final Remarketing Period" has the meaning set forth in Section 1 of the
Pledge Agreement.

     "Holder" means the beneficial holder of any Senior Notes, whether Pledged
Senior Notes or Separated Senior Notes.

     "Interest Payment Dates" has the meaning set forth in paragraph 7 hereof.

     "Issue Date" means _______ __, 2005.

     "Merger Early Settlement" has the meaning set forth in Section 5.10 of the
Purchase Contract Agreement.

     "Outstanding", when used with respect to the Senior Notes means as of the
date of determination, all Senior Notes, theretofore authenticated and delivered
under the Indenture, except:

     (a) Senior Notes theretofore canceled by the Trustee or delivered to the
     Trustee for cancellation;

     (b) Senior Notes for whose payment at Maturity the necessary amount of
     money or money's worth has been theretofore deposited (other than pursuant
     to Section 402 of the Indenture) with the Trustee or any Paying Agent
     (other than the Company) in trust or set aside and segregated in trust by
     the Company (if the Company shall act as its own Paying Agent) for the
     Holders of such Senior Notes;

     (c) Senior Notes with respect to which the Company has effected defeasance
     or covenant defeasance has been effected pursuant to Section 402 of the
     Indenture; and

                                       13
<PAGE>
     (d) Senior Notes that have been paid pursuant to Section 306 of the
     Indenture or in exchange for or in lieu of which other Senior Notes have
     been authenticated and delivered pursuant to the Indenture, other than any
     such Senior Notes in respect of which there shall have been presented to
     the Trustee proof satisfactory to it that such Senior Notes are held by a
     bona fide purchaser in whose hands such Senior Notes are valid obligations
     of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Senior Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Senior Notes for quorum purposes, Senior Notes owned by
the Company or any other obligor upon the Senior Notes or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making any such determination or relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Senior Notes which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Senior Notes so owned which shall have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee (A) the pledgee's right so to act with respect to such Senior Notes and
(B) that the pledgee is not the Company or any other obligor upon the Senior
Notes or an Affiliate of the Company or such other obligor.

     "Pledge" has the meaning set forth in Section 1 of the Pledge Agreement.

     "Pledge Agreement" means the Pledge Agreement, dated as of _________ __,
2005, among the Company, Wells Fargo Bank, National Association, as Collateral
Agent and Securities Intermediary, and The Bank of New York, as Purchase
Contract Agent, as the same may be amended, modified or supplemented from time
to time in accordance with the terms thereof.

     "Pledged Senior Note" has the meaning set forth in Section 1 of the Pledge
Agreement.

     "Prevailing Rating," for the purposes of the definition of Applicable
Spread, means:

     (a) AA/Aa2 if the Senior Notes have a credit rating of AA or better by
     Standard & Poor's Ratings Services, Inc. ("S&P") and Aa2 or better by
     Moody's Investors Service, Inc. ("Moody's") or the equivalent of such
     ratings by such agencies or a substitute rating agency or substitute rating
     agencies selected by the Remarketing Agents;

     (b) if not under clause (i) above, then A/A2 if the Senior Notes have a
     credit rating of A or better by S&P and A2 or better by Moody's or the
     equivalent of such ratings by such agencies or a substitute rating agency
     or substitute rating agencies selected by the Remarketing Agents;

     (c) if not under clauses (i) or (ii) above, then BBB/Baa2 if the Senior
     Notes have a credit rating of BBB or better by S&P and Baa2 or better by
     Moody's or the equivalent of such ratings by such agencies or a substitute
     rating agency or substitute rating agencies selected by the Remarketing
     Agents; or

                                       14
<PAGE>
     (d) if not under clauses (i), (ii) or (iii) above, then Below BBB/Baa2.

     Notwithstanding the foregoing, (A) if (i) the credit rating of the Senior
Notes by S&P shall be on the "Credit Watch" of S&P with a designation of
"negative implications" or "developing", or (ii) the credit rating of the Senior
Notes by Moody's shall be on the "Corporate Credit Watch List" of Moody's with a
designation of "downgrade" or "uncertain", or, in each case, on any successor
list of S&P or Moody's with a comparable designation, the Prevailing Ratings of
the Senior Notes shall be deemed to be within a range one full level lower in
the table set forth in the definition of Applicable Spread than those actually
assigned to the Senior Notes by S&P and Moody's and (B) if the Senior Notes are
rated by only one rating agency prior to or on the Remarketing Date, the
Prevailing Rating shall at all times be determined without reference to the
rating of any other rating agency; provided that, if no such rating agency shall
have in effect a rating for the Senior Notes and the Remarketing Agents is
unable to identify a substitute rating agency or rating agencies, the Prevailing
Rating shall be Below BBB/Baa2.

     "Purchase Contract Agreement" means the Purchase Contract Agreement, dated
as of _____ __, 2005, between the Company and The Bank of New York, as Purchase
Contract Agent, as the same may be amended, modified or supplemented from time
to time in accordance with the terms thereof.

     "Purchase Contract Settlement Date" means November 15, 2005.

     "Regular Record Date" means, with respect to each Interest Payment Date,
the close of business on the 15th Business Day preceding such Interest Payment
Date with respect to Certificated Notes or other notes in definitive form, or,
with respect to Senior Notes in the form of a Global Senior Note, the close of
business on the Business Day preceding such Interest Payment Date.

     "Remarketing" means the remarketing of the Remarketing Senior Notes
pursuant to this Officers' Certificate, the Purchase Contract Agreement, the
Pledge Agreement and the Remarketing Agreement.

     "Remarketing Agents" has the meaning set forth in the recitals of the
Remarketing Agreement.

     "Remarketing Agreement" means the Remarketing Agreement, dated as of
________ __, 2005 between the Company and the Remarketing Agents, as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.

     "Remarketing Procedures" means, collectively, the procedures and
requirements relating to the Remarketing and the determination of the Reset Rate
as set forth in this Officers' Certificate, the Purchase Contract Agreement, the
Pledge Agreement and the Remarketing Agreement.

     "Remarketing Senior Notes" has the meaning set forth in paragraph 19(i)(A).

     "Remarketing Settlement Date" means the date of the settlement of any
Successful Remarketing, which will be three Business Days after such
Remarketing.

                                       15
<PAGE>
     "Remarketing Value" has the meaning set forth in Section 1.1(d) of the
Purchase Contract Agreement.

     "Reset Rate" means the interest rate per annum with respect to the Senior
Notes that is determined by the Remarketing Agents pursuant to the Remarketing
Agreement as follows:

     (a) in connection with a Successful Remarketing, the interest rate
     determined by the Remarketing Agents sufficient to allow it to remarket the
     Remarketing Senior Notes at a price at least equal to the Remarketing
     Value;

     (b) upon the occurrence of a Failed Remarketing, the Two-Year Benchmark
     Rate plus the Applicable Spread; or

     (c) if (i) the holders of Pledged Senior Notes have elected not to have
     their Senior Notes remarketed in accordance with Section 5.3(c) of the
     Purchase Contract Agreement and (ii) none of the holders of Separated
     Senior Notes have elected to have their Senior Notes remarketed in
     accordance with paragraph 19(i)(C) of this Officers' Certificate and
     Section 5.7 of the Pledge Agreement, the Reset Rate shall be the rate
     determined, in its sole discretion, by the Remarketing Agents, as the rate
     that, in its judgment, would have been established had a Remarketing being
     held on such date.

     It being understood that the Reset Rate will be set forth, in the event of
a Successful Remarketing, in the Second Officers' Certificate and, otherwise, in
an Officers' Certificate supplemental to this Officers' Certificate.

     "Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation, and the rules and regulations promulgated
thereunder.

     "Separated Senior Notes" means Senior Notes that are not Pledged Senior
Notes.

     "Stated Maturity" means November 15, 2007 or such later date as determined
by the Remarketing Agents and the Company upon a Successful Remarketing, which
shall not be later than the eleventh anniversary of the Remarketing Settlement
Date.

     "Telerate" means the Moneyline Telerate Service.

     "Three-Day Remarketing Period" has the meaning set forth in Section 1 of
the Pledge Agreement.

     "Transfer" has the meaning set forth in the Pledge Agreement.

     "Treasury PIES" has the meaning set forth in 1.1(d) of the Purchase
Contract Agreement.

     "Treasury Security" has the meaning set forth in 1.1(d) of the Purchase
Contract Agreement.

     "Two-Year Benchmark Rate" means the bid side rate displayed at 10:00 a.m.
(New York City time), on the third Business Day preceding the Purchase Contract
Settlement Date for direct

                                       16
<PAGE>
obligations of the United States having a maturity comparable to the remaining
term to the Stated Maturity of the Senior Notes, as agreed upon by the Company
and the Remarketing Agents as displayed in the Telerate system or, if the
Telerate system is no longer available or, in the judgment of the Remarketing
Agents (after consultation with the Company), no longer an appropriate system
from which to obtain such rate, such other nationally recognized quotation
system as, in the judgment of the Remarketing Agents (after consultation with
the Company) is appropriate. If this rate is not so displayed, the Two-Year
Benchmark Rate will be calculated by the Remarketing Agents as the yield to
maturity for direct obligations of the United States having a maturity
comparable to the remaining term to the Stated Maturity of the Senior Notes,
expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis, and computed by taking the arithmetic
mean of the secondary market bid rates, as of 10:30 a.m. (New York City time) on
the third Business Day preceding the Purchase Contract Settlement Date of three
leading United States government securities dealers selected by the Remarketing
Agents (after consultation with the Company) (which may include the Remarketing
Agents or an Affiliate thereof). However, if, in the judgment of the Remarketing
Agents, after consultation with the Company, direct obligations of the United
States are no longer appropriate benchmarks for the purpose of setting the Reset
Rate if a Failed Remarketing has occurred, the Remarketing Agents and the
Company will agree upon another Two-Year Benchmark Rate.

     The undersigned officers of the Company do hereby further certify, pursuant
to Sections 13.04 and 13.05 of the Indenture, as follows:

     (1) We have read the covenants and conditions of the Indenture relating to
     the issuance authentication and delivery of the Senior Notes and in respect
     of compliance with which this certificate is furnished, and the definitions
     in the Indenture relating thereto;

     (2) The statements contained in this certificate are based upon our
     familiarity with the Indenture, the documents accompanying this certificate
     and, as to factual matters, upon our discussions with officers and
     employees of the Company familiar with the facts relating to the matters
     set forth herein;

     (3) In our opinion, we have made such examination or investigation as is
     necessary to enable us to express an informed opinion as to whether or not
     such covenants and conditions have been complied with; and

     (4) In our opinion, such conditions and covenants, and all conditions
     precedent, if any (including any covenants compliance with which
     constitutes a condition precedent) relating to the authentication and
     delivery by the Trustee of the Senior Notes requested to be authenticated
     and delivered on the date hereof, have been complied with.

                                       17
<PAGE>
     IN WITNESS WHEREOF, the undersigned has executed this Officers' Certificate
as of the date first written above.

                                         --------------------------------------
                                         Michael W. Yackira
                                         Corporate Executive Vice President and
                                         Chief Financial Officer

                                         --------------------------------------
                                         [________________]

                                       18
<PAGE>
                            FORM OF 7.93% SENIOR NOTE

      [This Senior Note is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of the Depository Trust
Company, a New York corporation (the "Depository"), or a nominee thereof. This
Senior Note may not be exchanged in whole or in part for a security registered,
and no transfer of this senior note in whole or in part may be registered, in
the name of any person other than such depositary or a nominee thereof, except
in the limited circumstances described in the Indenture.]**

      [Unless this certificate is presented by an authorized representative of
the Depositary, to Sierra Pacific Resources or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. Or in such other name as requested by an authorized
representative of DTC and any payment is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]**

                            SIERRA PACIFIC RESOURCES

                                7.93% SENIOR NOTE

NO.: __________                                           CUSIP NO.:  __________
$______________

      SIERRA PACIFIC RESOURCES, a corporation duly organized and existing under
the laws of the State of Nevada (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to [Cede & Co.]**, or registered assigns
(the "Holder"), the principal sum of _________ Dollars ($_______) [, or such
other principal amount as shall be set forth in the Schedule of Increases or
Decreases attached hereto,]*** on November 15, 2007, or such later date as
determined in the Remarketing (but in no event later than the 11th anniversary
of the Purchase Contract Settlement Date), in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public or private debts and to pay interest thereon from May 15, 2005 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, quarterly in arrears on February 15, May 15, August 15 and
November 15 of each year, commencing on August 15, 2005, at the rate of 7.93%
per annum to, but excluding, either (1) the Remarketing Settlement Date, if
there has been a Successful Remarketing, or (2) the Purchase Contract Settlement
Date, if a Failed Remarketing has occurred or, if there is not a Remarketing at
all pursuant to clause (c) of the definition of "Reset Rate" in the Officers'
Certificate, and at

----------
**    Insert in Global Securities.

***   Insert in Global Securities and Pledged Senior Notes.
<PAGE>
the Reset Rate on such interest payment dates as determined in the Remarketing
thereafter, until the principal hereof is paid or made available for payment.

            Payments of interest on the Senior Notes will include interest
accrued to, but excluding, the respective Interests Payment Dates. Interest
payments for the Senior Notes shall be computed and paid (1) for any full
quarterly period, on the basis of a 360-day year of twelve 30-day months, (2)
for any period shorter than a full quarterly period, on the basis of a 30-day
month and (3) for any period less than a month, on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
interest is payable on the Senior Notes is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or payment in respect of any such
delay), in each case with the same force and effect as if made on the date the
payment was originally due and payable; provided, however, if such Business Day
is in the next calendar year, then such payment will be made on the preceding
Business Day.

            Any principal of or installment of interest on the Senior Notes that
is overdue shall bear interest at the interest rate then borne by the Senior
Notes (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand by the
Holders.

            Interest shall be paid quarterly in arrears on each Interest Payment
Date until the Stated Maturity to the Person in whose name the Senior Notes are
registered on the Regular Record Date for such Interest Payment Date; provided
that, interest payable at the Stated Maturity of principal as provided herein
will be paid to the Person to whom principal is payable. Any such interest that
is not so punctually paid or duly provided for will forthwith cease to be
payable to the Holders on such Regular Record Date and may either be paid to the
Person or Persons in whose name the Senior Notes are registered at the close of
business on a special record date (as such term is used in Section 2.12 of the
Indenture) for the payment of such defaulted interest to be fixed by the
Company, notice whereof shall be given to Holders of the Senior Notes not less
than ten days prior to such special record date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange, if any, on which the Senior Notes may be listed, and upon such notice
as may be required by any such exchange, all as set forth in Section 2.12 of the
Indenture.

      The principal amount of this Senior Note may be increased or decreased
and, in a Remarketing, the terms of this Senior Note may be modified, each as
specified in the Officers' Certificate pursuant to which this Senior Note is
issued. Upon a Successful Remarketing (as defined in the Officers' Certificate),
the Company shall instruct the Trustee to make a notation to the face of this
Senior Note indicating that the terms of this Senior Note have been modified
pursuant to and in accordance with the terms of the Second Officers' Certificate
(as defined in the Officers' Certificate).

      Reference is hereby made to the further provisions of this Senior Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

                                       2
<PAGE>
      Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Senior Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                       3
<PAGE>
      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:                                  SIERRA PACIFIC RESOURCES

                                        By:_____________________________________
                                           Name:
                                           Title:

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.

                                        THE BANK OF NEW YORK, as Trustee

                                        By:_____________________________________
                                           Authorized Signatory

                                       4
<PAGE>
                            [REVERSE OF SENIOR NOTE]

      1.    Indenture; Notes.

            This Senior Note is one of a duly authorized series of Securities of
the Company (the "Senior Notes"), issued and to be issued in one or more series
under an Indenture, dated as of May 1, 2000 (the "Indenture"), between the
Company and The Bank of New York, as Trustee (the "Trustee", which term includes
any successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The terms, conditions and provisions of the
Securities are those stated in the Indenture, those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended, and those set forth
in this Senior Note. To the extent that the terms, conditions and other
provisions of this Senior Note modify, supplement or are consistent with those
of the Indenture, the terms, conditions and other provisions of the Indenture
shall govern.

      The maximum aggregate principal amount of Senior Notes that may be
authenticated and delivered under the Indenture (except for Senior Notes
authenticated and delivered upon registration or transfer of or in exchange for,
or in lieu of other Senior Notes pursuant to Section 2.06, 2.07, 2.09 or 3.07 of
the Indenture) shall be $235,218,000. The Senior Notes are issuable only in
denominations of $1,000 and any integral multiple thereof.

      All capitalized terms that are used but not defined in this Senior Note
shall have the meanings assigned to them in the Officers' Certificate.

      2.    Ranking.

      The Senior Notes shall constitute the senior, unsecured and unsubordinated
debt obligations of the Company and shall rank equally in right of payment with
all other existing and future senior, unsecured and unsubordinated debt
obligations of the Company.

      3.    Form; Transfer, Registration and Exchange.

      Initially, the Senior Notes that are components of certain securities of
the Company referred to as Corporate PIES (the "Corporate PIES") will be issued
in definitive form (the "Certificated Notes") registered in the name of The Bank
of New York, as Purchase Contract Agent (the "Purchase Contract Agent"), under
the Purchase Contract Agreement dated as of ________ __, 2005 between the
Company and the Purchase Contract Agent (the "Purchase Contract Agreement").
Senior Notes that are not components of Corporate PIES shall initially be issued
in the form of one or more global Senior Notes (each a "Global Senior Note") in
the name of Cede & Co. (as nominee for The Depository Trust Company (the
"Depository"), the initial securities depository for the Global Senior Notes.
The Certificated Notes and the Global Senior Notes may bear such legends as
either the Purchase Contract Agent or DTC, respectively, may reasonably request.

                                       5
<PAGE>
      So long as any Senior Notes constitute components of Corporate PIES, they
shall be issued in the form of Certificated Notes. Senior Notes that no longer
constitute components of Corporate PIES shall be issued in the form of Global
Senior Notes. Each Global Senior Note or Certificated Note, as applicable, shall
represent such of the outstanding Senior Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Senior Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Senior Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Senior Note to reflect the amount
of any increase or decrease in the aggregate principal amount of outstanding
Senior Notes represented thereby shall be made by the Trustee, as custodian of
the Global Senior Notes, in accordance with instructions as further set forth
below. Any endorsement of a Certificated Note to reflect the amount of any
decrease in the aggregate principal amount of outstanding Certificated Notes
represented thereby shall be made by the Collateral Agent pursuant to and in
accordance with further instructions as set forth below.

      No beneficial owner of the Senior Notes shall receive a Certificated Note
representing such beneficial owner's interest in such Global Senior Notes,
except as provided in Section 2.06 of the Indenture. Unless and until
Certificated Notes have been issued to the beneficial owners of the Senior Notes
pursuant to Section 2.06 of the Indenture, the rights of the beneficial owners
of the Senior Notes shall be exercised only through the Depositary and shall be
limited to those established by law and agreements between such beneficial
owners and the Depositary and/or the Depositary Participants. The Depositary
shall make book-entry transfers among its participants and receive and transmit
any payments on the Global Senior Notes to such participants; provided that,
solely for the purposes of determining whether the Holders of the requisite
amount of the Senior Notes have voted on any matter provided for in the
Indenture, so long as Certificated Notes have not been issued, the Company may
rely conclusively on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Company by the Depositary
setting forth the votes of the beneficial owners of the Senior Notes or
assigning the right to vote on any matter to any other Persons either in whole
or in part. The Senior Notes are subject to transfer, registration and exchange
as set forth in Section 2.06 of the Indenture, as supplemented by the Officers'
Certificate.

      The Company shall execute, and the Trustee shall authenticate and deliver,
in each case, pursuant to Section 2.02 of the Indenture, one or more Global
Senior Notes that (i) shall represent and be denominated in an amount equal to
the aggregate principal amount of all of the Senior Notes to be issued in the
form of Global Senior Notes and not yet canceled, (ii) shall be registered in
the name of the Depositary for the Senior Notes or the nominee of such
Depositary and (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions.

      Reference is hereby made to Section 2.06 of the Indenture for the
provisions relating to the transfer, registration and exchange of the Senior
Notes. Notwithstanding any other provisions of the Indenture (other than the
provisions set forth in Section 2.06 of the Indenture), Global Senior Notes may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of

                                       6
<PAGE>
such successor Depositary. Interests of beneficial owners may be transferred or
exchanged for Senior Notes not represented by a Global Senior Note, and Senior
Notes not represented by a Global Senior Note may be transferred or exchanged
for a Global Senior Notes or Senior Notes, in accordance with rules of the
Depositary and the provisions of Section 2.06 of the Indenture.

      If any beneficial interest in a Global Senior Note is exchanged for or
transferred to a person who will take delivery thereof in the form of a
beneficial interest in another Global Senior Note or for Certificated Notes, the
principal amount of Senior Notes represented by such Global Senior Note shall be
reduced accordingly and an endorsement shall be made on such Global Senior Note
by the Collateral Agent or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a person who will take delivery thereof in the form of a
beneficial interest in another Global Senior Note, such other Global Senior Note
shall be increased accordingly and an endorsement shall be made on such Global
Senior Note by the Trustee or by the Depositary at the direction of the Trustee
to reflect such increase.

      In the event that any Pledged Senior Notes are to be released from the
Pledge of the Pledge Agreement and delivered to the Purchase Contract Agent
pursuant to Section 5.2(b) of the Pledge Agreement (a "Released Note"), as a
result of the creation of one or more Treasury PIES as provided in Section 5.2
of the Pledge Agreement, such release and delivery shall be evidenced by an
endorsement by the Collateral Agent on the Certificated Note held by the
Collateral Agent reflecting a reduction in the principal amount of such
Certificated Note equal in amount (the "Reduced Principal Amount") to the
principal amount of the Released Note. The Collateral Agent shall confirm any
such Reduced Principal Amount by telecopying or otherwise delivering a photocopy
of such endorsement made on the Certificated Note evidencing such Reduced
Principal Amount to the Trustee at the telecopier number or address of the
Purchase Contract Agent provided for notices to the Purchase Contract Agent in
the Pledge Agreement (or at such other telecopier or address as the Trustee
shall provide to the Collateral Agent). Upon receipt of such confirmation, the
Trustee shall instruct the Collateral Agent to increase the principal amount of
a Global Note held by the Collateral Agent in an amount equal to the Reduced
Principal Amount by an endorsement made by the Collateral Agent on such Global
Note to reflect such increase.

      In the event that a Senior Note is transferred to the Collateral Agent
pursuant to Section 5.3(a) of the Pledge Agreement (a "Subjected Note") in
connection with the recreation of Corporate PIES as provided in Section 5.3 of
the Pledge Agreement, such transfer shall be evidenced by an endorsement by the
Collateral Agent on the Certificated Note held by the Collateral Agent
reflecting an increase in the principal amount of such Certificated Note equal
in amount (the "Increased Principal Amount") to the principal amount of such
Subjected Note. The Collateral Agent shall confirm any such Increased Principal
Amount by telecopying or otherwise delivering a photocopy of such endorsement
made on the Certificated Note evidencing such Increased Principal Amount to the
Trustee at the telecopier number or address of the Purchase Contract Agent
provided for notices to the Purchase Contract Agent in the Pledge Agreement (or
at such other telecopier or address as the Trustee shall provide to the
Collateral Agent). Upon receipt of such confirmation, the Trustee shall instruct
the Collateral Agent to decrease the principal amount of the Senior Global Note
held by the Collateral Agent in an

                                       7
<PAGE>
amount equal to the Increased Principal Amount by an endorsement made by the
Collateral Agent on such Senior Global Note to reflect such decrease.

      4.    Pledge.

      Upon initial issuance, the Senior Notes shall be pledged to the Collateral
Agent for the benefit of the Company, pursuant to the terms of the Pledge
Agreement, as collateral to secure the obligations of the Holders of Corporate
PIES to purchase the Common Stock in accordance with the terms of the Purchase
Contract Agreement. The Senior Notes may be transferred, in whole or in part,
only in accordance with the terms and conditions set forth in the Indenture, the
Pledge Agreement and the Purchase Contract Agreement. To the fullest extent
permitted by law, any transfer or purported transfer of any Senior Note not made
in accordance with the Indenture shall be null and void. Subject to this
Section, the Senior Notes shall be freely transferable.

      5.    Place and Method of Payment.

      Payments of the principal of and interest on the Senior Notes shall be
made at the office of the Paying Agent, with any such payment that is due at the
Stated Maturity of any Senior Notes being made upon surrender of such Senior
Notes to the Paying Agent. Payments of interest (including interest on any
Interest Payment Date) will be made at the option of the Company, (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer at such place and to
such account at a banking institution in the United States as may be designated
in writing to the Trustee at least sixteen days prior to the date for payment by
the Person entitled thereto.

      6.    No Redemption or Sinking Fund.

      Except as set forth in the Officers' Certificate, the Senior Notes shall
not be redeemable at the option of the Company, the Holders or otherwise; and
there shall be no sinking fund with respect to the Senior Notes.

      7.    Remarketing.

            (i) Remarketing Rights. (A) The Remarketing Senior Notes shall be
remarketed in the Remarketing pursuant to the Remarketing Procedures. All
holders of PIES Senior Notes, including those who have attempted to effect a
Cash Settlement pursuant to Section 5.8 of the Purchase Contract Agreement,
Early Settlement pursuant to Section 5.9 of the Purchase Contract Agreement or
Merger Early Settlement pursuant to Section 5.10 of the Purchase Contract
Agreement but have failed to follow the procedures for such settlements shall be
deemed to have consented to the Remarketing of their Senior Notes pursuant to
the Remarketing Procedures in any Remarketing, or in the case of an unsuccessful
Cash Settlement, in the Final Remarketing Period. The right of each Holder of
Senior Notes to have its Senior Notes remarketed will be limited, however, to
the extent that (i) the Remarketing Agents conduct a Remarketing pursuant to the
terms of the Remarketing Agreement, (ii) the Remarketing Agents are able to find
a purchaser or purchasers for the tendered Senior Notes, (iii) such purchaser or
purchasers deliver the purchase price therefor to the Remarketing Agents and
(iv) the Remarketing may not commenced or be consummated pursuant to applicable
law. In addition, all holders of Senior

                                       8
<PAGE>
Notes shall be deemed to have consented to the Remarketing Procedures and the
terms of the Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement with respect to the pledge and transfer and other
provisions of these agreements with respect to their Senior Notes, pursuant to
the terms of such agreements. Notwithstanding anything to the contrary contained
in the Officers' Certificate, the Remarketing Agents have also entered into an
agreement with the Company pursuant to which, subject to certain conditions,
they have agreed to purchase the Senior Notes that have not been remarketed to
other investors in a Remarketing.

      (B) Holders of Senior Notes comprising part of Corporate PIES may elect
not to participate in the Remarketing by creating Treasury PIES if it notifies
the Purchase Contract Agent of such election and delivers the specific U.S.
Treasury Security or U.S. Treasury Securities not later than 5:00 p.m. (New York
City time) on the Business Day immediately preceding the first of the three
sequential remarketing dates of any Three-Day Remarketing Period. A Holder that
has not so created Treasury PIES by delivering the Treasury Security or Treasury
Securities pursuant to this paragraph and Section 3.13 of the Purchase Contract
Agreement shall be deemed to have elected to participate in any Remarketing.

      (C) Holders of Separated Senior Notes may elect to have such Separated
Senior Notes remarketed, if such holder delivers (a) to the Trustee and the
Collateral Agent a notice of that election, by use of a notice in substantially
the form of Exhibit B to the Officers' Certificate, specifying the aggregate
principal amount of Senior Notes to be remarketed, and (b) such Separated Senior
Notes, by book-entry transfer or other appropriate procedures, to the Collateral
Agent for Remarketing, in each case, by 5:00 p.m. (New York City time) on or
prior to the second Business Day, but no earlier than the fifth Business Day,
preceding the first of the three sequential remarketing dates of any Three-Day
Remarketing Period. Once the holder of such Separated Senior Notes delivers such
notice and Separated Senior Notes as specified in the preceding sentence, such
election may not be withdrawn and may not be conditioned upon (i) the level at
which the Reset Rate is established in the Remarketing or (ii) the extent to
which the other terms of the Senior Notes may be modified in the Remarketing,
including the interest payment dates, the maturity date (which may be extended
to a maximum term of 11 years from the Remarketing Settlement Date), the
redemption provisions and the addition of covenants applicable to the Senior
Notes; provided, however, that if such a holder delivers only such a notice but
not the Separated Senior Notes subject to the notice, or vice versa, then none
of such holder's Separated Senior Notes shall be included in the Remarketing. On
the Business Day immediately preceding the first of the three sequential
remarketing dates on any Three-Day Remarketing Period, the Collateral Agent
shall notify the Remarketing Agents of the aggregate number of Separated Senior
Notes to be remarketed. If there is a Successful Remarketing, the Collateral
Agent shall transfer such Separated Senior Notes in accordance with the
instructions provided by the Remarketing Agents pursuant to the Remarketing
Agreement. In the event that all remarketing attempts during any Three-Day
Remarketing Period are unsuccessful, the Collateral Agent shall Transfer such
Separated Senior Notes to the holders by the end of the Business Day following
any such unsuccessful remarketing attempt.

      (D) The Company (a) during the Early Remarketing Period may, at its
option, and in its sole discretion, select one or more Three-Day Remarketing
Periods consisting of three successive remarketing dates on each of which it
shall cause the Remarketing Agents to

                                       9
<PAGE>
remarket, in whole (but not in part), unless the Senior Notes have previously
been successfully remarketed in accordance with provisions of the Remarketing
Agreement, (i) the Pledged Senior Notes of Holders who have not notified the
Purchase Contract Agent of their intention to settle their purchase contracts in
cash and (ii) any Separated Senior Notes of Holders who have elected in the
manner set forth in the Purchase Contract Agreement, the Pledge Agreement and
the Remarketing Agreement to have their Senior Notes so remarketed, for
settlement on the Remarketing Settlement Date and (b) shall, unless the Pledged
Senior Notes have previously been successfully remarketed, cause the Remarketing
Agents to remarket, in whole (but not in part), on each remarketing date during
the Final Remarketing Period (i) the Pledged Senior Notes the Holders of which
have failed to notify the Purchase Contract Agent, on or prior to the sixth
Business Day immediately preceding the Purchase Contact Settlement Date, of
their intention to settle such purchase contracts in cash, and (ii) any
Separated Senior Notes of Holders who have elected in the manner set forth
herein to have their Senior Notes so remarketed, for settlement on the Purchase
Contract Settlement Date. The Company may select a Three-Day Remarketing Period
during the Early Remarketing Period by designating each of the three sequential
remarketing dates to comprise such Three-Day Remarketing Period, provided that
no Remarketing Date shall occur earlier than the day following the consummation
of the Exchange Offer and later than the ninth Business Day prior to the
Purchase Contract Settlement Date.

            (ii) Remarketing Notice Requirements and Procedures. (A) On the
fourth Business Day immediately preceding the first of the three sequential
remarketing dates of any Three-Day Remarketing Period (each such date, a
"Remarketing Announcement Date"), the Company shall give notice of the
Remarketing in an Authorized Newspaper, including the specific U.S. Treasury
Security or Treasury Securities (including the CUSIP number and/or the principal
terms of such Treasury Security or Treasury Securities) that must be delivered
by Holders of Corporate PIES that elect not to participate in the Remarketing
pursuant to Section 5.3(c) of the Purchase Contract Agreement, that the Senior
Notes may be remarketed on any and all of the fourth, fifth and sixth Business
Days following such Remarketing Announcement Date. Promptly after 11:00 a.m.
(New York City time) on the Business Day immediately preceding the first of the
three sequential remarketing dates of any Three-Day Remarketing Period, as
applicable, the Purchase Contract Agent shall notify the Remarketing Agents, the
Company, the Collateral Agent and the Trustee of the aggregate principal amount
of Pledged Senior Notes to be remarketed, and the Collateral Agent shall notify
the Remarketing Agents, the Trustee and the Company of the aggregate principal
amount of Separated Senior Notes and shall concurrently therewith, pursuant to
the Pledge Agreement, deliver for Remarketing to the Remarketing Agents all
Remarketing Senior Notes. In the event that all of the remarketing attempts
during any Three-Day Remarketing Period are unsuccessful, the Company will cause
a notice of the unsuccessful remarketing attempt to be published in an
Authorized Newspaper no later than the Second Business Day following the last
sequential remarketing date of such Three-Day Remarketing Period.

      (B) The Company will request not later than seven nor more than fifteen
calendar days prior to each Remarketing Announcement Date, that the Depositary
(or any successor or its nominee) notify the Depository participants holding
Senior Notes of the Remarketing.

                                       10
<PAGE>
      (C) The Remarketing Agents shall use their commercially reasonable efforts
to remarket the Remarketing Senior Notes pursuant to the procedures set forth in
Section 2 of Remarketing Agreement.

      (D) In addition to the procedures set forth in the Remarketing Agreement,
if a Failed Remarketing occurs the Collateral Agent, under the Pledge Agreement
and for the benefit of the Company, may, on the written direction of the
Company, exercise its rights as a secured party with respect to such Pledged
Senior Notes, including those actions specified below; provided that, if upon a
Failed Remarketing, the Collateral Agent exercises such rights for the benefit
of the Company with respect to such Pledged Senior Notes, any accumulated and
unpaid interest on such Senior Notes will become payable by the Company to the
Purchase Contract Agent for payment to the Holders of the Corporate PIES to
which such Senior Notes relates. Such payment will be made by the Company on or
prior to 11:00 a.m. (New York City time), on the Purchase Contract Settlement
Date in lawful money of the United States by wire transfer in immediately
available funds payable to or upon the order of the Purchase Contract Agent.

With respect to any Pledged Senior Notes which are subject of a Failed
Remarketing, the Collateral Agent, for the benefit of the Company, reserves all
of its rights as a secured party with respect thereto and, subject to applicable
law, may, on the written direction of the Company, (i) retain such Senior Notes
in full satisfaction of the Holders' obligations under the related Purchase
Contracts or (ii) sell such Senior Notes in one or more public or private sales.

      (E) If all of the holders of Corporate PIES elect not to participate in
the Remarketing and no holders of Senior Notes that are not a component of
Corporate PIES elect to participate in the Remarketing and deliver their Senior
Notes and a notice of such election to the Collateral Agent, pursuant to and in
accordance with the Pledge Agreement then, (i) the Remarketing Agents shall, in
its sole discretion, determine the rate that, in its judgment, would have been
established had a Remarketing been held on the Remarketing Date, and such rate
shall be the Reset Rate; and (ii) by approximately 4:30 p.m. (New York City
time), on the third Business Day preceding the Purchase Contract Settlement
Date, the Remarketing Agents shall advise by telephone (promptly confirmed in
writing), the Trustee and the Company of such Reset Rate, whereupon the Company
shall notify the Depositary in writing of such Reset Rate.

      The Remarketing Agents' calculation of the Reset Rate shall be conclusive
and binding and the Trustee shall have no responsibility for the calculation
thereof.

      (iii) Depositary's Procedures, Etc.

      So long as the Corporate PIES, Treasury PIES or the Senior Notes are
evidenced by one or more Global Senior Notes deposited with the Depositary or
its nominee in writing of such Reset Rate, the Company shall request, not later
than 15 calendar days nor more than 30 Business Days prior to the Remarketing
Date, that the Depositary notify, directly or indirectly, each beneficial owner
of a Corporate PIES and of a Separated Senior Note of the impending Remarketing.

      In accordance with the Depositary's normal procedures, on the Remarketing
Settlement Date or the Purchase Contract Settlement Date, as applicable, the
transactions described above

                                       11
<PAGE>
with respect to each Senior Note tendered for purchase and sold in the
Remarketing shall be executed through the Depositary, and the accounts of the
respective Depositary Participants shall be debited and credited and such Senior
Notes delivered by book entry as necessary to effect purchases and sales of such
Senior Notes. The Depositary shall make payment in accordance with its normal
procedure; provided that, the procedures set forth herein, including provisions
for payment by purchasers of the Senior Notes in the Remarketing, shall be
subject to modification to the extent required by the Depositary or if the
book-entry system is no longer available for the Senior Notes at the time of the
Remarketing, to facilitate the tendering and remarketing of the Senior Notes in
certificated form, and shall provide for the authentication and delivery of
Senior Notes in a principal amount equal to the unremarketed portion of such
Senior Notes. In addition, the Remarketing Agents may modify, the settlement
procedures set forth herein in order to facilitate the settlement process.

      If any Holder of Senior Notes selling Senior Notes in the Remarketing
fails to deliver such Senior Notes, the direct or indirect Depositary
Participant of such selling Holder and of any other Person who was to have
purchased Senior Notes in the Remarketing may deliver to any such other Person
an aggregate principal amount of Senior Notes that is less than the aggregate
principal amount of Senior Notes that otherwise was to be purchased by such
Person. In such event, the aggregate principal amount of Senior Notes to be so
delivered shall be determined by such direct or indirect Depositary Participant,
and delivery of such lesser aggregate principal amount of Senior Notes shall
constitute good delivery.

      (iv) Other Matters Regarding Remarketing.

      (A) The Remarketing Agents may purchase Remarketing Senior Notes for their
own account. However, under no circumstances, shall the Remarketing Agents be
obligated to purchase any Senior Notes in connection with a Remarketing and
neither the Company nor the Remarketing Agents shall be obligated to provide or
liable for any payment upon tender of Senior Notes in a Remarketing.

      (B) Under the Remarketing Agreement, the Company, in its capacity as
issuer of the Senior Notes, shall be liable for, and shall pay, any and all
costs and expenses incurred in connection with the Remarketing, other than the
Remarketing Fee.

      (C) Notwithstanding the Pledge and, if applicable, the delivery of
Separated Senior Notes to the Collateral Agent for Remarketing, in each case, as
set forth herein, the Company's obligation to pay interest, including any
accrued and unpaid interest, on all outstanding Senior Notes (whether then
comprising a part of Corporate PIES or as Separated Senior Notes) pursuant to
the Indenture shall remain unconditional and absolute.

      (D) In connection with the Remarketing, the Company may add provisions to,
change and modify provisions of and/or eliminate provisions of the Senior Notes
without the consent of the Holders, provided, however, that such additions,
changes, modifications or eliminations are permitted under the Remarketing
Agreement and provided further, that any such additions, changes or
modifications (other than the Reset Rate) shall be effective only in the event
of a Successful Remarketing. Upon the occurrence of a Successful Remarketing,
(i) this Officers' Certificate shall be replaced with an Amended and Restated
Officers' Certificate that reflects any

                                       12
<PAGE>
such additions, changes, modifications or eliminations to the Senior Notes (the
"Second Officers' Certificate") and (ii) the Company shall direct the Trustee
to, and the Trustee shall, make a notation on the face of the Global Senior Note
that indicates that a Successful Remarketing has occurred and that the terms of
the Senior Notes that have been remarketed shall be governed by the Second
Officers' Certificate and the Company shall direct the Trustee to, and the
Trustee shall, make a similar notation on the face of all Certificated Senior
Notes.

      (E) The Holders will be deemed to have consented to the modified
provisions of the Senior Notes pursuant to and in accordance with the terms of
the Remarketing Agreement.

      8.    Default and Remedies.

      If an Event of Default with respect to Senior Notes shall occur and be
continuing, the principal of the Senior Notes may be declared due and payable in
the manner and with the effect and consequent remedies to the Holders, in each
case, as provided in the Indenture.

      No Holder of any Senior Note shall have any right by virtue or by availing
of any provision of the Indenture to institute any action or proceeding at law
or in equity or in bankruptcy or otherwise upon or under or with respect to the
Indenture, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of a Continuing Event
of Default and unless the Holders of not less than 25% in aggregate principal
amount of the Senior Notes then Outstanding shall have made written request upon
the Trustee to institute such action or proceedings in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action or
proceeding and the Holders of a majority in principal amount of then Outstanding
Senior Notes shall have not given the Trustee a direction inconsistent with such
request, it being understood and intended, and being expressly covenanted by the
Holders of every Senior Note with every other Holder and the Trustee, that no
one or more Holders of Senior shall have any right in any manner whatever by
virtue or by availing of any provision of the Indenture to affect, disturb or
prejudice the rights of any other such Holder of Senior Notes, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under the Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of Senior Notes. For
the protection and enforcement of the provisions of the Indenture, each and
every Holder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.

      9.    Tax Treatment.

      The Company agrees, and by purchasing a beneficial ownership interest in
the Senior Notes each Holder of Senior Notes will be deemed to have agreed, for
United States federal income tax purposes (a) to treat the Senior Notes and the
purchase contracts as separate assets, (b) to treat the exchange of the purchase
contracts pursuant to the Exchange Offer as not being a realization event, (c)
to treat the old notes as exchanged in the Exchange Offer for the Senior Notes
and cash as a "recapitalization," (d) assuming that the Senior Notes will be
listed for

                                       13
<PAGE>
trading on the New York Stock Exchange within 30 days after the consummation of
the Exchange Offer, to treat the Senior Notes as publicly traded within the
meaning of the applicable United States Treasury Regulations, (e) to treat the
acquisition of a Corporate PIES as the acquisition of a unit consisting of a
stock purchase contract and a senior note issued by the Company and to treat the
Senior Notes as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the
"Contingent Payment Regulations") and (f) to be bound by the Company's
determination of the "comparable yield" and "projected payment schedule," within
the meaning of the Contingent Payment Regulations, with respect to the Senior
Notes. The Company has determined that the comparable yield is an annual rate of
____%, compounded quarterly. Based on the comparable yield, the projected
payment schedule per senior note is $______ for the period ending on August 15,
2005.

      10.   Amendment; Supplements; and Waivers.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders at any time by the Company and the Trustee
with the consent of the Holders of a majority in principal amount of the Senior
Notes then Outstanding. The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the Senior Notes
Outstanding, on behalf of the Holders of all Senior Notes, to waive certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Senior Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Senior Note and of any Senior Note
issued upon the registration of transfer hereof or in exchange therefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Senior Note.

      11.   Obligation Absolute and Unconditional.

      No reference herein to the Indenture and no provision of this Senior Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Senior Note at the times, place and rate, and in the coin or
currency, herein prescribed.

      12.   Severability.

      If any provision in this Senior Note is unenforceable in any jurisdiction,
then to the fullest extent permitted bylaw, (i) the other provisions of this
Senior Note shall remain in full force and effect in such jurisdiction and shall
be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision of this Senior Note in any jurisdiction shall not in any way
affect the validity or enforceability of such provision any other jurisdiction.

      13.   Governing Law.

      THIS SENIOR NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

                                       14
<PAGE>
      14.   Jurisdiction; Venue.

      The Company submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal proceedings arising
out of or relating to this Senior Note or the transactions contemplated hereby.
The parties hereto irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

      15.   Copies of the Indenture.

      The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:

            Sierra Pacific Resources
            6100 Neil Road
            Reno, Nevada  89520-3150
            Attention:  Manager of Treasury and Finance

                                       15
<PAGE>
                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

   TEN COM -              as tenants in common

   TEN ENT -              as tenants by the entireties

   JT TEN -               as joint tenants with rights of survivorship and not
                          as tenants in common

   UNIF GIFT MIN ACT -    __________________ Custodian for __________________
                             (Custodian)                        (Minor)

                          Under Uniform Gifts to Minors Act of

                          ____________________________________
                                          (State)

Additional abbreviations may also be used though not on the above list.

     _______________________________________________________________________

     FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

________________________________________________________________________________
                            (insert name of assignee)

________________________________________________________________________________
 (insert social security, taxpayer I.D. or other identifying number of assignee)

________________________________________________________________________________
                          (insert address of assignee)

the within Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing

________________________________________________________________________________
agent to transfer said Senior Note on the books of Sierra Pacific Resources,
with full power of substitution in the premises.

Dated: _______________ __, _____     ___________________________________________
                                     Signature

                                     ___________________________________________
                                     NOTICE: The signature to this assignment
                                     must correspond with the name as it appears
                                     upon the face of the within Corporate PIES
                                     Certificates in every particular, without
                                     alteration or enlargement or any change
                                     whatsoever.
<PAGE>
                                     Signature Guarantee:_______________________

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.
<PAGE>
                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]

                       SCHEDULE OF INCREASES OR DECREASES

The following increases or decreases in this Global Senior Note have been made:

<TABLE>
<CAPTION>
____________________________________________________________________________________________________________________
                                                                          Principal amount of
                           Amount of decrease    Amount of increase in       Senior Notes
                           in principal amount    principal amount of      evidenced by the         Signature of
                             of Senior Notes          Senior Notes        Global Senior Note     authorized officer
                            evidenced by the        evidenced by the        following such          of Trustee or
          Date             Global Senior Note      Global Senior Note    decrease or increase     Collateral Agent
<S>                        <C>                   <C>                     <C>                     <C>
____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________
</TABLE>
<PAGE>
                                                                       EXHIBIT B

                     NOTICE TO TRUSTEE AND COLLATERAL AGENT
                         REGARDING OPTIONAL REMARKETING

Wells Fargo Bank, N.A., as Collateral Agent
Corporate Trust
Sixth and Marquette
MAC N9303-120
Attention:  Jane Schweiger
Facsimile:  (612) 667-9825

The Bank of New York, as Indenture Trustee
Corporate Trust Division -- Corporate Finance Unit
101 Barclay Street, 8W
New York, NY 10286
Attention:  Stacey B. Poindexter
Facsimile (212) 815-5707

            Re:   Senior Notes of Sierra Pacific Resources

      Reference is made to Indenture dated as of May 1, 2000 (the "Indenture"),
between Sierra Pacific Resources (the "Company") and The Bank of New York, as
trustee (the "Trustee"). Capitalized terms used herein but not defined shall
have the meanings set forth in the Indenture Officer Certificate.

      The undersigned hereby notifies you in accordance with paragraph 19(i)(A)
of the Officers' Certificate and Section 5.7 of the Pledge Agreement that the
undersigned Holder elects to have $____________ aggregate principal amount of
Senior Notes included in the Remarketing and will deliver such Senior Notes to
_______ for that purpose. The undersigned will, upon request of the Remarketing
Agents, 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 tendered hereby.

      The undersigned hereby instructs 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 herein under "A.
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 herein under "B. 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 Senior Notes tendered hereby and that the undersigned is the record
owner of any Senior Notes tendered herewith in physical
<PAGE>
form or a participant in The Depository Trust Company ("DTC") and the beneficial
owner of any Senior 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
Indenture, the Remarketing Agreement and the Pledge Agreement.

Please print name and address of Holder:

_______________________________________
         Name

_______________________________________
Social Security or other Taxpayer
Identification Number, if any

_______________________________________
         Address

_______________________________________

        (d)   Payment Instructions

              _______________________________________

              _______________________________________

        (e)   Delivery Instructions

              _______________________________________

              _______________________________________

<PAGE>
                                                                       EXHIBIT C

                    INSTRUCTION FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT

Wells Fargo Bank, N.A., as Collateral Agent
Corporate Trust
Sixth and Marquette
MAC N9303-120
Attention:  Jane Schweiger
Facsimile:  (612) 667-9825

      Re:   Senior Notes of Sierra Pacific Resources

            Reference is made to the Pledge Agreement, dated as of ______ __,
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
meaning set forth in the Pledge Agreement.

            The undersigned hereby notifies you in accordance with 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, as permitted under Section 5.3(c) of the Purchase Contract
Agreement through the compliance with the procedures for creating Treasury PIES
set forth in Section 3.13 of the Purchase Contract Agreement on any date except
during an active Remarketing Period.

            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:____________________________<PAGE>

                                                                     EXHIBIT 4.5

================================================================================

                           PURCHASE CONTRACT AGREEMENT

                                     BETWEEN

                            SIERRA PACIFIC RESOURCES

                                       AND

                              THE BANK OF NEW YORK,

                           AS PURCHASE CONTRACT AGENT

                      DATED AS OF __________________, 2005

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
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                                                             ARTICLE I

                                                 Definitions and Other Provisions
                                                      of General Applications

Section  1.1.     Definitions....................................................................................    1
Section  1.2.     Compliance Certificates and Opinions...........................................................   13
Section  1.3.     Form of Documents Delivered to Purchase Contract Agent.........................................   13
Section  1.4.     Acts of Holders; Record Dates..................................................................   14
Section  1.5.     Notices........................................................................................   15
Section  1.6.     Notice to Holders; Waiver......................................................................   16
Section  1.7.     Effect of Headings and Table of Contents.......................................................   16
Section  1.8.     Successors and Assigns.........................................................................   16
Section  1.9.     Severability...................................................................................   17
Section 1.10.     Benefits of Agreement..........................................................................   17
Section 1.11.     Governing Law; Jurisdiction and Venue..........................................................   17
Section 1.12.     Legal Holidays.................................................................................   17
Section 1.13.     Counterparts...................................................................................   18
Section 1.14.     Inspection of Agreement........................................................................   18

                                                            ARTICLE II

                                                         Certificate Forms

Section  2.1.     Forms of Certificates Generally................................................................   18
Section  2.2.     Form of Purchase Contract Agent's Certificate of Authentication................................   19

                                                            ARTICLE III

                                                             The PIES

Section  3.1.     Amount; Form and Denominations.................................................................   19
Section  3.2.     Rights and Obligations Evidenced by the Certificates...........................................   20
Section  3.3.     Execution, Authentication, Delivery and Dating.................................................   20
Section  3.4.     Temporary Certificates.........................................................................   21
Section  3.5.     Registration; Registration of Transfer and Exchange............................................   22
Section  3.6.     Book-Entry Interests...........................................................................   23
Section  3.7.     Notices to Holders.............................................................................   24
Section  3.8.     Appointment of Successor Depositary............................................................   24
Section  3.9.     Definitive Certificates........................................................................   24
Section 3.10.     Mutilated, Destroyed, Lost and Stolen Certificates.............................................   24
Section 3.11.     Persons Deemed Owners..........................................................................   25
Section 3.12.     Cancellation...................................................................................   26
</TABLE>

                                       i

<PAGE>

<TABLE>
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Section 3.13.     Creation of Treasury PIES by Substitution of Treasury Securities...............................   26
Section 3.14.     Recreation of Corporate PIES...................................................................   28
Section 3.15.     Transfer of Collateral upon Occurrence of Termination Event....................................   29
Section 3.16.     No Consent to Assumption.......................................................................   30

                                                            ARTICLE IV

                                                         The Senior Notes

Section  4.1.     Interest Payments; Rights to Interest Preserved................................................   30
Section  4.2.     Interest Rate Reset; Reset of Other Terms......................................................   31
Section  4.3.     Notice and Voting..............................................................................   31

                                                             ARTICLE V

                                              The Purchase Contracts; The Remarketing

Section  5.1.     Purchase of Shares of Common Stock.............................................................   32
Section  5.2.     Purchase Contract Adjustment Payments..........................................................   34
Section  5.3.     Payment of Purchase Price; Remarketing.........................................................   36
Section  5.4.     Issuance of Shares of Common Stock.............................................................   37
Section  5.5.     Adjustment of Settlement Rate and Early Settlement Rate........................................   38
Section  5.6.     Notice of Adjustments and Certain Other Events.................................................   44
Section  5.7.     Termination Event; Notice......................................................................   45
Section  5.8.     Cash Settlement................................................................................   45
Section  5.9.     Early Settlement...............................................................................   48
Section 5.10.     Early Settlement Upon Merger...................................................................   50
Section 5.11.     Optional Remarketing...........................................................................   51
Section 5.12.     No Fractional Shares...........................................................................   52
Section 5.13.     Charges and Taxes..............................................................................   52

                                                            ARTICLE VI

                                                             Remedies

Section  6.1.     Unconditional Right of Holders to Receive Purchase Contract Adjustment Payments and to
                    Purchase Shares of Common Stock..............................................................   53
Section  6.2.     Restoration of Rights and Remedies.............................................................   53
Section  6.3.     Rights and Remedies Cumulative.................................................................   53
Section  6.4.     Delay or Omission Not Waiver...................................................................   53
Section  6.5.     Undertaking for Costs..........................................................................   53
Section  6.6.     Waiver of Stay or Extension Laws...............................................................   54
</TABLE>

                                       ii

<PAGE>

<TABLE>
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                                                            ARTICLE VII

                                                    The Purchase Contract Agent

Section  7.1.     Certain Duties and Responsibilities............................................................   54
Section  7.2.     Notice of Default..............................................................................   55
Section  7.3.     Certain Rights of Purchase Contract Agent......................................................   55
Section  7.4.     Not Responsible for Recitals or Issuance of PIES...............................................   57
Section  7.5.     May Hold PIES..................................................................................   57
Section  7.6.     Money Held in Custody..........................................................................   57
Section  7.7.     Compensation and Reimbursement.................................................................   58
Section  7.8.     Corporate Purchase Contract Agent Required; Eligibility........................................   58
Section  7.9.     Resignation and Removal; Appointment of Successor..............................................   59
Section 7.10.     Acceptance of Appointment by Successor.........................................................   60
Section 7.11.     Merger, Conversion, Consolidation or Succession to Business....................................   60
Section 7.12.     Preservation of Information; Communications to Holders.........................................   61
Section 7.13.     No Obligations of Purchase Contract Agent......................................................   61
Section 7.14.     Tax Compliance.................................................................................   61

                                                           ARTICLE VIII

                                                      Supplemental Agreements

Section  8.1.     Supplemental Agreements Without Consent of Holders.............................................   62
Section  8.2.     Supplemental Agreements With Consent of Holders................................................   62
Section  8.3.     Execution of Supplemental Agreements...........................................................   63
Section  8.4.     Effect of Supplemental Agreements..............................................................   64
Section  8.5.     Reference to Supplemental Agreements...........................................................   64

                                                            ARTICLE IX

                                             Merger, Consolidation Sale or Conveyance

Section  9.1.     When Company May Merge, Etc....................................................................   64
Section  9.2.     Successor Corporation Substituted..............................................................   65
Section  9.3.     Limitation.....................................................................................   65

                                                             ARTICLE X

                                                             Covenants

Section 10.1.     Performance Under Purchase Contracts...........................................................   65
Section 10.2.     Maintenance of Office or Agency................................................................   66
Section 10.3.     Company to Reserve Common Stock................................................................   66
Section 10.4.     Covenants as to Common Stock...................................................................   66
Section 10.5.     Statements of Officers of the Company as to Default............................................   67
Section 10.6.     ERISA..........................................................................................   67
</TABLE>

                                      iii

<PAGE>

<TABLE>
<CAPTION>
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                                                           EXHIBITS

EXHIBIT A         Form of Face of Corporate PIES Certificate.................................................   A-1
EXHIBIT B         Form of Face of Treasury PIES Certificate .................................................   B-1
EXHIBIT C         Notice from Holder to Purchase Contract Agent
                  (Election for Creation of Treasury PIES or Recreation of Corporate PIES)...................   C-1
EXHIBIT D         Instruction From Holder to Purchase Contract Agent
                  (Creation of Treasury PIES or Recreation of Corporate PIES)................................   D-1
EXHIBIT E         Notice from Purchase Contract Agent to Holders
                  (Transfer of Collateral upon Occurrence of a Termination Event)............................   E-1
EXHIBIT F         Notice to Settle by Cash...................................................................   F-1
EXHIBIT G         Notice from Purchase Contract Agent to Remarketing Agents, Collateral Agent, Trustee and
                  the Company (Initial, Subsequent or Final Remarketing).....................................   G-1
</TABLE>

                                       iv

<PAGE>

            PURCHASE CONTRACT AGREEMENT, dated as of ______ __, 2005, between
SIERRA PACIFIC RESOURCES, a Nevada corporation (the "Company"), and THE BANK OF
NEW YORK, a New York banking corporation, acting as purchase contract agent for
the Holders of PIES from time to time (the "Purchase Contract Agent").

                                    RECITALS

            The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the PIES.

            All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company, authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute this
Agreement a valid agreement of the Company, in accordance with its terms, have
been done.

            For and in consideration of the premises and the purchase of the
PIES by the Holders thereof, it is mutually agreed as follows:

                                   ARTICLE I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATIONS

Section 1.1 Definitions.

            For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

            (a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and nouns
and pronouns of the masculine gender include the feminine and neuter genders;

            (b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;

            (c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;

            (d) the following terms have the meanings given to them in this
Section 1.1(d):

            "Act," when used with respect to any Holder, has the meaning
specified in Section 1.4.

<PAGE>
                                                                               2

            "Active Remarketing Period" has the meaning set forth in Section 1
of the Pledge Agreement.

            "Adjusted Purchase Contract Adjustment Payment Rate" means, with
respect to any Reset Transaction, the rate per annum that is the arithmetic
average of the rates quoted by two Reference Dealers selected by the Company as
the rate at which Purchase Contract Adjustment Payments should accrue so that
the fair closing price, expressed in dollars, of a Corporate PIES immediately
after the later of (i) public announcement of such Reset Transaction or (ii)
public announcement of a change in dividend policy in connection with such Reset
Transaction will equal the average Trading Price of a Corporate PIES for the 20
Trading Days preceding the date of public announcement of such Reset
Transaction; provided that the Adjusted Purchase Contract Adjustment Payment
Rate shall not be less than 1.07% per annum.

            "Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

            "Affiliated Person" with respect to any specified Person means any
other Person that is an Affiliate of such specified Person.

            "Agreement" means this Purchase Contract Agreement as the same may
be amended, modified or supplemented from time to time in accordance with the
terms hereof.

            "Applicable Closing Price" has the meaning set forth in Section 5.1.

            "applicants" has the meaning set forth in Section 7.12(b).

            "Authorized Newspaper" means The Wall Street Journal, another daily
newspaper in the English language of general circulation in New York, New York
that is acceptable to the Remarketing Agents or, at the discretion of the
Remarketing Agents after consultation with the Company, a nationally recognized
quotation system that would be an effective medium of publicizing the event to
be publicized.

            "Bankruptcy Code" means Title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.

            "Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).

            "Board of Directors" means the board of directors of the Company or
a duly authorized committee of that board.
<PAGE>
                                                                               3

            "Board Resolution" means one or more resolutions or unanimous
written consents of the Board of Directors, a copy each of which has been
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification and delivered to the Purchase Contract Agent.

            "Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depositary as described in Section 3.6.

            "Business Day" means any day other than a Saturday or Sunday or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.

            "Cash Merger" has the meaning set forth in Section 5.10(a).

            "Cash Merger Date" has the meaning set forth in Section 5.10(a).

            "Cash Settlement" has the meaning set forth in Section 5.8(a)(i).

            "Certificate" means a Corporate PIES Certificate or a Treasury PIES
Certificate.

            "Closing Price" has the meaning set forth in Section 5.1.

            "Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.

            "Collateral" has the meaning set forth in Section 1 of the Pledge
Agreement.

            "Collateral Account" has the meaning set forth in Section 1 of the
Pledge Agreement.

            "Collateral Agent" means Wells Fargo Bank, National Association, as
Collateral Agent under the Pledge Agreement until a successor Collateral Agent
shall have become such pursuant to the applicable provisions of the Pledge
Agreement, and thereafter "Collateral Agent" shall mean the Person who is then
the Collateral Agent thereunder.

            "Collateral Substitution" means the substitution of Treasury
Securities, for a Holder's Senior Notes, pursuant to Section 3.13 of this
Agreement and Section 5.2 of the Pledge Agreement, and/or the substitution of a
Holder's Senior Notes for Treasury Securities, pursuant to Section 3.14 of this
Agreement and Section 5.3 of the Pledge Agreement, as the case may be.

            "Common Stock" means the common stock, par value $1.00 per share, of
the Company.

            "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
<PAGE>
                                                                               4

            "Constituent Person" has the meaning set forth in Section 5.5(b).

            "Corporate PIES" means the collective rights and obligations of a
Holder of a Corporate PIES Certificate issued in substantially the form set
forth as Exhibit A hereto in the Stated Amount of $50, which represents
beneficial ownership by the Holder of either (1) a 1/20th, or 5%, undivided
beneficial ownership interest in $1,000 principal amount of Senior Notes, or (2)
if substituted therefor in connection with a Successful Remarketing, the Pledged
Treasury Portfolio Interest, which, in the case of each of clauses (1) and (2),
is subject to the Pledge by the Holder pursuant to the Pledge Agreement, and the
related Purchase Contract.

            "Corporate PIES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Corporate PIES
specified on such certificate.

            "Corporate PIES Register" and "Corporate PIES Registrar" have the
respective meanings specified in Section 3.5.

            "Corporate Trust Office" means the office of the Purchase Contract
Agent at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 101
Barclay Street, 8W, New York, New York 10286, Attention: Corporate Trust
Division -- Corporate Finance Unit.

            "Coupon Rate" means the percentage rate per annum at which each
Senior Note will bear interest initially.

            "Current Market Price" has the meaning specified in Section
5.5(a)(8).

            "Depositary" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the PIES and in whose name, or in the name of a nominee of that organization,
shall be registered a Global Certificate and which shall undertake to effect
book-entry transfers and pledges of the PIES. Initially, DTC shall be the
Depositary.

            "Depositary Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Depositary
effects book-entry transfers and pledges of securities deposited with the
Depositary.

            "Dividend Yield" means, with respect to any security for any period,
the dividends paid or proposed to be paid pursuant to an announced dividend
policy on such security for such period divided by, if with respect to dividends
paid on such security, the average Closing Price of such security during such
period and, if with respect to dividends so proposed to be paid on such
security, the Closing Price of such security on the effective date of the
related Reset Transaction.

            "DTC" means The Depository Trust Company, the initial Depositary.

            "Early Settlement" has the meaning set forth in Section 5.9(a).

            "Early Settlement Amount" has the meaning set forth in Section
5.9(a).
<PAGE>
                                                                               5

            "Early Settlement Date" has the meaning set forth in Section 5.9(a).

            "Early Settlement Rate" has the meaning set forth in Section 5.9(b).

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

            "Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.

            "Expiration Date" has the meaning set forth in Section 1.4(e).

            "Expiration Time" has the meaning set forth in Section 5.5(a)(6).

            "Failed Remarketing" has the meaning set forth in Section 2(f) of
the Remarketing Agreement.

            "Final Remarketing" has the meaning set forth in Section 1 of the
Pledge Agreement.

            "Global Certificate" means a Certificate that is issued in global
form, evidencing all or part of the PIES, and is registered in the name of a
Depositary or a nominee thereof.

            "Holder" means, with respect to a PIES, the Person in whose name the
PIES evidenced by a Corporate PIES Certificate and/or a Treasury PIES
Certificate is registered in the related Corporate PIES Register and/or the
Treasury PIES Register, as the case may be; provided, however, that in
determining whether the Holders of the requisite number of Corporate PIES and/or
Treasury PIES have Acted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the PIES
remains in the form of one or more Global Certificates and if the Depositary
which is the registered holder of such Global Certificate has sent an omnibus
proxy assigning voting rights to the Depositary Participants to whose accounts
the PIES are credited on the applicable record date, the term "Holder" shall
mean such Depositary Participant acting at the direction of the Beneficial
Owners.

            "Indenture" means the Indenture, dated as of May 1, 2000, between
the Company and the Trustee (the "Original Indenture") and the Officers'
Certificate, dated as of ______________, 2005 establishing the terms and other
provisions of the Senior Notes pursuant to the Original Indenture (the
"Indenture Officers' Certificate" and together with the Original Indenture, the
"Indenture"), as the same may be amended, modified or supplemented from time to
time in accordance with the terms thereof including in connection with a
Successful Remarketing.

            "Issuer Order" or "Issuer Request" means a written request or order
signed in the name of the Company by (i) either its Chief Executive Officer, its
President, Chief Financial Officer or one of its Vice Presidents and (ii) either
its Corporate Secretary or one of its Assistant Corporate Secretaries or its
Treasurer or one of its Assistant Treasurers, and delivered to the Purchase
Contract Agent.
<PAGE>
                                                                               6

            "Merger Early Settlement" has the meaning set forth in Section 5.10.

            "Merger Early Settlement Amount" has the meaning set forth in
Section 5.10(b).

            "Merger Early Settlement Date" has the meaning set forth in Section
5.10(a)(i).

            "non-electing share" has the meaning set forth in Section 5.5(b).

            "NYSE" means the New York Stock Exchange, Inc.

            "Officers' Certificate" means a certificate signed by (i) either the
Chief Executive Officer, the President, Chief Financial Officer, or one of the
Vice Presidents and (ii) either the Corporate Secretary or one of the Assistant
Corporate Secretaries or the Treasurer or one of the Assistant Treasurers, of
the Company, and delivered to the Purchase Contract Agent.

            "Opinion of Counsel" means a written opinion of counsel, which may
be counsel for the Company (and who may be an employee of the Company), and
which shall be reasonably acceptable to the Purchase Contract Agent.

            "Outstanding PIES" means, with respect to any Corporate PIES or
Treasury PIES and as of the date of determination, all Corporate PIES or
Treasury PIES evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:

            (1) If a Termination Event has occurred, Corporate PIES and Treasury
      PIES for which the related Senior Notes, the Treasury Portfolio or
      Treasury Securities, as the case may be, have been theretofore deposited
      with the Purchase Contract Agent in trust for the Holders of such
      Corporate PIES or Treasury PIES, as the case may be;

            (2) Corporate PIES and Treasury PIES evidenced by Certificates
      theretofore cancelled by the Purchase Contract Agent or delivered to the
      Purchase Contract Agent for cancellation or deemed cancelled pursuant to
      the provisions of this Agreement; and

            (3) Corporate PIES and Treasury PIES evidenced by Certificates in
      exchange for or in lieu of which other Certificates have been
      authenticated, executed on behalf of the Holder and delivered pursuant to
      this Agreement, other than any such Certificate in respect of which there
      shall have been presented to the Purchase Contract Agent proof
      satisfactory to it that such Certificate is held by a bona fide purchaser
      in whose hands the Corporate PIES or Treasury PIES evidenced by such
      Certificate are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
number of the Corporate PIES or Treasury PIES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Corporate PIES or
Treasury PIES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding PIES, except that, in determining
whether the Purchase Contract Agent shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Corporate PIES or Treasury PIES which a Responsible Officer of the Purchase
Contract Agent knows to be so owned shall be so disregarded. Corporate PIES or
Treasury PIES so owned
<PAGE>
                                                                               7

which have been pledged in good faith may be regarded as Outstanding PIES if the
pledgee establishes to the satisfaction of the Purchase Contract Agent the
pledgee's right so to act with respect to such Corporate PIES or Treasury PIES
and that the pledgee is not the Company or any Affiliate of the Company.

            "Payment Date" means August 15, 2005 and November 15, 2005.

            "Permitted Investments" has the meaning set forth in Section 1 of
the Pledge Agreement.

            "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity of
whatever nature.

            "PIES" means a Corporate PIES, a Treasury PIES, or the collective
reference to the Corporate PIES and the Treasury PIES, as the case may be.

            "Plan" means an employee benefit plan that is subject to ERISA, a
plan or individual retirement account that is subject to Section 4975 of the
Code or any entity whose assets are considered assets of any such plan.

            "Pledge" means the pledge under the Pledge Agreement of the Senior
Notes, any Treasury Portfolio or any Treasury Securities, in each case,
constituting a part of the PIES.

            "Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact for the Holders from time to time of the PIES, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.

            "Pledged Senior Notes" has the meaning set forth in Section 1 of the
Pledge Agreement.

            "Pledged Treasury Portfolio Interest" has the meaning set forth in
Section 1 of the Pledge Agreement.

            "Pledged Treasury Securities" has the meaning set forth in Section 1
of the Pledge Agreement.

            "Predecessor Certificate" means a Predecessor Corporate PIES
Certificate or a Predecessor Treasury PIES Certificate.

            "Predecessor Corporate PIES Certificate" of any particular Corporate
PIES Certificate means every previous Corporate PIES Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Corporate PIES evidenced thereby; and, for the purposes of this definition,
any Corporate PIES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or
<PAGE>
                                                                               8

stolen Corporate PIES Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Corporate PIES Certificate.

            "Predecessor Treasury PIES Certificate" of any particular Treasury
PIES Certificate means every previous Treasury PIES Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Treasury PIES evidenced thereby; and, for the purposes of this definition,
any Treasury PIES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury PIES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Treasury PIES
Certificate.

            "Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.

            "Purchase Contract" means, with respect to any PIES, the contract
contained in this Agreement and forming a part of such PIES and obligating (i)
the Company to sell, and the Holder of such PIES to purchase, shares of Common
Stock and (ii) the Company to pay to the Holder Purchase Contract Adjustment
Payments, in each case, on the terms and subject to the conditions set forth in
Article Five.

            "Purchase Contract Adjustment Payments" means the quarterly payments
payable by the Company on the Payment Dates in respect of each Purchase
Contract, commencing on August 15, 2005 equal to (a) if a Reset Transaction has
not occurred, 1.07% per annum of the Stated Amount or (b) following the
occurrence of a Reset Transaction, the Adjusted Purchase Contract Adjustment
Payment Rate related to such Reset Transaction until any succeeding Reset
Transaction shall occur, in either case computed (i) for any full quarterly
period on the basis of a 360-day year of twelve 30-day months, (ii) for any
period shorter than a full quarterly period for which such payments are
calculated, on the basis of a 30-day month and (iii) for periods of less than a
month, the actual number of days elapsed per 30-day month.

            "Purchase Contract Agent" means the Person named as the "Purchase
Contract Agent" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "Purchase Contract Agent" shall
mean such Person.

            "Purchase Contract Settlement Date" means November 15, 2005.

            "Purchase Contract Settlement Fund" has the meaning set forth in
Section 5.4.

            "Purchase Price" has the meaning set forth in Section 5.1.

            "Purchased Shares" has the meaning set forth in Section 5.5(a)(6).

            "Record Date" for the Purchase Contract Adjustment Payments payable
on any Payment Date means the fifteenth Business Day prior to such Payment Date.

            "Reference Dealer" means a dealer engaged in the trading of
convertible securities.
<PAGE>
                                                                               9

            "Reference Price" has the meaning set forth in Section 5.1.

            "Register" means the Corporate PIES Register and the Treasury PIES
Register.

            "Registrar" means the Corporate PIES Registrar and the Treasury PIES
Registrar.

            "Remarketing" means the remarketing of the Remarketing Senior Notes
pursuant to the Remarketing Procedures.

            "Remarketing Agents" has the meaning set forth in Recitals of the
Remarketing Agreement.

            "Remarketing Agreement" means the Remarketing Agreement, dated as of
the date hereof, between the Company and the Remarketing Agents, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.

            "Remarketing Fee" has the meaning set forth in Section 2(e) of the
Remarketing Agreement.

            "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, this Agreement, the Pledge Agreement and the
Remarketing Agreement.

            "Remarketing Senior Notes" has the meaning set forth in Section
19(i)(A) of the Officers' Certificate.

            "Remarketing Settlement Date" means the date of the settlement of
any Successful Remarketing, which will be three Business Days after such
Remarketing.

            "Remarketing Value" means the sum of

            (a) if;

                  (i) the Remarketing Settlement Date occurs prior to August 15,
      2005, with respect to the originally scheduled Payment Date that would
      have occurred on August 15, 2005, such amount of Treasury Securities that
      will pay on or prior to August 14, 2005, an aggregate amount equal to the
      aggregate interest payment on the Remarketing Senior Notes from the
      Remarketing Settlement Date to, but excluding, August 15, 2005 on the
      principal amount of the Remarket Senior Note that would have been included
      in the Corporate PIES assuming no remarketing and no reset of the interest
      rate on the Senior Notes and assuming that the interest on the Senior
      Notes accrued from the Remarketing Settlement Date to, but excluding,
      August 15, 2005; and

                  (ii) the Remarketing Settlement Date occurs prior to November
      15, 2005, with respect to the originally scheduled Payment Date that would
      have occurred on November 15, 2005, such amount of Treasury Securities
      that will pay on or prior to November 14, 2005 an aggregate amount equal
      to the aggregate interest payment on the Remarketing Senior Notes from the
      Remarketing Settlement Date to, but excluding,
<PAGE>
                                                                              10

      November 15, 2005 on the principal amount of the Remarketed Senior Notes
      that would have been included in the Corporate PIES assuming no
      remarketing and no reset of the interest rate on the Senior Notes and
      assuming that interest on the Senior Notes accrued from the later of the
      Remarketing Settlement Date or August 15, 2005 to, but excluding, November
      15, 2005;

            (b) the value of such amount of Treasury securities that will pay,
      on or prior to the Purchase Contract Settlement Date, an amount of cash
      equal to $1,000 for each Remarketing Senior Notes; and

            (c) the Remarketing Fee.

            "Reorganization Event" has the meaning set forth in Section 5.5(b).

            "Reset Rate" has the meaning set forth in the Indenture Officers'
Certificate.

            "Reset Transaction" means a merger, consolidation or statutory share
exchange to which the Person that is the issuer of the shares of Common Stock
for which the Purchase Contracts are then to be settled is a party, a sale of
all or substantially all assets of such Person, a recapitalization of such
Common Stock or a distribution described in Section 5.5(a)(4) by such Person and
after the effective date of such transaction the Purchase Contracts are then to
be settled for shares of common stock of a Person (i) which had a Dividend Yield
for the four fiscal quarters immediately preceding the public announcement
thereof which was, or (ii) that announces a dividend policy prior to the
effective date thereof which policy, if implemented, would result in a Dividend
Yield on such shares of Common Stock for the next four fiscal quarters which
would be, more than 250 basis points higher than the Dividend Yield on the
shares of Common Stock for which the Purchase Contracts are to be settled prior
to such effective date for the four fiscal quarters immediately preceding such
public announcement.

            "Responsible Officer," means, when used with respect to the Agent,
any officer within the Corporate Trust Division -- Corporate Finance Unit of the
Purchase Contract Agent (or any successor unit or department of the Agent)
located at the Corporate Trust Office of the Purchase Contract Agent who has
direct responsibility for the administration of this Agreement.

            "Securities Intermediary" means Wells Fargo Bank, National
Association, as Securities Intermediary under the Pledge Agreement until a
successor Securities Intermediary shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter "Securities
Intermediary" shall mean such successor.

            "Senior Notes" means the 7.93% Senior Notes due 2007 to be issued by
the Company under the Indenture, each having a minimum denomination of $1,000
and bearing interest accruing from May 15, 2005, payable on the Payment Dates,
initially at the Coupon Rate to, but excluding, the Remarketing Settlement Date
or the Purchase Contract Settlement Date, as applicable, and, thereafter, at the
Reset Rate, in each case pursuant to the Indenture. Any reference herein to "one
Senior Note," "a Senior Note" or "the Senior Note" or any phrase herein having a
similar meaning shall be a reference to a Senior Note in the principal amount of
$1,000.
<PAGE>
                                                                              11

            "Separated Senior Notes" has the meaning set forth in Section 1 of
the Pledge Agreement.

            "Settlement Rate" has the meaning specified in Section 5.1.

            "Stated Amount" means, with respect to any one PIES, $50 in cash.

            "Stated Maturity" means, with respect to the Senior Notes, November
15, 2007.

            "Successful Remarketing" has the meaning specified in Section 2(e)
of the Remarketing Agreement.

            "Termination Date" means the date, if any, on which a Termination
Event occurs.

            "Termination Event" means the occurrence of any of the following
events:

            (1) at any time on or prior to the Purchase Contract Settlement
      Date, a judgment, decree or court order shall have been entered granting
      relief with respect to the Company under the Bankruptcy Code or any other
      similar applicable Federal or state law, adjudicating the Company to be
      insolvent, or approving as properly filed a petition seeking
      reorganization or liquidation of the Company, and, unless such judgment,
      decree or order shall have been entered within 60 days prior to the
      Purchase Contract Settlement Date, such decree or order shall have
      continued undischarged and unstayed for a period of 60 days;

            (2) a judgment, decree or court order for the appointment of a
      receiver or liquidator or trustee or assignee in bankruptcy or insolvency
      of the Company or of its property, or for the winding up or liquidation of
      its affairs, shall have been entered, and, unless such judgment, decree or
      order shall have been entered within 60 days prior to the Purchase
      Contract Settlement Date, such judgment, decree or order shall have
      continued undischarged and unstayed for a period of 60 days; or

            (3) at any time on or prior to the Purchase Contract Settlement
      Date, the Company shall file a petition for relief under the Bankruptcy
      Code, or shall consent to the filing of a bankruptcy proceeding against
      it, or shall file a petition or answer or consent seeking reorganization
      or liquidation of the Company under the Bankruptcy Code or any other
      similar applicable Federal or state law, or shall consent to the filing of
      any such petition, or shall consent to the appointment of a receiver or
      liquidator or trustee or assignee in bankruptcy or insolvency of it or of
      its property, or shall make an assignment for the benefit of its
      creditors, or shall admit in writing its inability to pay its debts
      generally as they become due.

            "Threshold Appreciation Price" has the meaning set forth in Section
5.1.

            "Three-Day Remarketing Period" has the meaning set forth in Section
1 of the Pledge Agreement.
<PAGE>
                                                                              12

            "TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation, and the rules and regulations promulgated
thereunder.

            "Trading Day" has the meaning set forth in Section 5.1.

            "Trading Price" of a security on any date of determination means:

            (1) the closing sale price (or, if no closing price is reported, the
      last reported sale price) of a security (regular way) on the NYSE on such
      date;

            (2) if such security is not listed for trading on the NYSE on any
      such date, the closing sale price as reported in the composite
      transactions for the principal United States securities exchange on which
      such security is so listed;

            (3) if such security is not so listed on a United States national or
      regional securities exchange, the closing sale price as reported by the
      NASDAQ Stock Market;

            (4) if such security is not so reported, the price quoted by
      Interactive Data Corporation for such security or, if Interactive Data
      Corporation is not quoting such price, a similar quotation service
      selected by the Company;

            (5) if such security is not so quoted, the average of the mid-point
      of the last bid and ask prices for such security from at least two dealers
      recognized as market-makers for such security; or

            (6) if such security is not so quoted, the average of the last bid
      and ask prices for such security from a Reference Dealer.

            "Transfer" has the meaning specified in Section 1 of the Pledge
Agreement.

            "Treasury PIES" means, following the substitution of Treasury
Securities for Senior Notes as collateral to secure a Holder's obligations under
a Purchase Contract, the collective rights and obligations of a Holder of a
Treasury PIES Certificate in respect of such Treasury Securities, subject to the
Pledge thereof, and the related Purchase Contract.

            "Treasury PIES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Treasury PIES
specified on such certificate.

            "Treasury PIES Register" and "Treasury PIES Registrar" have the
respective meanings set forth in Section 3.5.

            "Treasury Portfolio" has the meaning specified in Section 2(e) of
the Remarketing Agreement.

            "Treasury Portfolio Interest" has the meaning specified in Section
2(e) of the Remarketing Agreement.

            "Treasury Portfolio Return" has the meaning specified in Section
4.1.
<PAGE>
                                                                              13

            "Treasury Security" means a zero-coupon U.S. Treasury Security that
has a principal amount at maturity of $1,000 and which matures on or prior to
the Business Day prior to the Purchase Contract Settlement Date or a Payment
Date, as the case may be.

            "Trustee" means The Bank of New York, a New York corporation, as
trustee under the Indenture, or any successor thereto.

Section 1.2. Compliance Certificates and Opinions.

            Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take any
action in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.

            Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than pursuant to
Section 10.5) shall include:

            (1) a statement that each individual signing such certificate or
      opinion has read such covenant or condition and the definitions herein
      relating thereto;

            (2) a brief statement as to the nature and scope of the examination
      or investigation upon which the statements or opinions contained in such
      certificate or opinion are based;

            (3) a statement that, in the opinion of each such individual, he or
      she has made such examination or investigation as is necessary to enable
      such individual to express an informed opinion as to whether or not such
      covenant or condition has been complied with; and

            (4) a statement as to whether, in the opinion of each such
      individual, such condition or covenant has been complied with.

Section 1.3. Form of Documents Delivered to Purchase Contract Agent.

            In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
<PAGE>
                                                                              14

            Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

            Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.

Section 1.4. Acts of Holders; Record Dates.

            (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Purchase Contract Agent and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 7.1) conclusive in favor of
the Purchase Contract Agent and the Company, if made in the manner provided in
this Section.

            (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase Contract
Agent deems sufficient.

            (c) The ownership of PIES shall be proved by the Corporate PIES
Register or the Treasury PIES Register, as the case may be.

            (d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Purchase
Contract Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such Certificate.

            (e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding PIES entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of PIES. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Corporate PIES and the Outstanding Treasury
<PAGE>
                                                                              15

PIES, as the case may be, on such record date, and no other Holders, shall be
entitled to take the relevant action with respect to the Corporate PIES or the
Treasury PIES, as the case may be, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date (as defined
below) by Holders of the requisite number of Outstanding PIES on such record
date. Nothing contained in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and be of no effect), and nothing contained in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite number of
Outstanding PIES on the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Company, at its own expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Purchase Contract Agent in writing
and to each Holder of PIES in the manner set forth in Section 1.6.

            With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Purchase Contract Agent in writing, and to each Holder of PIES
in the manner set forth in Section 1.6, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record date
set pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

Section 1.5. Notices.

            Any notice or communication is duly given if in writing and
delivered in Person or mailed by first-class mail (registered or certified,
return receipt requested), telecopier (with receipt confirmed) or overnight air
courier guaranteeing next day delivery, to the others' address; provided that
notice shall be deemed given to the Purchase Contract Agent and the Trustee, as
the case may be, only upon receipt thereof:

                  If to the Company:

                  Sierra Pacific Resources
                  6100 Neil Road
                  P.O. Box 30150
                  Reno, Nevada  89520-0400
                  Telecopier No.: (775) 834-5643
                  Attention: Manager of Finance and Treasury

                  If to the Purchase Contract Agent:

                  The Bank of New York
                  101 Barclay Street, Floor 8W
<PAGE>
                                                                              16

                  New York, New York  10286
                  Telecopier No.: (212) 815-5707
                  Attention: Corporate Trust Division -- Corporate Finance Unit

                  If to the Collateral Agent and Securities Intermediary:

                  Wells Fargo Bank, National Association
                  Sixth and Marquette
                  MAC N9303-120
                  Minneapolis, Minnesota  55479
                  Telecopier No.: (617) 667-9825
                  Attention: Jane Schweiger

                  If to the Trustee:

                  The Bank of New York
                  101 Barclay Street, Floor 8W
                  New York, New York  10286
                  Telecopier No.: (212) 815-5707
                  Attention: Corporate Trust Division -- Corporate Finance Unit

Section 1.6. Notice to Holders; Waiver.

            Where this Agreement provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at its address as it appears in the applicable Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Agreement provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Purchase Contract Agent, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.

            In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Purchase
Contract Agent shall constitute a sufficient notification for every purpose
hereunder.

Section 1.7. Effect of Headings and Table of Contents.

            The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.

Section 1.8. Successors and Assigns.
<PAGE>
                                                                              17

            All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.

Section 1.9. Severability.

            If any provision in this Agreement is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions of this Agreement shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision of this Agreement in any
jurisdiction shall not in any way affect the validity or enforceability of such
provision in any other jurisdiction.

Section 1.10. Benefits of Agreement.

            Nothing contained in this Agreement or in the PIES, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the PIES evidenced by
their Certificates by their acceptance of delivery of such Certificates.

Section 1.11. Governing Law; Jurisdiction and Venue.

            This Agreement and the PIES shall be governed by, and construed in
accordance with, the laws of the State of New York.

            The Company, 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 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 1.12. Legal Holidays.

            In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement, the Corporate PIES
Certificates or the Treasury PIES Certificates) payments by or owed from the
Company contemplated by this Agreement shall not be made on such date, but shall
be made on the next succeeding Business Day with the same force and effect as if
made on such Payment Date, provided that no interest shall accrue or be payable
by the Company or any Holder for the period from and after any such Payment
Date, except that, if such next succeeding Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date.
<PAGE>
                                                                              18

            In any case where the Purchase Contract Settlement Date shall not be
a Business Day, notwithstanding any other provision of this Agreement, the
Corporate PIES Certificates or the Treasury PIES Certificates, Purchase
Contracts shall not be settled on such date, but the Purchase Contracts shall be
settled on the immediately following Business Day with the same force and effect
as if performed on the Purchase Contract Settlement Date.

Section 1.13. Counterparts.

            This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.

Section 1.14. Inspection of Agreement.

            A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder or Beneficial Owner.

                                   ARTICLE II

                                CERTIFICATE FORMS

Section 2.1. Forms of Certificates Generally.

            The Corporate PIES Certificates (including the form of Purchase
Contract forming part of the Corporate PIES evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate PIES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Corporate PIES Certificates, as evidenced by their
execution of the Corporate PIES Certificates.

            The definitive Corporate PIES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Corporate PIES evidenced by such Corporate PIES Certificates, consistent with
the provisions of this Agreement, as evidenced by their execution thereof.

            The Treasury PIES Certificates (including the form of Purchase
Contracts forming part of the Treasury PIES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury PIES may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Treasury PIES Certificates, as evidenced by their
execution of the Treasury PIES Certificates.
<PAGE>
                                                                              19

            The definitive Treasury PIES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Treasury PIES evidenced by such Treasury PIES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.

            Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:

            "This Certificate is a Global Certificate within the meaning of the
      Purchase Contract Agreement hereinafter referred to and is registered in
      the name of The Depository Trust Company, a New York corporation (the
      "Depositary"), or a nominee of the Depositary. This Certificate is
      exchangeable for certificates registered in the name of a person other
      than the Depositary or its nominee only in the limited circumstances
      described in the Purchase Contract Agreement and no transfer of this
      Certificate (other than a transfer of this Certificate as a whole by the
      Depositary to a nominee of the Depositary or by a nominee of the
      Depositary to the Depositary or another nominee of the Depositary) may be
      registered except in limited circumstances.

            Unless this Certificate is presented by an authorized representative
      of the Depositary to Sierra Pacific Resources or its agent for
      registration of transfer, exchange or payment, and any certificate issued
      is registered in the name of Cede & Co. or such other name as is requested
      by an authorized representative of the Depositary (and any payment hereon
      is made to Cede & Co. or to such other entity as is requested by an
      authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR
      OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
      since the registered owner hereof, Cede & Co., has an interest herein."

Section 2.2. Form of Purchase Contract Agent's Certificate of Authentication.

            The form of the Purchase Contract Agent's certificate of
authentication of the Corporate PIES shall be in substantially the form set
forth on the form of the Corporate PIES Certificates.

            The form of the Purchase Contract Agent's certificate of
authentication of the Treasury PIES shall be in substantially the form set forth
on the form of the Treasury PIES Certificates.

                                  ARTICLE III

                                    THE PIES

Section 3.1. Amount; Form and Denominations.

            The aggregate number of PIES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 4,704,350, except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Sections 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 5.10.
<PAGE>
                                                                              20

            The Certificates shall be issuable only in registered form and only
in denominations of a single Corporate PIES or Treasury PIES and any integral
multiple thereof.

Section 3.2. Rights and Obligations Evidenced by the Certificates.

            Each Corporate PIES Certificate shall evidence the number of
Corporate PIES specified therein, with each such Corporate PIES representing (1)
the ownership by the Holder thereof of (a) a 1/20th, or 5%, undivided beneficial
interest in a Senior Note with a principal amount at maturity of $1,000 or (b)
if substituted therefor, the Pledged Treasury Portfolio Interest, in either
case, subject to the Pledge of such Senior Note or such Pledged Treasury
Portfolio Interest, as the case may be, by such Holder pursuant to the Pledge
Agreement, and (2) the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Purchase Contract Agent as
attorney-in-fact for, and on behalf of, the Holder of each Corporate PIES shall
pledge, pursuant to the Pledge Agreement, the Senior Note or, if substituted
therefor, the Treasury Portfolio Interest, forming a part of such Corporate
PIES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title and interest of such Holder in such Senior Note or
such Treasury Portfolio Interest, as the case may be, for the benefit of the
Company, to secure the obligation of the Holder under each Purchase Contract to
purchase shares of Common Stock pursuant to the Purchase Contract.

            Upon the formation of Treasury PIES pursuant to Section 3.13, each
Treasury PIES Certificate shall evidence the number of Treasury PIES specified
therein, with each such Treasury PIES representing (1) the ownership by the
Holder thereof of a 1/20th undivided beneficial interest in a Treasury Security
with a principal amount equal to $1,000, subject to the Pledge of such Treasury
Security by such Holder pursuant to the Pledge Agreement, and (2) the rights and
obligations of the Holder thereof and the Company under one Purchase Contract.
The Purchase Contract Agent as attorney-in-fact for, and on behalf of, the
Holder of each Treasury PIES shall pledge, pursuant to the Pledge Agreement, the
Treasury Security or Treasury Securities forming a part of such Treasury PIES,
to the Collateral Agent and grant to the Collateral Agent a security interest in
the right, title and interest of such Holder in such Treasury Security or
Treasury Securities for the benefit of the Company, to secure the obligation of
the Holder under each Purchase Contract to purchase shares of Common Stock
pursuant to this Agreement and the related Purchase Contract.

            Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contract shall not entitle the Holder of a Corporate
PIES Certificate or a Treasury PIES Certificate to any of the rights of a holder
of shares of Common Stock, including, without limitation, the right to vote or
receive any dividends or other payments or to consent or to receive notice as a
shareholder in respect of the meetings of shareholders or for the election of
directors of the Company or for any other matter, or any other rights whatsoever
as a shareholder of the Company.

Section 3.3. Execution, Authentication, Delivery and Dating.

            Subject to the provisions of Sections 3.1, 3.13 and 3.14 hereof,
upon the execution and delivery of this Agreement, and at any time and from time
to time thereafter, the Company may deliver Certificates executed by the Company
to the Purchase Contract Agent for
<PAGE>
                                                                              21

authentication, execution on behalf of the Holders and delivery, together with
its Issuer Order for authentication of such Certificates, and the Purchase
Contract Agent in accordance with such Issuer Order shall authenticate, execute
on behalf of the Holders and deliver such Certificates.

            The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President, Chief Financial Officer, one of its Vice
Presidents, Corporate Secretary or Treasurer. The signature of any of these
officers on the Certificates may be manual or facsimile.

            Certificates bearing the manual or facsimile signatures of an
individual who was at any time the proper officer of the Company shall bind the
Company, notwithstanding that such individual has ceased to hold such office
prior to the authentication and delivery of such Certificates or did not hold
such office at the date of such Certificates.

            No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized officer of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized officer of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contract or Purchase Contracts
evidenced by such Certificate.

            Each Certificate shall be dated the date of its authentication.

            No Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized officer of the Purchase Contract Agent by
manual signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.

Section 3.4. Temporary Certificates.

            Pending the preparation of definitive Certificates, the Company
shall execute and deliver to the Purchase Contract Agent, and the Purchase
Contract Agent shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary Certificates which
are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the
case may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Corporate PIES or Treasury PIES are or may be listed, or as may, consistently
herewith, be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the Certificates.

            If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holder, and deliver
<PAGE>
                                                                              22

in exchange therefor, one or more definitive Certificates of like tenor and
denominations and evidencing a like aggregate number of Corporate PIES or
Treasury PIES, as the case may be, as the temporary Certificate or Certificates
so surrendered. Until so exchanged, the temporary Certificates shall in all
respects evidence the same benefits and the same obligations with respect to the
Corporate PIES or Treasury PIES, as the case may be, evidenced thereby as
definitive Certificates.

Section 3.5. Registration; Registration of Transfer and Exchange.

            The Purchase Contract Agent shall keep at the Corporate Trust Office
a register (the "Corporate PIES Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Corporate PIES Certificates and of transfers of Corporate
PIES Certificates (the Purchase Contract Agent, in such capacity, the "Corporate
PIES Registrar") and a register (the "Treasury PIES Register") in which, subject
to such reasonable regulations as it may prescribe, the Purchase Contract Agent
shall provide for the registration of the Treasury PIES Certificates and
transfers of Treasury PIES Certificates (the Purchase Contract Agent, in such
capacity, the "Treasury PIES Registrar").

            Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the designated transferee or transferees, and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of any authorized denominations, like tenor, and evidencing a like
aggregate number of Corporate PIES or Treasury PIES, as the case may be.

            At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Corporate PIES or Treasury PIES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.

            All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same aggregate
number of Corporate PIES or Treasury PIES, as the case may be, and be entitled
to the same benefits and subject to the same obligations, under this Agreement
as the Corporate PIES or Treasury PIES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.

            Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Purchase Contract Agent)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Purchase Contract Agent duly executed, by
the Holder thereof or its attorney duly authorized in writing.

            No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the
<PAGE>
                                                                              23

Holder of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Certificates, other than any exchanges pursuant to Sections 3.4, 3.6 and 8.5 not
involving any transfer.

            Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earlier of the Purchase Contract
Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Purchase Contract Agent shall:

            (1) if the Purchase Contract Settlement Date has occurred, deliver
      the shares of Common Stock issuable in respect of the Purchase Contracts
      forming a part of the PIES evidenced by such other Certificate; or

            (2) if a Termination Event shall have occurred prior to the Purchase
      Contract Settlement Date, transfer the Senior Notes, the Treasury
      Portfolio or the Treasury Securities, as the case may be, evidenced
      thereby,

in each case subject to the applicable conditions and in accordance with the
applicable provisions of Article Five hereof.

Section 3.6. Book-Entry Interests.

            The Certificates, on original issuance, will be issued in the form
of one or more fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. Such Global
Certificate shall initially be registered on the books and records of the
Company in the name of Cede & Co., the nominee of the Depositary, and no
Beneficial Owner will receive a definitive Certificate representing such
Beneficial Owner's interest in such Global Certificate, except as provided in
Section 3.9. The Purchase Contract Agent shall enter into an agreement with the
Depositary if so requested by the Company. Unless and until definitive, fully
registered Certificates have been issued to Beneficial Owners pursuant to
Section 3.9:

            (1) the provisions of this Section 3.6 shall be in full force and
      effect;

            (2) the Company shall be entitled to deal with the Depositary for
      all purposes of this Agreement (including making Purchase Contract
      Adjustment Payments and receiving approvals, votes or consents hereunder)
      as the Holder of the PIES and the sole holder of the Global Certificates
      and shall have no obligation to the Beneficial Owners;

            (3) to the extent that the provisions of this Section 3.6 conflict
      with any other provisions of this Agreement, the provisions of this
      Section 3.6 shall control; and
<PAGE>
                                                                              24

            (4) the rights of the Beneficial Owners shall be exercised only
      through the Depositary and shall be limited to those established by law
      and agreements between such Beneficial Owners and the Depositary and/or
      the Depositary Participants.

Section 3.7. Notices to Holders.

            Whenever a notice or other communication to the Holders is required
to be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any PIES
registered in the name of a Depositary or the nominee of a Depositary, the
Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.

Section 3.8. Appointment of Successor Depositary.

            If any Depositary elects to discontinue its services as securities
depositary with respect to the PIES or ceases to be eligible as a "depositary"
under the Exchange Act, the Company may, in its sole discretion, appoint a
successor Depositary with respect to the PIES.

Section 3.9. Definitive Certificates.

            If (a) the Depositary is at any time unwilling, unable or ineligible
to continue as a "clearing agency" registered under the Exchange Act and a
successor Depositary is not appointed by the Company pursuant to Section 3.8
within 90 days of the date the Company and the Purchase Contract Agent is so
informed in writing thereof, (b) the Company executes and delivers to the
Purchase Contract Agent a Company Order (as defined in the Indenture) to the
effect that the Global Certificates shall be exchangeable for Definitive
Certificates or (c) a default by the Company in respect of its obligations under
one or more Purchase Contracts has occurred and is continuing, then upon
surrender of the Global Certificates representing the PIES by the Depositary,
accompanied by registration instructions, the Company shall cause definitive
Certificates to be delivered to Beneficial Owners in accordance with the
instructions of the Depositary. The Company and the Purchase Contract Agent
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.

Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.

            If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent, and
the Purchase Contract Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor, a new Certificate, evidencing the same number
of Corporate PIES or Treasury PIES, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.

            If there shall be delivered to the Company and the Purchase Contract
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity as may be required by them
to hold each of them and any agent of any of them harmless, then, in the absence
of notice to the Company or to a Responsible Officer of the Purchase Contract
Agent that such Certificate has been acquired by a bona fide purchaser, the
Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract
<PAGE>
                                                                              25

Agent shall authenticate, execute on behalf of the Holder, and deliver to the
Holder, in lieu of any such destroyed, lost or stolen Certificate, a new
Certificate, evidencing the same number of Corporate PIES or Treasury PIES, as
the case may be, and bearing a Certificate number not contemporaneously
outstanding.

            Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earlier of the Purchase Contract Settlement Date or
the Termination Date. In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Purchase Contract Agent shall:

            (1) if the Purchase Contract Settlement Date has occurred, deliver
      the shares of Common Stock issuable in respect of the Purchase Contracts
      forming a part of the PIES evidenced by such Certificate; or

            (2) if a Termination Event shall have occurred prior to the Purchase
      Contract Settlement Date, transfer the Senior Notes, the Treasury
      Portfolio or the Treasury Securities, as the case may be, evidenced
      thereby,

in each case subject to the applicable conditions and in accordance with the
applicable provisions of Article Five hereof.

            Upon the issuance of any new Certificate under this Section, the
Company and the Purchase Contract Agent may require the payment by the Holder of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Purchase Contract Agent) connected therewith.

            Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the PIES
evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and
the PIES evidenced thereby) shall be at any time enforceable by anyone, and
shall be entitled to all the benefits and be subject to all the obligations of
this Agreement equally and proportionately with any and all other Certificates
delivered hereunder.

            The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates.

Section 3.11. Persons Deemed Owners.

            Prior to due presentment of a Certificate for registration of
transfer, the Company and the Purchase Contract Agent, and any agent of the
Company or the Purchase Contract Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Corporate PIES or Treasury PIES
evidenced thereby, for the purpose of receiving interest payments on the Senior
Notes, receiving Purchase Contract Adjustment Payments, performance of the
Purchase Contracts and for all other purposes whatsoever, whether or not any
interest payments on the
<PAGE>
                                                                              26

Senior Notes or the Purchase Contract Adjustment Payments payable in respect of
the Purchase Contracts constituting a part of the Corporate PIES or Treasury
PIES evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Purchase Contract Agent, nor any agent
of the Company or the Purchase Contract Agent, shall be affected by notice to
the contrary.

            Notwithstanding the foregoing, with respect to any Global
Certificate, nothing contained herein shall prevent the Company, the Purchase
Contract Agent or any agent of the Company or the Purchase Contract Agent, from
giving effect to any written certification, proxy or other authorization
furnished by any Depositary (or its nominee), as a Holder, with respect to such
Global Certificate or impair, as between such Depositary and owners of
beneficial interests in such Global Certificate, the operation of customary
practices governing the exercise of rights of such Depositary (or its nominee)
as Holder of such Global Certificate.

Section 3.12. Cancellation.

            All Certificates surrendered for delivery of shares of Common Stock
on or after the Purchase Contract Settlement Date, upon the transfer of Senior
Notes, the Treasury Portfolio or Treasury Securities, as the case may be, after
the occurrence of a Termination Event or pursuant to an Early Settlement, or a
Collateral Substitution or the recreation of Corporate PIES or upon the
registration of a transfer or exchange of a PIES, shall, if surrendered to any
Person other than the Purchase Contract Agent, be delivered to the Purchase
Contract Agent and, if not already cancelled, shall be promptly cancelled by it.
The Company may at any time deliver to the Purchase Contract Agent for
cancellation any Certificates previously authenticated, executed and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the
Purchase Contract Agent. No Certificates shall be authenticated, executed on
behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Purchase
Contract Agent shall be disposed of by the Purchase Contract Agent in accordance
with its customary procedures.

            If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.

Section 3.13. Creation of Treasury PIES by Substitution of Treasury Securities.

            A Holder may separate the Senior Notes from the related Purchase
Contracts in respect of such Holder's Corporate PIES by substituting Treasury
Securities or security entitlements thereto for such Senior Notes, pursuant to
the Pledge Agreement, in an aggregate principal amount equal to the aggregate
principal amount of such Senior Notes, at any time from and after the date of
this Agreement until 5:00 p.m. (New York City time) on any such date except
during an Active Remarketing Period by:

            (1) providing notice to the Purchase Contract Agent, substantially
      in the form of Exhibit C hereto, of such Holder's intention to create
      Treasury PIES;
<PAGE>
                                                                              27

            (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 the Pledge
      Agreement and instruct the Collateral Agent to hold such Treasury Security
      as Collateral under the Pledge 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 hereto, 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 relating to such Corporate
      PIES, whereupon the Purchase Contract Agent shall promptly give such
      instruction to the Collateral Agent, substantially in the form of Exhibit
      A to the Pledge Agreement; 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.

            The Holders' right to create Treasury PIES as set forth in this
Section and the limit of the preceding sentence shall in no way limit the
ability of the Purchase Contract Agent, the Collateral Agent, the Securities
Intermediary or the Remarketing Agents to substitute the Treasury Portfolio for
the Senior Notes then comprising a part of the Corporate PIES upon a Successful
Remarketing (other than the Senior Notes of Holders of Corporate PIES that have
elected not to participate in the Remarketing).

            Upon receipt of the Treasury Securities described in clause (2)
above and the instruction described in clause (1) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent shall, under the Pledge
Agreement, cause the Securities Intermediary to effect the release of such
Senior Notes from the Pledge to the Purchase Contract Agent, free and clear of
the Company's security interest therein, and the transfer of such Senior Notes
to the Purchase Contract Agent on behalf of the Holder thereof. Upon receipt
thereof, the Purchase Contract Agent shall promptly:

            (i) cancel the related Corporate PIES;

            (ii) transfer the applicable aggregate principal amount of Senior
Notes to the Holder; and

            (iii) authenticate, execute on behalf of such Holder and deliver a
Treasury PIES Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Corporate PIES.
<PAGE>
                                                                              28

            Holders who elect to separate the Senior Notes from the related
Purchase Contracts and to substitute Treasury Securities for such Senior Notes
shall be responsible for any fees or expenses payable to the Collateral Agent
for its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.

            In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Corporate PIES or
fails to deliver Corporate PIES Certificates to the Purchase Contract Agent
after depositing Treasury Securities with the Collateral Agent, then the Senior
Notes or Treasury Portfolio Interest, as the case may be, constituting a part of
such Corporate PIES, and any interest payments on such Senior Notes or the
Treasury Portfolio Interest, as the case may be, shall be held in the name of
the Purchase Contract Agent or its nominee in trust for the benefit of such
Holder, until such Corporate PIES are so transferred or the Corporate PIES
Certificates are so delivered, as the case may be, or, with respect to the
Corporate PIES Certificates, such Holder provides evidence satisfactory to the
Company and the Purchase Contract Agent that such Corporate PIES Certificates
have been destroyed, lost or stolen, together with any indemnity that may be
required by the Purchase Contract Agent and the Company.

            Except as described in this Sections 3.13 and 5.3, for so long as
the Purchase Contract relating to a Corporate PIES remains in effect, such
Corporate PIES shall not be separable into its constituent parts, and the rights
and obligations of the Holder in respect of the Senior Note or the Treasury
Portfolio Interest, as the case may be, and the Purchase Contract comprising
such Corporate PIES may be acquired, and may be transferred and exchanged, only
as a Corporate PIES.

Section 3.14. Recreation of Corporate PIES.

            A Holder of a Treasury PIES may recreate Corporate PIES at any time
until 5:00 p.m. (New York City time) on any such date except during an Active
Remarketing Period by:

            (1) providing notice to the Purchase Contract Agent, substantially
      in the form of Exhibit C hereto, of such Holder's intention to create
      Corporate PIES;

            (2) for each Treasury PIES such Holder wishes to substitute,
      transferring $1,000 principal amount of Senior Notes to the Securities
      Intermediary which shall then (y) deposit such Senior Notes in the
      Collateral Account under the Pledge Agreement and instruct the Collateral
      Agent to hold such Senior Notes as Collateral and (z) instruct the
      Collateral Agent to release to such Holder the 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 hereto, (i) stating that the Holder
      has transferred the relevant amount of Senior Notes to the Securities
      Intermediary and (ii) requesting that the Purchase Contract Agent instruct
      the Collateral Agent to release the Treasury Securities relating to such
      Treasury PIES, whereupon the Purchase Contract Agent shall promptly give
      such instruction to the Collateral Agent, substantially in the form of
      Exhibit C to the Pledge Agreement; and
<PAGE>
                                                                              29

            (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 only in
integral multiples of 20 Treasury PIES for 20 Corporate PIES. Under no
circumstance may a Holder of Treasury PIES recreate Corporate PIES during an
Active Remarketing Period.

            Upon receipt of the Senior Notes described in clause (1) above and
the instruction described in clause (2) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent shall cause the Securities
Intermediary to effect the release of such Treasury Securities from the Pledge,
free and clear of the Company's security interest therein, and the transfer of
such Treasury Securities to the Holder thereof. Upon receipt thereof, the
Purchase Contract Agent shall promptly:

            (i) cancel the related Treasury PIES; and

            (ii) authenticate, execute on behalf of such Holder and deliver a
Corporate PIES Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Treasury PIES.

            Holders who elect to recreate Corporate PIES shall be responsible
for any fees or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the Company shall not be
responsible for any such fees or expenses.

            Except as provided in this Section 3.14, for so long as the Purchase
Contract relating to a Treasury PIES remains in effect, such Treasury PIES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Treasury PIES in respect of the 1/20 of a Treasury Security
and the Purchase Contract comprising such Treasury PIES may be acquired, and may
be transferred and exchanged, only as a Treasury PIES.

Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.

            Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of Senior Notes, Treasury Portfolio Interest or Treasury
Securities, as the case may be, relating to the Corporate PIES and the Treasury
PIES, as the case may be, pursuant to the terms of the Pledge Agreement, the
Purchase Contract Agent shall request transfer instructions with respect to such
Senior Notes, Treasury Portfolio Interest or Treasury Securities, as the case
may be, from each Holder by written request, substantially in the form of
Exhibit E hereto, mailed to such Holder at its address as it appears in the
Corporate PIES Register or the Treasury PIES Register, as the case may be.

            Upon book-entry transfer of the Corporate PIES or Treasury PIES or
delivery of a Corporate PIES Certificate or Treasury PIES Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase Contract
Agent shall transfer such Senior Notes, Treasury Portfolio Interest or Treasury
Securities, as the case may be, relating to such Corporate PIES or Treasury
PIES, as the case may be, to such Holder by book-entry transfer, or other
appropriate procedures, in accordance with such instructions. In the event a
Holder of Corporate PIES or Treasury PIES fails to effect such transfer or
delivery, such Senior Notes, Treasury
<PAGE>
                                                                              30

Portfolio Interest or Treasury Securities, as the case may be, relating to such
Corporate PIES or Treasury PIES, as the case may be, and any interest thereon,
shall be held in the name of the Purchase Contract Agent or its nominee in trust
for the benefit of such Holder, until the earlier of:

            (1) such Corporate PIES or Treasury PIES are transferred or the
      Corporate PIES Certificate or Treasury PIES Certificate is surrendered or
      such Holder provides satisfactory evidence that such Corporate PIES
      Certificate or Treasury PIES Certificate has been destroyed, lost or
      stolen, together with any indemnity that may be required by the Purchase
      Contract Agent and the Company; and

            (2) the expiration of the time period specified in the abandoned
      property laws of the relevant State.

Section 3.16. No Consent to Assumption.

            Each Holder of a PIES, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or federal law providing for reorganization or
liquidation.

                                   ARTICLE IV

                                THE SENIOR NOTES

Section 4.1. Interest Payments; Rights to Interest Preserved.

            Each Corporate PIES issued hereunder shall consist of the beneficial
ownership by the Holder of a 1/20th, or 5%, undivided beneficial interest in a
Senior Note issued pursuant to the Indenture or, if the Corporate PIES shall
have been remarketed by the Remarketing Agents pursuant to the Remarketing
Agreement, the Treasury Portfolio Interest, in each case, subject to the Pledge
thereof by such Holder under the Pledge Agreement.

            Subject to receipt thereof by the Purchase Contract Agent from the
Collateral Agent as provided by the terms of the Pledge Agreement, (1) an
interest payment on any Senior Note which is paid on any Payment Date or (2) the
portion of the proceeds of a Treasury Portfolio Interest equal to (a) the
interest payable on a Senior Note on the Purchase Contract Settlement Date or
(b) following a Successful Remarketing, if the Remarketing Settlement Date is
not also a Payment Date, the interest payable on a Senior Note from the most
recent Payment Date to, but excluding, such Remarketing Settlement Date payable
on the Payment Date next following the Remarketing Settlement Date (such portion
of proceeds, the "Treasury Portfolio Return"), as the case may be, shall
promptly be paid to the Person in whose name the Corporate PIES Certificate (or
one or more Predecessor Corporate PIES Certificates) of which such Senior Note
or the Treasury Portfolio Interest, as the case may be, is a part is registered
at the close of business on the Record Date for such Payment Date or Purchase
Contract Settlement Date, as applicable.
<PAGE>

                                                                              31

            Each Corporate PIES Certificate evidencing, in part, a 1/20th, or
5%, undivided beneficial interest in a Senior Note or the Treasury Portfolio
Interest delivered under this Agreement upon registration of, transfer of or in
exchange for or in lieu of any other Corporate PIES Certificate shall carry the
right to accrued and unpaid interest, and the right to accrue interest (and
accreted and accreting principal in the case of non-interest bearing components
of the Treasury Portfolio Interest), which rights were carried by such interest
in a Senior Note or the Treasury Portfolio Interest, as the case may be,
relating to such other Corporate PIES Certificate.

            In the case of any Corporate PIES with respect to which (1) Cash
Settlement of the related Purchase Contract is effected on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, (2) Early
Settlement of the related Purchase Contract is effected on an Early Settlement
Date, (3) Merger Early Settlement of the related Purchase Contract is effected
on a Merger Early Settlement Date or (4) a Collateral Substitution is effected,
in each case, on a date that is after any Record Date and on or prior to the
next succeeding Payment Date, the interest payment on the Senior Note or the
Treasury Portfolio Return, as the case may be, relating to such Corporate PIES
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement, Early Settlement, Merger Early Settlement
or Collateral Substitution, as the case may be, and such payment shall, subject
to receipt thereof by the Purchase Contract Agent, be payable to the Person in
whose name the Corporate PIES Certificate (or one or more Predecessor Corporate
PIES Certificates) was registered at the close of business on the corresponding
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Corporate PIES with respect to which Cash
Settlement, Early Settlement or Merger Early Settlement of the related Purchase
Contract is effected on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, on an Early Settlement Date or on a Merger
Early Settlement Date, respectively, or with respect to which a Collateral
Substitution has been effected, interest payments on the related Senior Notes or
the Treasury Portfolio Return, as the case may be, that would otherwise be
payable after the fifth Business Day preceding the Purchase Contract Settlement
Date, after the Early Settlement Date, after the Merger Early Settlement Date,
or after the Collateral Substitution, respectively, shall not be payable
hereunder to the Holder of such Corporate PIES; provided, however, that to the
extent that such Holder continues to hold the Separated Senior Note that
formerly comprised a part of such Holder's Corporate PIES, such Holder shall be
entitled to receive the interest payments on such Separated Senior Note, as
provided in the Indenture.

Section 4.2. Interest Rate Reset; Reset of Other Terms.

            The applicable interest rate borne by the Senior Notes and the other
terms of the Senior Notes, whether or not part of Corporate PIES, shall be reset
pursuant to the Indenture, and will be effective with respect to all Senior
Notes, whether or not then constituting a component of Corporate PIES, as of the
Remarketing Settlement Date, in the case of a Successful Remarketing, or, solely
with respect to the interest rate (which shall be reset to the Reset Rate), as
of the Purchase Contract Settlement Date, in the event of a Failed Remarketing
or in the event there is no Remarketing pursuant to clause (c) of the definition
of Reset Rate in the Indenture Officers' Certificate.

Section 4.3. Notice and Voting.

<PAGE>

                                                                              32

            The Purchase Contract Agent is entitled to exercise the voting and
any other consensual rights pertaining to the Pledged Senior Notes, but only to
the extent instructed in writing by the Holders as described below. Upon receipt
of notice of any meeting at which holders of Senior Notes are entitled to vote
or upon any solicitation of consents, waivers or proxies of holders of Senior
Notes, the Purchase Contract Agent shall, as soon as practicable thereafter,
mail to the Holders of Corporate PIES a notice:

            (1) containing such information as is contained in the notice or
      solicitation;

            (2) stating that each Holder on the record date set by the Purchase
      Contract Agent therefor (which, to the extent possible, shall be the same
      date as the record date for determining the holders of Senior Notes
      entitled to vote) shall be entitled to instruct the Purchase Contract
      Agent as to the exercise of the voting rights pertaining to such Senior
      Notes relating to their Corporate PIES; and

            (3) stating the manner in which such instructions may be given.

            Upon the written request of the Holders of Corporate PIES on such
record date received by the Purchase Contract Agent at least six calendar days
prior to such meeting or by the expiration date of any such solicitation, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum principal amount of Senior Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of Corporate PIES, the Purchase Contract Agent shall abstain from voting
the Senior Notes relating such Corporate PIES. The Company hereby agrees, if
applicable, to solicit Holders of Corporate PIES to timely instruct the Purchase
Contract Agent in order to enable the Purchase Contract Agent to vote such
Senior Notes.

                                    ARTICLE V

                     THE PURCHASE CONTRACTS; THE REMARKETING

Section 5.1. Purchase of Shares of Common Stock.

            Each Purchase Contract shall, unless a Termination Event has
occurred as set forth in Section 5.7, an Early Settlement has occurred in
accordance with Section 5.9 or a Merger Early Settlement has occurred in
accordance with Section 5.10, obligate the Holder of the related PIES to
purchase, and the Company to sell, on the Purchase Contract Settlement Date at a
price equal to the Stated Amount (the "Purchase Price"), a number of newly
issued shares of Common Stock equal to the Settlement Rate then in effect. The
"Settlement Rate" is equal to:

            (1) if the Applicable Closing Price per share is equal to or greater
      than $16.62 (the "Threshold Appreciation Price"), 3.0084 shares of Common
      Stock per Purchase Contract;

            (2) if the Applicable Closing Price per share is less than the
      Threshold Appreciation Price, but greater than $13.85 (the "Reference
      Price"), the number of shares

<PAGE>

                                                                              33

      of Common Stock determined by dividing the Stated Amount by the Applicable
      Closing Price; and

            (3) if the Applicable Closing Price per share is less than or equal
      to the Reference Price, 3.6101 shares of Common Stock per Purchase
      Contract,

in each case subject to adjustment as provided in Section 5.5 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).

            Promptly after the calculation of the Settlement Rate and the
Applicable Closing Price, the Company shall give the Purchase Contract Agent
notice thereof. All calculations and determinations of the Settlement Rate and
the Applicable Closing Price shall be made by the Company or its agent based on
their good faith calculations, and the Purchase Contract Agent shall have no
responsibility with respect thereto.

            As provided in Section 5.12, no fractional shares of Common Stock
will be issued upon settlement of Purchase Contracts.

            The "Applicable Closing Price" means the average of the Closing
Prices per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date, or in the case of the exercise of a Merger Early Settlement
right, the Cash Merger Date.

            The "Closing Price" per share of the Common Stock on any date of
determination means:

            (1) the closing sale price (or, if no closing price is reported, the
      last reported sale price) per share of the Common Stock on the NYSE on
      such date;

            (2) if the Common Stock is not listed for trading on the NYSE on any
      such date, the closing sale price per share as reported in the composite
      transactions for the principal United States securities exchange on which
      the Common Stock is so listed;

            (3) if the Common Stock is not so listed on a United States national
      or regional securities exchange, the closing sale price per share as
      reported by The Nasdaq Stock Market;

            (4) if the Common Stock is not so reported, the last quoted bid
      price per share for the Common Stock in the over-the-counter market as
      reported by the National Quotation Bureau or similar organization; or

            (5) if such bid price is not available, the average of the mid-point
      of the last bid and ask prices per share of the Common Stock on such date
      from at least three nationally recognized independent investment banking
      firms retained for this purpose by the Company.

            A "Trading Day" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter

<PAGE>

                                                                              34

market at the close of business and (2) has traded at least once on the national
or regional securities exchange or association or the over-the-counter market
that is the primary market for the trading of the Common Stock.

            Each Holder of a Corporate PIES or a Treasury PIES, by its
acceptance thereof:

            (1) irrevocably authorizes the Purchase Contract Agent to enter into
      and perform the related Purchase Contract on its behalf as its
      attorney-in-fact (including the execution of Certificates on behalf of
      such Holder as such Holder's attorney-in-fact);

            (2) agrees to be bound by the terms and provisions thereof;

            (3) covenants and agrees to perform its obligations under such
      Purchase Contracts;

            (4) consents to the provisions hereof;

            (5) irrevocably authorizes the Purchase Contract Agent to enter into
      and perform this Agreement and the Pledge Agreement on its behalf as its
      attorney-in-fact;

            (6) consents to and agrees to be bound by the Pledge of the Senior
      Notes or the Treasury Securities pursuant to the Pledge Agreement; and

            (7) agrees to treat itself as the owner of the related Senior Notes,
      Treasury Portfolio Interest or Treasury securities, as the case may be, in
      each case for U.S. Federal, state and local income and franchise tax
      purposes;

provided that, upon a Termination Event, the rights of the Holder of such PIES
under the Purchase Contract may be enforced without regard to any other rights
or obligations. Each Holder of a Corporate PIES or a Treasury PIES, by its
acceptance thereof, further covenants and agrees, that to the extent and in the
manner provided in Section 5.3 and the Pledge Agreement, but subject to the
terms thereof, proceeds from the Remarketing of the Senior Notes (less the
Remarketing Fee payable to the Remarketing Agents pursuant to the Remarketing
Agreement), the Treasury Portfolio Interest or the Treasury Securities at
maturity, as the case may be, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Purchase Contract, shall be paid
on the Purchase Contract Settlement Date by the Collateral Agent to the Company
in satisfaction of such Holder's obligations under such Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.

            Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts relating to
such Certificate and the Pledge Agreement and the transferor shall be released
from the obligations under this Agreement, the Purchase Contracts relating to
the Certificates so transferred and the Pledge Agreement. The Company covenants
and agrees, and each Holder of a Certificate, by its acceptance thereof,
likewise covenants and agrees, to be bound by the provisions of this paragraph.

Section 5.2. Purchase Contract Adjustment Payments.

<PAGE>

                                                                              35

            The Company shall pay, on each Payment Date, the Purchase Contract
Adjustment Payments payable in respect of each Purchase Contract to the Person
in whose name a Certificate (or one or more Predecessor Certificates) is
registered at the close of business on the Record Date next preceding such
Payment Date in such coin or currency of the United States as at the time of
payment shall be legal tender for the payment of public and private debts. The
Purchase Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in The City of New York maintained for that purpose or,
at the option of the Company, by wire transfer or by check mailed to the address
of the Person entitled thereto at such Person's address as it appears on the
Corporate PIES Register or Treasury PIES Register.

            Upon the occurrence of a Termination Event, the Company's obligation
to pay Purchase Contract Adjustment Payments (including any accrued Purchase
Contract Adjustment Payments) shall cease.

            Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the recreation of Corporate PIES) any other
Certificate shall carry the right to accrued and unpaid Purchase Contract
Adjustment Payments, and the right to accrue Purchase Contract Adjustment
Payments, which rights were carried by the Purchase Contracts relating to such
other Certificates from the date of issuance to and excluding, the Purchase
Contract Settlement Date, unless such Purchase Contracts have been settled
earlier pursuant to this Agreement.

            In the case of any PIES with respect to which (1) Cash Settlement of
the related Purchase Contract is effected on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, (2) Early Settlement of the
related Purchase Contract is effected on an Early Settlement Date or (3) Merger
Early Settlement of the related Purchase Contract is effected on a Merger Early
Settlement Date, in each case, on a date that is after any Record Date and on or
prior to the next succeeding Payment Date, Purchase Contract Adjustment Payments
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement, Early Settlement or Merger Early
Settlement, as the case may be, and such Purchase Contract Adjustment Payments
shall be paid to the Person in whose name the Certificate evidencing such PIES
(or one or more Predecessor Certificates) is registered at the close of business
on such Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any PIES with respect to which Cash
Settlement, Early Settlement or Merger Early Settlement of the related Purchase
Contract is effected on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, an Early Settlement Date or a Merger Early
Settlement Date, respectively, Purchase Contract Adjustment Payments that would
otherwise be payable after the fifth Business Day preceding the Purchase
Contract Settlement Date, after the Early Settlement Date or after the Merger
Early Settlement Date, respectively, with respect to such Purchase Contract
shall not be payable.

            Promptly after the calculation of any adjustment to the Purchase
Contract Adjustment Payments arising from a Reset Transaction, the Company shall
give the Purchase Contract Agent notice thereof. All calculations and
determinations of the Adjusted Purchase Contract Adjustment Payment Rate shall
be made by the Company or its agent in good faith and the Purchase Contract
Agent shall have no responsibility with respect thereto. The Purchase Contract
Agent shall not at any time be under any duty or responsibility to any Holder of
PIES to

<PAGE>

                                                                              36

determine whether any facts exist which may require any adjustment to the
Purchase Contract Adjustment Payments, or with respect to the nature or extent
or calculation of any such adjustment when made, or with respect to the method
employed in making the same.

Section 5.3. Payment of Purchase Price; Remarketing.

            (a) Unless a Termination Event has occurred or a Holder has settled
the related Purchase Contract through a Cash Settlement pursuant to Section 5.8,
an Early Settlement pursuant to Section 5.9 or a Merger Early Settlement
pursuant to Section 5.10, the settlement of the Purchase Contract relating to a
PIES will be made by Remarketing in accordance with Section 2 of the Remarketing
Agreement.

            (b) With respect to any Pledged Senior Notes which are subject of a
Failed Remarketing, the Collateral Agent, for the benefit of the Company, and
upon written direction of the Company as provided in the Pledge Agreement,
reserves all of its rights as a secured party with respect thereto and, subject
to applicable law and paragraph (c) below, may (i) retain such Senior Notes in
full satisfaction of the Holders' obligations under the related Purchase
Contracts or (ii) sell such Senior Notes in one or more public or private sales.

            (c) A Holder of Corporate PIES may elect not to participate in the
Remarketing by creating Treasury PIES at any time except during an Active
Remarketing Period or by notifying the Purchase Contract Agent of such election
and complying with the procedures for creating Treasury PIES set forth in
Section 3.13 until 5:00 p.m. (New York City time) on the Business Day
immediately preceding the first of the three sequential remarketing dates of any
Three-Day Remarketing Period. A Holder that does not so create Treasury PIES by
delivering the Treasury Security or Treasury Securities pursuant to this
paragraph and Section 3.13 shall be deemed to have elected to participate in any
Remarketing.

            (d) In the event that all or any portion of the Pledged Treasury
Securities of Treasury PIES matures before the Purchase Contract Settlement
Date, the Collateral Agent shall invest the proceeds therefrom in Permitted
Investments in accordance with the Pledge Agreement.

            Without receiving any instruction from any such Holder of Treasury
PIES, the Collateral Agent shall apply, on the Purchase Contract Settlement
Date, the 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.

<PAGE>

                                                                              37

            (e) Any distributions to Holders of excess funds and interest
pursuant to a Successful Remarketing or described in (d) above shall be payable
at the office of the Purchase Contract Agent in The City of New York maintained
for that purpose or, at the option of the Holder, or the holder of Separated
Senior Notes, as applicable, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Register or by wire
transfer to an account specified by the Holder, or the holder of Separated
Senior Notes, as applicable.

            (f) The obligations of each Holder to pay the Purchase Price are
non-recourse obligations and except to the extent paid by Cash Settlement, Early
Settlement or Merger Early Settlement, are payable solely out of the proceeds of
any Collateral pledged to secure the obligations of the Holders, and in no event
shall Holders be liable for any deficiency between such payments and the
Purchase Price.

            (g) Notwithstanding anything to the contrary herein, the Company
shall not be obligated to issue any Common Stock in respect of a Purchase
Contract or deliver any certificates therefor to the Holder of the related PIES
unless the Company shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder by such Holder
in the manner herein set forth, which payment, in the case of Corporate PIES
upon the occurrence of a Failed Remarketing, shall occur by the resale of
Pledged Senior Notes or foreclosure on and retention of such Pledged Senior
Notes.

Section 5.4. Issuance of Shares of Common Stock.

            (a) Unless a Termination Event shall have occurred on or prior to
the Purchase Contract Settlement Date, the applicable Early Settlement Date or
the Merger Early Settlement Date, upon its receipt of payment in full of the
Purchase Price for the shares of Common Stock purchased by Holders pursuant to
the provisions of this Article and subject to Section 5.5(b), the Company shall
issue and deposit with the Company's transfer agent and registrar for its Common
Stock (the "Common Stock Transfer Agent"), for the benefit of the Holders of the
Outstanding PIES, one or more certificates representing the newly issued shares
of Common Stock registered in the name of the Purchase Contract Agent (or its
nominee) as custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions for which a record date and
payment date for such dividend or distribution has occurred after the applicable
Early Settlement Date, the Merger Early Settlement Date or the Purchase Contract
Settlement Date, as the case may be, being hereinafter referred to as the
"Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. The Company shall furnish to the Purchase Contract Agent the name and
address of the Common Stock Transfer Agent and of any change thereof.

            (b) Upon surrender of a Certificate to the Purchase Contract Agent
on or after the applicable Early Settlement Date, the Merger Early Settlement
Date or the Purchase Contract Settlement Date, as the case may be, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article Five (after
taking into account all PIES then held by such Holder), together with cash in
lieu of fractional shares as provided in Section 5.12 and any dividends or
distributions with respect to such shares

<PAGE>

                                                                              38

constituting part of the Purchase Contract Settlement Fund, but without any
interest thereon (or, if such Certificate is not surrendered to the Purchase
Contract Agent; or if no such instructions are given to the Purchase Contract
Agent by the Holder, the Common Stock Agent shall hold such certificate
representing shares of Common Stock, and the Purchase Contract Agent shall hold
such cash in lieu of fractional shares and dividends or distributions, as
applicable, in the name of the Purchase Contract Agent or its nominee in trust
for the benefit of such Holder until the expiration of the time period specified
in the abandoned property laws of the relevant state, following which the
Purchase Contract Agent shall cause such cash to be delivered to such Holders),
and the Certificate so surrendered shall forthwith be cancelled. Such shares
shall be registered by the Common Stock Transfer Agent in the Company's register
for its Common Stock and in accordance with its customary procedures for
issuance of such Common Stock, in the name of the Holder or the Holder's
designee as specified in the settlement instructions provided by the Holder to
the Purchase Contract Agent and forwarded by the Purchase Contract Agent to the
Common Stock Transfer Agent. If any shares of Common Stock issued in respect of
a Purchase Contract are to be registered to a Person other than the Person in
whose name the Certificate evidencing such Purchase Contract is registered, no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.

Section 5.5. Adjustment of Settlement Rate and Early Settlement Rate.

            (a) Adjustments for Dividends, Distributions, Stock Splits, Etc.

            (1) In case the Company shall pay or make a dividend or other
      distribution on the Common Stock in Common Stock, the Settlement Rate in
      effect or the Early Settlement Rate, as applicable, in effect at the
      opening of business on the Business Day following the date fixed for the
      determination of shareholders entitled to receive such dividend or other
      distribution shall be increased by dividing such Settlement Rate by a
      fraction of which:

            (i) the numerator shall be the number of shares of Common Stock
         outstanding at the close of business on the date fixed for such
         determination; and

            (ii) and the denominator shall be the sum of such number of shares
         and the total number of shares constituting such dividend or other
         distribution,

such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.

<PAGE>

                                                                              39

      (2) In case the Company shall issue rights, options or warrants to all
holders of Common Stock (not being available on an equivalent basis to Holders
of the PIES upon settlement of the Purchase Contracts relating to such PIES)
entitling them, for a period expiring within 45 days after the record date for
the determination of shareholders entitled to receive such rights, options or
warrants, to subscribe for or purchase shares of Common Stock at a price per
share less than the Current Market Price per share of Common Stock on the date
fixed for the determination of shareholders entitled to receive such rights,
options or warrants (other than pursuant to a dividend reinvestment plan), the
Settlement Rate or the Early Settlement Rate, as applicable, in effect at the
opening of business on the day following the date fixed for such determination
shall be increased by dividing such Settlement Rate or the Early Settlement
Rate, as applicable, by a fraction of which:

            (i) the numerator shall be the number of shares of Common Stock
      outstanding at the close of business on the date fixed for such
      determination plus the number of shares of Common Stock which the
      aggregate of the offering price of the total number of shares of Common
      Stock so offered for subscription or purchase would purchase at such
      Current Market Price; and

            (ii) the denominator shall be the number of shares of Common Stock
      outstanding at the close of business on the date fixed for such
      determination plus the number of shares of Common Stock so offered for
      subscription or purchase,

such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not issue any such
rights, options or warrants in respect of shares of Common Stock held in the
treasury of the Company.

      (3) In case outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock, the Settlement Rate or
the Early Settlement Rate, as applicable, in effect at the opening of business
on the day following the day upon which such subdivision or split becomes
effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Settlement Rate or the Early Settlement Rate, as
applicable, in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately reduced,
such increase or reduction, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision, split or combination becomes effective.

      (4) In case the Company shall, by dividend or otherwise, distribute to all
holders of Common Stock evidences of its indebtedness or assets (including
securities, but excluding any rights, options or warrants referred to in
paragraph (2) of this Section

<PAGE>

                                                                              40

5.5(a), any dividend or distribution paid exclusively in cash and any dividend
or distribution referred to in paragraph (1) of this Section 5.5(a)), the
Settlement Rate or the Early Settlement Rate, as applicable, in effect, shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate or the Early Settlement Rate, as applicable, in effect
immediately prior to the close of business on the date fixed for the
determination of shareholders entitled to receive such distribution by a
fraction of which:

            (i) the numerator shall be the Current Market Price per share of
      Common Stock on the date fixed for such determination less the then fair
      market value (as determined by the Board of Directors, whose determination
      shall be conclusive and described in a Board Resolution) of the portion of
      the assets or evidences of indebtedness so distributed applicable to one
      share of Common Stock; and

            (ii) the denominator shall be such Current Market Price per share of
      Common Stock,

such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such distribution. In any case in which this paragraph (4)
is applicable, paragraph (2) of this Section 5.5(a) shall not be applicable.

      (5) In case the Company shall, by dividend or otherwise, distribute to all
holders of Common Stock (I) cash (excluding any cash that is distributed in a
Reorganization Event to which Section 5.5(b) applies or as part of a
distribution referred to in paragraph (4) of this Section 5.5(a)) in an
aggregate amount that, combined together with the aggregate amount of any other
distributions to all holders of Common Stock made exclusively in cash (other
than in connection with a Reorganization Event) within the 12 months preceding
the date of payment of such distribution and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section has been made
and (II) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of consideration payable in respect of any tender or
exchange offer by the Company or any of its subsidiaries for all or any portion
of Common Stock concluded within the 12 months preceding the date of payment of
the distribution described in Clause (I) above and in respect of which no
adjustment pursuant to this paragraph (5) or paragraph (4) or paragraph (6) of
this Section 5.5(a) has been made, exceeds 15% of the product of the Current
Market Price per share of Common Stock on the date for the determination of
holders of shares of Common Stock entitled to receive such distribution times
the number of shares of Common Stock outstanding on such date, then, and in each
such case, immediately after the close of business on such date for
determination, the Settlement Rate or Early Settlement Rate, as applicable, in
effect, shall be increased so that the same shall equal the rate determined by
dividing the Settlement Rate or Early Settlement Rate, as applicable, in effect
immediately prior to the close of business on the date fixed for determination
of the shareholders entitled to receive such distribution by a fraction of
which:

<PAGE>

                                                                              41

            (i) the numerator shall be equal to the Current Market Price per
      share of the Common Stock on the date fixed for such determination less an
      amount equal to the quotient of (x) the combined amount distributed or
      payable in the transactions described in clauses (I) and (II) above
      divided by (y) the number of shares of Common Stock outstanding on such
      date for determination; and

            (ii) the denominator shall be equal to the Current Market Price per
      share of Common Stock on such date for determination.

      (6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares) of
(I) an aggregate consideration having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution) that combined together with the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the expiration
of such tender or exchange offer, of consideration payable in respect of any
other tender or exchange offer, by the Company or any subsidiary of the Company
for all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section 5.5(a) or this
paragraph (6) has been made, and (II) the aggregate amount of any distributions
to all holders of Common Stock made exclusively in cash within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section 5.5(a) or this
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate or Early Settlement Rate, as
applicable, in effect, shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate or Early Settlement Rate, as
applicable, in effect immediately prior to the close of business on the date of
the Expiration Time by a fraction of which:

            (i) the numerator shall be equal to (A) the product of (1) the
      Current Market Price per share of Common Stock on the date of the
      Expiration Time and (2) the number of shares of Common Stock outstanding
      (including any tendered shares) on the Expiration Time less (B) the amount
      of cash plus the fair market value (determined as aforesaid) of the
      aggregate consideration payable to shareholders based on the transactions
      described in clauses (I) and (II) above (assuming in the case of clause
      (I) the acceptance, up to any maximum specified in the terms of the tender
      or exchange offer, of Purchased Shares), and

<PAGE>

                                                                              42

            (ii) the denominator shall be equal to the product of (A) the
      Current Market Price per share of Common Stock as of the Expiration Time
      and (B) the number of shares of Common Stock outstanding (including any
      tendered shares) as of the Expiration Time less the number of all shares
      validly tendered and not withdrawn as of the Expiration Time (the shares
      deemed so accepted, up to any such maximum, being referred to as the
      "Purchased Shares").

      (7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.5(b) applies) shall be deemed to
involve:

            (a) a distribution of such securities other than Common Stock to all
      holders of Common Stock (and the effective date of such reclassification
      shall be deemed to be "the date fixed for the determination of
      shareholders entitled to receive such distribution" and the "date fixed
      for such determination" within the meaning of paragraph (4) of this
      Section 5.5(a)); and

            (b) a subdivision, split or combination, as the case may be, of the
      number of shares of Common Stock outstanding immediately prior to such
      reclassification into the number of shares of Common Stock outstanding
      immediately thereafter (and the effective date of such reclassification
      shall be deemed to be "the day upon which such subdivision or split
      becomes effective" or "the day upon which such combination becomes
      effective", as the case may be, and "the day upon which such subdivision,
      split or combination becomes effective" within the meaning of paragraph
      (3) of this Section 5.5(a)).

      (8) The "Current Market Price" per share of Common Stock on any day means
the average of the daily Closing Prices for the five consecutive Trading Days
selected by the Company commencing not more than 30 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
"ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date", when used with
respect to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.

      (9) All adjustments to the Settlement Rate or the Early Settlement Rate,
as applicable, shall be calculated to the nearest 1/10,000th of a share of
Common Stock (or if there is not a nearest 1/10,000th of a share, to the next
lower 1/10,000th of a share). No adjustment in the Settlement Rate or the Early
Settlement Rate, as applicable, shall be required unless such adjustment would
require an increase or decrease of at least one percent thereof; provided,
however, that any adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Settlement Rate or the
Early Settlement Rate, as applicable, pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of this Section 5.5(a), an adjustment shall also be made
to the Applicable Closing Price solely to determine which of clauses (1), (2) or
(3) of the definition of Settlement Rate or the Early Settlement Rate, as
applicable, in Section 5.1 will apply on the Purchase

<PAGE>

                                                                              43

Contract Settlement Date. Such adjustment shall be made by multiplying the
Applicable Closing Price by a fraction of which the numerator shall be the
Settlement Rate or the Early Settlement Rate, as applicable, in effect
immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of this Section 5.5(a) and the denominator shall be the
Settlement Rate or the Early Settlement Rate, as applicable, in effect
immediately before such adjustment; provided, however, that if such adjustment
to the Settlement Rate or the Early Settlement Rate, as applicable, in effect,
is required to be made pursuant to the occurrence of any of the events
contemplated by paragraph (1), (2), (3), (4), (5), (7) or (10) of this Section
5.5(a) during the period taken into consideration for determining the Applicable
Closing Price, appropriate and customary adjustments shall be made to the
Settlement Rate or the Early Settlement Rate, as applicable.

      (10) The Company may make such increases in the Settlement Rate or the
Early Settlement Rate, as applicable, in addition to those required by this
Section 5.5(a), as it considers to be advisable in order to avoid or diminish
any income tax to any holders of shares of Common Stock resulting from any
dividend or distribution of stock or issuance of rights, options or warrants to
purchase or subscribe for stock or from any event treated as such for income tax
purposes or for any other reason.

      (b) Adjustment for Consolidation, Merger or Other Reorganization Event.

      In the event of:

            (i) any consolidation or merger of the Company with or into another
      Person (other than a merger or consolidation in which the Company is the
      continuing corporation and in which the shares of Common Stock outstanding
      immediately prior to the merger or consolidation are not exchanged for
      cash, securities or other property of the Company or another corporation);

            (ii) any sale, transfer, lease or conveyance to another Person of
      the property of the Company as an entirety or substantially as an
      entirety;

            (iii) any statutory exchange of securities of the Company with
      another Person (other than in connection with a merger or acquisition); or

            (iv) any liquidation, dissolution or winding up of the Company other
      than as a result of or after the occurrence of a Termination Event (any
      such event, a "Reorganization Event"),

the Settlement Rate or Early Settlement Rate, as applicable, in effect, will be
adjusted to provide that each Holder of PIES will receive on the Purchase
Contract Settlement Date with respect to each Purchase Contract forming a part
thereof, the kind and amount of securities, cash and other property receivable
upon such Reorganization Event (without any interest thereon, and without any
right to dividends or distribution thereon which have a record date that is
prior to the Purchase Contract Settlement Date) by a Holder of the number of
shares of Common Stock issuable on account of each Purchase Contract if the
Purchase Contract Settlement Date had occurred immediately prior to such
Reorganization Event, assuming such Holder of Common Stock is not a Person with
which the Company consolidated or into which the Company merged

<PAGE>

                                                                              44

or which merged into the Company or to which such sale or transfer was made, as
the case may be (any such Person, a "Constituent Person"), or an Affiliate of a
Constituent Person to the extent such Reorganization Event provides for
different treatment of Common Stock held by Affiliates of the Company and
non-Affiliates and such Holder failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such Reorganization Event (provided that if the kind or amount of
securities, cash and other property receivable upon such Reorganization Event is
not the same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization Event
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares).

            In the event of such a Reorganization Event, the Person formed by
such consolidation, merger or exchange or the Person which acquires the assets
of the Company or, in the event of a liquidation, dissolution or winding up of
the Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that the Holders of each Outstanding PIES shall
have the rights provided by this Section 5.5(b). Such supplemental agreement
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.

            (c) All calculations and determinations pursuant to this Section 5.5
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.

Section 5.6. Notice of Adjustments and Certain Other Events.

            (a) Whenever the Settlement Rate or Early Settlement Rate, as
applicable, and the Applicable Closing Price are adjusted as herein provided,
the Company shall:

            (i) forthwith compute the adjusted Settlement Rate or Early
Settlement Rate, as applicable and Applicable Closing Price in accordance with
Section 5.5 and prepare and transmit to the Purchase Contract Agent an Officers'
Certificate setting forth the Settlement Rate or Early Settlement Rate, as
applicable and the Applicable Closing Price, the method of calculation thereof
in reasonable detail, and the facts requiring such adjustment and upon which
such adjustment is based; and

            (ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Settlement Rate or Early Settlement Rate, as
applicable and the Applicable Closing Price pursuant to Section 5.5 (or if the
Company is not aware of such occurrence, as soon as practicable after becoming
so aware), provide a written notice to the Holders of the PIES of the occurrence
of such event and a statement in reasonable detail setting forth the method by
which the adjustment to the Settlement Rate then or Early Settlement Rate,

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                                                                              45

as applicable and the Applicable Closing Price was determined and setting forth
the adjusted Settlement Rate or Early Settlement Rate, as applicable and
Applicable Closing Price.

            (b) The Purchase Contract Agent shall not at any time be under any
duty or responsibility to any Holder of PIES to determine whether any facts
exist which may require any adjustment of the Settlement Rate or Early
Settlement Rate, as applicable or the Applicable Closing Price, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property, which
may at the time be issued or delivered with respect to any Purchase Contract;
and the Purchase Contract Agent makes no representation with respect thereto.
The Purchase Contract Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.

Section 5.7. Termination Event; Notice.

            The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive, and the obligations of the Company to pay, Purchase Contract
Adjustment Payments and the rights and obligations of Holders to purchase shares
of Common Stock, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon and after the occurrence of a
Termination Event, the PIES shall thereafter represent the right to receive the
Senior Notes or Treasury Portfolio Interest forming a part of such PIES in the
case of Corporate PIES, or Treasury Securities in the case of Treasury PIES, in
accordance with the provisions of Section 5.4 of the Pledge Agreement. Upon the
occurrence of a Termination Event, the Company shall promptly, but in no event
later than two Business Days thereafter, give written notice to the Purchase
Contract Agent and the Collateral Agent and shall cause written notice thereof
to be given to the Holders, at their addresses as they appear in the Register.

Section 5.8. Cash Settlement

            (a) (i) Unless a Holder has effected an Early Settlement pursuant to
Section 5.9 or a Merger Early Settlement pursuant to Section 5.10, a Termination
Event shall have occurred pursuant to Section 5.7 or a Successful Remarketing
shall have occurred, Holders of Corporate PIES may settle their Purchase
Contracts in cash by delivering to the Purchase Contract Agent a notice in
substantially the form of Exhibit F hereto regarding its intention to pay in
cash ("Cash Settlement") the Purchase Price for the shares of Common Stock to be
purchased pursuant to the related Purchase Contract; provided that such notice
must be given by 11:00 a.m. (New York City time) on the sixth Business Day
immediately preceding the Purchase Contract Settlement Date.

            (ii) A Holder of a Corporate PIES who has so notified the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
paragraph (a) (i) above shall

<PAGE>

                                                                              46

pay the Purchase Price to the Securities Intermediary for deposit in the
Collateral Account prior to 11:00 a.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to or upon the
order of the Securities Intermediary and the Securities Intermediary shall
instruct the Collateral Agent to release to the Purchase Contract Agent the
Pledged Senior Notes, for delivery to the Holders of the related Corporate PIES
who have complied with this Section. Any cash received by the Collateral Agent
shall be invested promptly by the Securities Intermediary in Permitted
Investments and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement. Any funds received by the Securities
Intermediary in respect of the investment earnings from the investment in such
Permitted Investments shall be distributed to the Purchase Contract Agent when
received for payment, on a pro rata basis based on the number of Corporate PIES
formerly held by such Holder, to the Holders of the related Corporate PIES on
the Purchase Contract Settlement Date.

            (iii) If a Holder of a Corporate PIES fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, or notifies the Purchase Contract Agent as provided in
paragraph (a)(i) above of its intention to pay the Purchase Price in cash but
fails to make such payment as required by paragraph (a)(ii) above, such Holder
shall be deemed to have consented (A) to the disposition of the Pledged Senior
Notes on the third Business Day prior to the Purchase Contract Settlement Date
pursuant to the Final Remarketing or, (B) if a Failed Remarketing occurs, to the
Collateral Agent, for the benefit of the Company, and upon written direction of
the Company as provided in the Pledge Agreement, exercising all of its rights as
a secured party with respect to any Pledged Senior Notes under the Pledge
Agreement and, subject to applicable law and Section 5.3(g), 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.

            (iv) By 11:00 a.m. (New York City time), on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, the Purchase
Contract Agent, based on notices received by the Purchase Contract Agent
pursuant to Section 5.8(a)(i) hereof and notice from the Securities Intermediary
regarding cash received by it prior to such time, shall notify the Remarketing
Agents, the Collateral Agent, the Trustee and the Company, by use of a notice
substantially in the form of Exhibit G hereto, of the aggregate principal amount
of Pledged Senior Notes to be remarketed in accordance with the remarketing
procedures set forth in Section 2 of the Remarketing Agreement.

            (b) (i) Unless a Holder of a Treasury PIES has effected an Early
Settlement of the related Purchase Contract in the manner described in Section
5.9 or a Merger Early Settlement of the related Purchase Contract in the manner
described in Section 5.10, a Termination Event shall have occurred pursuant to
Section 5.7 or a Successful Remarketing shall have occurred, Holders of Treasury
PIES may settle their Purchase Contracts in cash. Each Holder of a Treasury PIES
who intends to pay in cash to satisfy such Holder's obligation under the
Purchase Contract shall notify the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit F hereto regarding its intention to pay in
cash the Purchase Price for the shares of Common Stock to be purchased pursuant
to the related Purchase Contract. To settle its

<PAGE>

                                                                              47

Purchase Contracts in cash pursuant to this Section, such notice must be given
prior to 5:00 p.m. (New York City time), on the second Business Day immediately
preceding the Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York
City time), on the next succeeding Business Day, the Purchase Contract Agent
shall notify the Collateral Agent of the receipt of such notices from such
Holders intending to make a Cash Settlement.

            (ii) A Holder of a Treasury PIES who has so notified the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
paragraph (b)(i) above shall pay the Purchase Price to the Securities
Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York
City time), on the Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by certified or cashiers'
check or wire transfer, in each case, in immediately available funds payable to
or upon the order of the Securities Intermediary and the Securities Intermediary
shall instruct the Collateral Agent to release to the Purchase Contract Agent
the Pledged Treasury Securities for delivery to the Holders of the related
Treasury PIES who have complied with this Section. Any cash received by the
Collateral Agent shall be invested promptly by the Securities Intermediary in
Permitted Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by the
Securities Intermediary in respect of the investment earnings from the
investment in such Permitted Investments shall be distributed to the Purchase
Contract Agent when received for payment to the Holder of the related Treasury
PIES on the Purchase Contract Settlement Date.

            (iii) If a Holder of a Treasury PIES fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
paragraph (b)(i) above, or does notify the Purchase Contract Agent as provided
in paragraph (b)(i) above of its intention to pay the Purchase Price in cash but
fails to make such payment as required by paragraph (b)(ii) above, then upon the
maturity of the Pledged Treasury Securities held by the Securities Intermediary,
the principal amount of the Treasury Securities received by the Securities
Intermediary shall be invested promptly in Permitted Investments. On the
Purchase Contract Settlement Date, an amount equal to the Purchase Price shall
be remitted to the Company as payment thereof without receiving any instructions
from the Holder of the related Treasury PIES. In the event the sum of the
Proceeds from the related Pledged Treasury Securities and the investment
earnings earned from such investments is in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the Collateral Agent
shall cause the Securities Intermediary to distribute such excess to the
Purchase Contract Agent for the benefit of the Holder of the related Treasury
PIES when received.

            (c) Upon Cash Settlement of any Purchase Contract:

            (i) the Collateral Agent will in accordance with the terms of the
Pledge Agreement cause the Pledged Senior Notes or the Pledged Treasury
Securities, as the case may be, relating to the relevant PIES to be released
from the Pledge, free and clear of any security interest of the Company, and
transferred to the Purchase Contract Agent for delivery to the Holder thereof or
its designee as soon as practicable;

<PAGE>

                                                                              48

            (ii) subject to the receipt thereof, the Purchase Contract Agent
shall, by book-entry transfer or other appropriate procedures, in accordance
with written instructions provided by the Holder thereof, transfer such Senior
Notes or such Treasury Securities, as the case may be (or, if no such
instructions are given to the Purchase Contract Agent by the Holder, the
Purchase Contract Agent shall hold such Senior Notes or such Treasury
Securities, as the case may be, and any interest payment thereon, in the name of
the Purchase Contract Agent or its nominee in trust for the benefit of such
Holder until the expiration of the time period specified in the abandoned
property laws of the relevant State) and, in connection with such Senior Notes,
the Purchase Contract Agent shall have no responsibility to vote or take any
other consensual action with respect thereto; and

            (iii) the Company shall cause the number of shares of Common Stock
issuable upon Cash Settlement of the related Purchase Contracts pursuant to
Section 5.4, together with any payment in lieu of any fraction of a share, as
provided in Section 5.12, to the Holder which has exercised its right to Cash
Settlement, in accordance with Section 5.4.

Section 5.9. Early Settlement.

            (a) Unless a Holder has effected a Merger Early Settlement of the
related Purchase Contract pursuant to Section 5.10 or a Termination Event shall
have occurred pursuant to Section 5.7, subject to and upon compliance with the
provisions of this Section 5.9, at the option of the Holder thereof, Purchase
Contracts relating to PIES may be settled early ("Early Settlement") at any time
prior to the eighth Business Day preceding the Purchase Contract Settlement Date
except during an Active Remarketing Period. In order to exercise the right to
effect Early Settlement with respect to any Purchase Contracts, the Holder of
the Certificate evidencing PIES shall deliver such Certificate to the Purchase
Contract Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early on the reverse
thereof duly completed and accompanied by payment (payable to the Company in
immediately available funds) in an amount (the "Early Settlement Amount") equal
to:

            (1) the product of (A) the Stated Amount times (B) the number of
      Purchase Contracts with respect to which the Holder has elected to effect
      Early Settlement; plus

            (2) if such delivery is made with respect to any Purchase Contracts
      during the period from the close of business on any Record Date next
      preceding any Payment Date to the opening of business on such Payment
      Date, an amount equal to the Purchase Contract Adjustment Payments payable
      on such Payment Date with respect to such Purchase Contracts.

Except as provided in the immediately preceding sentence and subject to the last
paragraph of Section 5.2, no payment shall be made upon Early Settlement of any
Purchase Contract on account of any Purchase Contract Adjustment Payments
accrued on such Purchase Contract or on account of any dividends on the Common
Stock issued upon such Early Settlement. If the foregoing requirements are first
satisfied with respect to Purchase Contracts relating to any PIES at or prior to
5:00 p.m. (New York City time), on a Business Day, such day shall be the "Early
Settlement Date" with respect to such PIES and if such requirements are first
satisfied after 5:00

<PAGE>

                                                                              49

p.m. (New York City time), on a Business Day or on a day that is not a Business
Day, the "Early Settlement Date" with respect to such PIES shall be the next
succeeding Business Day.

            Upon the receipt of such Certificate and Early Settlement Amount
from the Holder, the Purchase Contract Agent shall pay to the Company such Early
Settlement Amount, the receipt of which payment the Company shall confirm in
writing. The Purchase Contract Agent shall then, in accordance with Section 5.6
of the Pledge Agreement, notify the Collateral Agent that (A) such Holder has
elected to effect an Early Settlement, which notice shall set forth the number
of such Purchase Contracts as to which such Holder has elected to effect Early
Settlement, (B) 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 Amount and (C) all conditions to such Early Settlement have been
satisfied.

            (b) Upon Early Settlement of Purchase Contracts by a Holder of the
related PIES, the Company shall issue, and the Holder shall be entitled to
receive, for each 20 Corporate PIES or 20 Treasury PIES surrendered, 60.168
(which is the product of 3.0084 multiplied by 20) shares of Common Stock,
subject to adjustment in the same manner and at the same time as the Settlement
Rate is adjusted pursuant to Section 5.5, on account of each Purchase Contract
as to which Early Settlement is effected (the "Early Settlement Rate").

            (c) No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:

            (1) the shares of Common Stock issuable upon Early Settlement of the
      related Purchase Contracts to be issued and delivered pursuant to Section
      5.4, together with payment in lieu of any fraction of a share, as provided
      in Section 5.12; and

            (2) the related Senior Notes, in the case of Corporate PIES, or the
      related Treasury Securities, in the case of Treasury PIES, to be released
      from the Pledge by the Collateral Agent and transferred, in each case, to
      the Purchase Contract Agent for delivery to the Holder thereof or its
      designee.

            (d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt by the Common Stock Transfer Agent of shares of Common Stock from the
Company and receipt by the Purchase Contract Agent of the related Senior Notes,
or Treasury Securities, as the case may be, from the Securities Intermediary, as
applicable, the Common Stock Transfer Agent shall, in accordance with the
instructions provided by the Holder thereof on the applicable form of Election
to Settle Early on the reverse of the Certificate evidencing the related PIES as
forwarded by the Purchase Contract Agent to the Common Stock Transfer Agent,
deliver to such Holder a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement of the related
Purchase Contract, pursuant to Section 5.4 and the Purchase Contract Agent shall
transfer to such Holder the related Senior Notes or Treasury Securities, as the
case may be, forming a part of such PIES.

            (e) In the event that Early Settlement is effected with respect to
Purchase Contracts relating to less than all the PIES evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf

<PAGE>

                                                                              50

of the Holder, authenticate and deliver to the Holder thereof, at the expense of
the Company, a Certificate evidencing the PIES as to which Early Settlement was
not effected.

            (f) Notwithstanding anything to the contrary contained herein,
Holders may make effect Early Settlement of Corporate PIES or Treasury PIES only
in integral multiples of 20.

Section 5.10. Early Settlement Upon Merger.

            (a) In the event of a merger or consolidation of the Company (which
for purposes of this Section 5.10 includes any successor company pursuant to a
Cash Merger (as defined below)) in which the Common Stock outstanding
immediately prior to such merger or consolidation is exchanged for consideration
consisting of at least 30% cash or cash equivalents (any such event a "Cash
Merger" and the date on which the Cash Merger takes place being referred to as a
"Cash Merger Date"), then the Company (or the successor to the Company
hereunder) shall be required to offer the Holder of each Outstanding PIES the
right to settle the Purchase Contract relating to such PIES prior to the
Purchase Contract Settlement Date (such early settlement, "Merger Early
Settlement") as provided herein. On or before the fifth Business Day after the
consummation of a Cash Merger, the Company or, at the request and expense of the
Company, the Purchase Contract Agent, shall give all Holders notice of the
occurrence of the Cash Merger and of the right of Merger Early Settlement
arising as a result thereof. The Company shall also deliver a copy of such
notice to the Purchase Contract Agent and the Collateral Agent.

            Each such notice shall contain:

            (i) the date, which shall be not less than 20 Business Days nor more
than 30 Business Days after the date of such notice, on which the Merger Early
Settlement may be effected (the "Merger Early Settlement Date");

            (ii) the date, which shall be three Business Days prior to the
Merger Early Settlement Date, by which the Merger Early Settlement right must be
exercised by notice by the Holders to the Purchase Contract Agent and the
Company;

            (iii) the Settlement Rate in effect as a result of such Cash Merger
and the kind and amount of securities, cash and other property receivable by the
Holder upon settlement of each Purchase Contract pursuant to Section 5.5(b);

            (iv) a statement to the effect that all or a portion of the Purchase
Price payable by the Holder to settle the Purchase Contract will be offset
against the amount of cash so receivable upon exercise of Merger Early
Settlement, as applicable; and

            (v) the instructions a Holder must follow to exercise the Merger
Early Settlement right.

            (b) To exercise a Merger Early Settlement right, a Holder must (i)
deliver to the Purchase Contract Agent at the Corporate Trust Office at least
three Business Days before the Merger Settlement Date, at 5:00 p.m. (New York
City time), the Certificate(s) evidencing the PIES with respect to which the
Merger Early Settlement right is being exercised, duly endorsed

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                                                                              51

for transfer to the Company or in blank with the form of Election to Settle
Early on the reverse thereof duly completed and (ii) make payment (payable to
the Company in immediately available funds in an amount equal to the Early
Settlement Amount less the amount of cash that otherwise would be deliverable by
the Company upon settlement of the Purchase Contract in lieu of Common Stock
pursuant to Section 5.5(b) and as described in the notice to Holders (the
"Merger Early Settlement Amount").

            (c) On the Merger Early Settlement Date, the Company shall cause to
be delivered (i) the net cash, securities and other property to be received by
such exercising Holder, equal to the Settlement Rate as adjusted pursuant to
Section 5.5, in respect of the number of Purchase Contracts for which such
Merger Early Settlement right was exercised pursuant to the applicable
instructions contained in Section 5.4(b), (ii) the Company shall cause the
number of shares of Common Stock issuable upon Merger Early Settlement, if any,
of the related Purchase Contracts pursuant to Section 5.4, together with any
payment in lieu of any fraction of a share, as provided in Section 5.12, to the
Holder which has exercised its right to Cash Settlement, in accordance with
Section 5.4 and (iii) the related Pledged Senior Notes, or if substituted
therefor, the Pledged Treasury Portfolio Interest, in the case of Corporate
PIES, or Pledged Treasury Securities, in the case of Treasury PIES, to be
released from the Pledge by the Collateral Agent and transferred, in each case,
to the Purchase Contract Agent for delivery to the Holder thereof or its
designee. In the event a Merger Early Settlement right shall be exercised by a
Holder in accordance with the terms hereof, all references herein to Purchase
Contract Settlement Date shall be deemed to refer to such Merger Early
Settlement Date.

            (d) Upon Merger Early Settlement of any Purchase Contracts, and
subject to receipt of such net cash, securities or other property from the
Company and the Pledged Senior Notes, Pledged Treasury Portfolio Interest or
Pledged Treasury Securities, as the case may be, from the Collateral Agent, the
Purchase Contract Agent shall, in accordance with the instructions provided by
the Holder thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related PIES, (i) transfer to the
Holder the Pledged Senior Notes, Pledged Treasury Portfolio Interest or Pledged
Treasury Securities, as the case may be, forming a part of such PIES, and (ii)
deliver to the Holder such net cash, securities or other property issuable upon
such Merger Early Settlement together with payment in lieu of any fraction of a
share, as provided in Section 5.12.

            (e) In the event that Merger Early Settlement is effected with
respect to Purchase Contracts relating to less than all the PIES evidenced by a
Certificate, upon such Merger Early Settlement the Company (or the successor to
the Company hereunder) shall execute and the Purchase Contract Agent shall
authenticate, countersign and deliver to the Holder thereof, at the expense of
the Company, a Certificate evidencing the PIES as to which Merger Early
Settlement was not effected.

            (f) Notwithstanding anything to the contrary contained herein,
Holders may effect Merger Early Settlement of Corporate PIES or Treasury PIES
only in integral multiples of 20.

Section 5.11. Optional Remarketing.

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                                                                              52

            Pursuant to the Indenture and the Remarketing Agreement, holders of
Separated Senior Notes may elect to have such Separated Senior Note remarketed
if such holder, on or prior to the second Business Day, but no earlier than the
fifth Business Day, preceding the first of the three sequential remarketing
dates of any Three-Day Remarketing Period, delivers (a) to the Trustee and the
Collateral Agent a notice of that election, substantially in the form of Exhibit
B of the Indenture Officers' Certificate and Exhibit F of the Pledge Agreement,
respectively, specifying the aggregate principal amount of Senior Notes to be
remarketed, and (b) such Separated Senior Notes, by book-entry transfer or other
appropriate procedures, to the Collateral Agent for Remarketing, in each case,
pursuant to the Indenture. Once the holder of such Separated Senior Notes
delivers such notice and Separated Senior Notes as specified in the preceding
sentence, such election may not be withdrawn and may not be conditioned upon 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 holder's Separated Senior
Notes shall be included in the Remarketing.

Section 5.12. No Fractional Shares.

            No fractional shares or scrip representing fractional shares of
Common Stock shall be issued or delivered upon settlement on the Purchase
Contract Settlement Date or upon Early Settlement or Merger Early Settlement of
any Purchase Contracts. If Certificates evidencing more than one Purchase
Contract shall be surrendered for settlement at one time by the same Holder, the
number of full shares of Common Stock which shall be delivered upon settlement
shall be computed on the basis of the aggregate number of Purchase Contracts
evidenced by the Certificates so surrendered. Instead of any fractional share of
Common Stock which would otherwise be deliverable upon settlement of any
Purchase Contracts on the Purchase Contract Settlement Date or upon Early
Settlement or Merger Early Settlement, the Company, through the Purchase
Contract Agent, shall make a cash payment in respect of such fractional interest
in an amount equal to the value of such fractional shares times the Applicable
Closing Price. The Company shall provide the Purchase Contract Agent from time
to time with sufficient funds to permit the Purchase Contract Agent to make all
cash payments required by this Section 5.12 in a timely manner. Promptly after
the calculation of the Applicable Closing Price, the Company shall give the
Purchase Contract Agent notice thereof. All calculations and determinations of
the Applicable Closing Price shall be made by the Company or its agent and the
Purchase Contract Agent shall have no responsibility with respect thereto.

Section 5.13. Charges and Taxes.

            The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common Stock
pursuant to the Purchase Contracts; provided, however, that the Company shall
not be required to pay any such tax or taxes which may be payable in respect of
any exchange of or substitution for a Certificate evidencing a PIES or any
issuance of a share of Common Stock in a name other than that of the registered
Holder of a Certificate surrendered in respect of the PIES evidenced thereby,
other than in the name of the Purchase Contract Agent, as custodian for such
Holder, and the Company shall not be required to issue or deliver such share
certificates or Certificates unless the Person or Persons requesting the
transfer or issuance thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.

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                                                                              53

                                   ARTICLE VI

                                    REMEDIES

Section 6.1. Unconditional Right of Holders to Receive Purchase Contract
Adjustment Payments and to Purchase Shares of Common Stock.

            Each Holder of Corporate PIES or Treasury PIES shall have the right,
which is absolute and unconditional, (1) (subject to the payment by such Holder
of Purchase Contract Adjustment Payments pursuant to Section 5.9(a)), to receive
each Purchase Contract Adjustment Payment with respect to the Purchase Contract
constituting a part of such PIES on the respective Payment Date for such PIES
and (2) to purchase shares of Common Stock pursuant to such Purchase Contract
and, in each such case, to institute suit for the enforcement of any such
Purchase Contract Adjustment Payment and right to purchase shares of Common
Stock, and such rights shall not be impaired without the consent of such Holder.

Section 6.2. Restoration of Rights and Remedies.

            If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.

Section 6.3. Rights and Remedies Cumulative.

            Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or reserved
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 6.4. Delay or Omission Not Waiver.

            No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver of
any such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.

Section 6.5. Undertaking for Costs.

            All parties to this Agreement agree, and each Holder of Corporate
PIES or Treasury PIES, by its acceptance of such Corporate PIES or Treasury
PIES, shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any

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                                                                              54

right or remedy under this Agreement, or in any suit against the Purchase
Contract Agent for any action taken, suffered or omitted by it as Purchase
Contract Agent, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against any
party litigant in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided that the provisions
of this Section shall not apply to any suit instituted by the Company, to any
suit instituted by the Purchase Contract Agent, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% of the
Outstanding PIES, or to any suit instituted by any Holder for the enforcement of
interest payable on any Senior Notes or Purchase Contract Adjustment Payments on
any Purchase Contract on or after the respective Payment Date therefor in
respect of any PIES held by such Holder, or for enforcement of the right to
purchase shares of Common Stock under the Purchase Contracts constituting part
of any PIES held by such Holder.

Section 6.6. Waiver of Stay or Extension Laws.

            The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company expressly waives (to the
extent that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Purchase Contract Agent or the Holders, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

                                   ARTICLE VII

                           THE PURCHASE CONTRACT AGENT

Section 7.1. Certain Duties and Responsibilities.

            (a) The Purchase Contract Agent:

            (1) undertakes to perform, with respect to the PIES, such duties and
      only such duties as are specifically set forth in this Agreement and the
      Pledge Agreement, and no implied covenants or obligations shall be read
      into this Agreement or the Pledge Agreement against the Purchase Contract
      Agent; and

            (2) in the absence of bad faith on its part, may conclusively rely,
      as to the truth of the statements and the correctness of the opinions
      expressed therein, upon certificates or opinions furnished to the Purchase
      Contract Agent and conforming to the requirements of this Agreement or the
      Pledge Agreement, as applicable, but in the case of any certificates or
      opinions which by any provision hereof are specifically required to be
      furnished to the Purchase Contract Agent, the Purchase Contract Agent
      shall be under a duty to examine the same to determine whether or not they
      conform to the requirements of this Agreement or the Pledge Agreement, as
      applicable, but shall have no duty to

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                                                                              55

      confirm or investigate the accuracy of mathematical calculations or other
      facts stated therein.

            (b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its own
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:

            (1) this Subsection shall not be construed to limit the effect of
      Subsection (a) of this Section;

            (2) the Purchase Contract Agent shall not be liable for any error of
      judgment made in good faith by a Responsible Officer, unless it shall be
      proved that the Purchase Contract Agent was grossly negligent in
      ascertaining the pertinent facts; and

            (3) no provision of this Agreement or the Pledge Agreement shall
      require the Purchase Contract Agent to expend or risk its own funds or
      otherwise incur any financial liability in the performance of any of its
      duties hereunder, or in the exercise of any of its rights or powers.

            (c) Whether or not therein expressly so provided, every provision of
this Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.

            (d) The Purchase Contract Agent is authorized to execute and deliver
the Pledge Agreement in its capacity as Purchase Contract Agent. The Purchase
Contract Agent shall be entitled to all of the rights, privileges, immunities
and indemnities contained in this Agreement with respect to any duties of the
Purchase Contract Agent under, or actions taken, omitted to be taken or suffered
by the Purchase Contract Agent pursuant to the Pledge Agreement.

Section 7.2. Notice of Default.

            Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of PIES, as their names and addresses appear in the
Register, notice of such default hereunder, unless such default shall have been
cured or waived.

Section 7.3. Certain Rights of Purchase Contract Agent.

            Subject to the provisions of Section 7.1:

            (1) the Purchase Contract Agent may conclusively rely and shall be
      fully protected in acting or refraining from acting upon any resolution,
      certificate, statement, instrument, opinion, report, notice, request,
      direction, consent, order, bond, debenture, note, other evidence of
      indebtedness or other paper or document believed by it to be genuine and
      to have been signed or presented by the proper party or parties;

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                                                                              56

            (2) any request or direction of the Company mentioned herein shall
      be sufficiently evidenced by an Officers' Certificate, Issuer Order or
      Issuer Request, and any resolution of the Board of Directors of the
      Company may be sufficiently evidenced by a Board Resolution;

            (3) whenever in the administration of this Agreement or the Pledge
      Agreement the Purchase Contract Agent shall deem it desirable that a
      matter be proved or established prior to taking, suffering or omitting any
      action hereunder, the Purchase Contract Agent (unless other evidence be
      herein specifically prescribed) may, in the absence of bad faith on its
      part, conclusively rely upon an Officers' Certificate of the Company;

            (4) the Purchase Contract Agent may consult with counsel of its
      selection and the advice of such counsel or any Opinion of Counsel shall
      be full and complete authorization and protection in respect of any action
      taken, suffered or omitted by it hereunder in good faith and in reliance
      thereon;

            (5) the Purchase Contract Agent shall not be bound to make any
      investigation into the facts or matters stated in any resolution,
      certificate, statement, instrument, opinion, report, notice, request,
      direction, consent, order, bond, debenture, note, other evidence of
      indebtedness or other paper or document, but the Purchase Contract Agent,
      in its discretion, may make reasonable further inquiry or investigation
      into such facts or matters related to the execution, delivery and
      performance of the Purchase Contracts as it may see fit, and, if the
      Purchase Contract Agent shall determine to make such further inquiry or
      investigation, it shall be given a reasonable opportunity to examine the
      books, records and premises of the Company, personally or by agent or
      attorney;

            (6) the Purchase Contract Agent may execute any of the powers
      hereunder or perform any duties hereunder either directly or by or through
      agents or attorneys or an Affiliate and the Purchase Contract Agent shall
      not be responsible for any misconduct or negligence on the part of any
      agent or attorney or an Affiliate appointed with due care by it hereunder;

            (7) the rights, privileges, protections, immunities and benefits
      given to the Purchase Contract Agent, including, but not limited to, its
      right to be indemnified, are extended to, and shall be enforceable by, the
      Purchase Contract Agent in each of its capacities hereunder, and to each
      Purchase Contract Agent, custodian and other Person employed to act
      hereunder;

            (8) the Purchase Contract Agent shall not be liable for any action
      taken, suffered or omitted by it in good faith and believed by it to be
      authorized or within the discretion or rights or powers conferred upon it
      by this Agreement;

            (9) the Purchase Contract Agent shall not be charged with knowledge
      of any default by the Company hereunder unless a Responsible Officer of
      the Purchase Contract Agent shall have received at the Corporate Trust
      Office of the Purchase Contract Agent written notice of such default;

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                                                                              57

            (10) the permissive right of the Purchase Contract Agent to do
      things enumerated in this Agreement shall not be construed as a duty;

            (11) in no event shall the Purchase Contract Agent be liable for any
      consequential, punitive, indirect or special loss or damages of any kind
      whatsoever (including but not limited to lost profit), even if the
      Purchase Contract Agent has been advised of the likelihood of such loss or
      damage and regardless of the form of action;

            (12) the Purchase Contract Agent shall not be responsible or liable
      for any failure or delay in the performance of its obligations under this
      Agreement arising out of or caused directly or indirectly, by
      circumstances beyond its reasonable control, including without limitation,
      acts of God; earthquake; fires; floods; wars; civil or military
      disturbances; terrorist acts; sabotage; epidemics; riots; interruptions,
      loss or malfunctions of utilities, computer (hardware or software) or
      communications service; accidents; labor disputes; and acts of civil or
      military authority or governmental actions; it being understood that the
      Purchase Contract Agent shall use reasonable efforts which are consistent
      with accepted practices in the banking industry to resume performance as
      soon as practicable under the circumstances; and

            (13) the Purchase Contract Agent may request that the Company
      deliver a certificate setting forth the names of individuals and/or titles
      of officers authorized at such time to take specified action pursuant to
      this Agreement, which certificate may be signed by any person authorized
      to sign an Officers' Certificate, including any person specified as so
      authorized in any such certificate previously delivered and not
      superseded.

Section 7.4. Not Responsible for Recitals or Issuance of PIES.

            The recitals contained herein and in the Certificates shall be taken
as the statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the PIES, or of the Pledge Agreement or the Pledge. The Purchase Contract Agent
shall not be accountable for the use or application by the Company of the
proceeds in respect of the PIES or the Purchase Contracts and shall not be
responsible for the perfection, priority or maintenance of any security interest
created or intended to be created under the Pledge Agreement.

Section 7.5. May Hold PIES.

            Any Registrar or any other agent of the Company, or the Purchase
Contract Agent and its Affiliates, in their individual or any other capacity,
may become the owner or pledgee of PIES and may otherwise deal with the Company,
the Collateral Agent or any other Person with the same rights it would have if
it were not Registrar or such other agent, or the Purchase Contract Agent.

Section 7.6. Money Held in Custody.

            Money held by the Purchase Contract Agent in custody hereunder need
not be segregated from the other funds except to the extent required by law or
provided herein. The

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                                                                              58

Purchase Contract Agent shall be under no obligation to invest or pay interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company.

Section 7.7. Compensation and Reimbursement.

            The Company agrees:

            (1) to pay to the Purchase Contract Agent compensation for all
      services rendered by it hereunder and under the Pledge Agreement as the
      Company and the Purchase Contact Agent shall from time to time agree;

            (2) except as otherwise expressly provided for herein, to reimburse
      the Purchase Contract Agent upon its request for all reasonable expenses,
      disbursements and advances incurred or made by the Purchase Contract Agent
      in accordance with any provision of this Agreement and the Pledge
      Agreement (including the reasonable compensation and the expenses and
      disbursements of its agents and counsel), except any such expense,
      disbursement or advance as may be attributable to its gross negligence or
      willful misconduct; and

            (3) to indemnify the Purchase Contract Agent and any predecessor
      Purchase Contract Agent for, and to hold it harmless against, any loss,
      liability or expense, including taxes (other than taxes based upon,
      measured by or determined by the income of the Purchase Contract Agent),
      incurred without gross negligence or willful misconduct on its part,
      arising out of or in connection with the acceptance or administration of
      its duties hereunder, including the costs and expenses of defending itself
      against any such claim or liability in connection with the exercise or
      performance of any of its powers or duties hereunder.

            For purposes of this Section 7.7, "Purchase Contract Agent" shall
include any predecessor Purchase Contract Agent; provided, however, that the
negligence, bad faith or willful misconduct of any Purchase Contract Agent
hereunder shall not affect the rights of any other Purchase Contract Agent
hereunder.

            The provisions of this Section 7.7 shall survive the termination of
this Agreement, the satisfaction or discharge of the PIES and/or the Separated
Senior Notes and/or the resignation or removal of the Purchase Contract Agent.

Section 7.8. Corporate Purchase Contract Agent Required; Eligibility.

            There shall at all times be a Purchase Contract Agent hereunder
which shall be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having (or being
a member of a bank holding company having) a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority and having a corporate trust office in the Borough of Manhattan, The
City of New York, if there be such a corporation in the Borough of Manhattan,
The City of New York, eligible under this Article and willing to act on
reasonable terms. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising

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                                                                              59

or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Purchase Contract Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.

Section 7.9. Resignation and Removal; Appointment of Successor.

            (a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.

            (b) The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date of
such resignation. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section 7.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of
resignation, the resigning Purchase Contract Agent may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.

            (c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding PIES delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchaser Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after such removal, the
Purchase Contract Agent being removed may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.

            (d) If at any time:

            (1) the Purchase Contract Agent shall cease to be eligible under
      Section 7.8 and shall fail to resign after written request therefor by the
      Company or by any such Holder; or

            (2) the Purchase Contract Agent shall become incapable of acting or
      shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
      Contract Agent or of its property shall be appointed or any public officer
      shall take charge or control of the Purchase Contract Agent or of its
      property or affairs for the purpose of rehabilitation, conservation or
      liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
PIES for at least six months may, on behalf of himself and all others similarly
situated, petition, at the expense of the Company, any court of competent
jurisdiction for the removal of the Purchase Contract Agent and the appointment
of a successor Purchase Contract Agent.

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                                                                              60

            (e) If the Purchase Contract Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Purchase Contract Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Purchase Contract Agent
shall have been so appointed by the Company and accepted appointment in the
manner required by Section 7.10, any Holder who has been a bona fide Holder of a
PIES for at least six months may, on behalf of itself and all others similarly
situated, petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.

            (f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Register. Each notice shall include the name of the successor Purchase Contract
Agent and the address of its Corporate Trust Office.

Section 7.10. Acceptance of Appointment by Successor.

            (a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Purchase
Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become
effective and such successor Purchase Contract Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Purchase Contract Agent; but, on the request of the
Company or the successor Purchase Contract Agent, such retiring Purchase
Contract Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and shall duly
assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.

            (b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph (a) of this Section.

            (c) No successor Purchase Contract Agent shall accept its
appointment unless at the time of such acceptance such successor Purchase
Contract Agent shall be eligible under this Article.

Section 7.11. Merger, Conversion, Consolidation or Succession to Business.

            Any Person into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Purchase Contract Agent shall
be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Purchase Contract Agent, shall be the

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                                                                              61

successor of the Purchase Contract Agent hereunder, provided such Person shall
be otherwise eligible under this Article, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case any
Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor to such Purchase Contract Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and executed with the
same effect as if such successor Purchase Contract Agent had itself
authenticated and executed such PIES.

Section 7.12. Preservation of Information; Communications to Holders.

            (a) The Purchase Contract Agent shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Registrar.

            (b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Purchase Contract Agent, and furnish to the Purchase
Contract Agent reasonable proof that each such applicant has owned a PIES for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the PIES and is by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Purchase Contract Agent shall mail to all the Holders
copies of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Purchase Contract
Agent of the materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.

Section 7.13. No Obligations of Purchase Contract Agent.

            Except to the extent otherwise expressly provided in this Agreement,
the Purchase Contract Agent assumes no obligations and shall not be subject to
any liability under this Agreement, the Pledge Agreement or any Purchase
Contract in respect of the obligations of the Holder of any PIES thereunder. The
Company agrees, and each Holder of a Certificate, by his acceptance thereof,
shall be deemed to have agreed, that the Purchase Contract Agent's execution of
the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof. Anything
contained in this Agreement to the contrary notwithstanding, in no event shall
the Purchase Contract Agent or its officers, employees or agents be liable for
indirect, special, punitive, or consequential loss or damage of any kind
whatsoever, including, but not limited to, lost profits, whether or not the
likelihood of such loss or damage was known to the Purchase Contract Agent and
regardless of the form of action.

Section 7.14. Tax Compliance.

            (a) The Company will comply with all applicable certification,
information reporting and withholding (including "backup" withholding)
requirements imposed by applicable tax laws, regulations or administrative
practice with respect to (i) any payments made with respect to the PIES or (ii)
the issuance, delivery, holding, transfer, redemption or exercise of

<PAGE>

                                                                              62

rights under the PIES. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely payment of all
amounts required to be withheld to the appropriate taxing authority or its
designated agent.

            (b) The Purchase Contract Agent shall comply in accordance with the
terms hereof with any reasonable written direction received from the Company
with respect to the execution or certification of any required documentation and
the application of such requirements to particular payments or Holders or in
other particular circumstances, and may for purposes of this Agreement
conclusively rely on any such direction in accordance with the provisions of
Section 7.1(a)(2) hereof.

            (c) The Purchase Contract Agent shall maintain all appropriate
records documenting compliance with such requirements, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such request.

                                  ARTICLE VIII

                             SUPPLEMENTAL AGREEMENTS

Section 8.1. Supplemental Agreements Without Consent of Holders.

            Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Purchase Contract Agent, at any time and from time
to time, may enter into one or more agreements supplemental hereto, in form
satisfactory to the Company and the Purchase Contract Agent, to:

            (1) evidence the succession of another Person to the Company, and
      the assumption by any such successor of the covenants of the Company
      herein and in the Certificates;

            (2) evidence and provide for the acceptance of appointment hereunder
      by a successor 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;

            (4) make provision with respect to the rights of Holders pursuant to
      the requirements of Section 5.5(b); or

            (5) except as provided for in Section 5.5, cure any ambiguity,
      correct or supplement any provisions herein which may be inconsistent with
      any other provisions herein, or 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 8.2. Supplemental Agreements With Consent of Holders.

<PAGE>

                                                                              63

            With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Purchase Contract Agent, the Company,
when authorized by a Board Resolution, and the Purchase Contract Agent may enter
into an agreement or agreements supplemental hereto for the purpose of modifying
in any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the PIES; provided,
however, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous consent of the Holders of each outstanding Purchase
Contract affected thereby, other than as expressly contemplated by this
Agreement,

            (1) change any Payment Date;

            (2) change the amount or the type of Collateral required to be
      Pledged to secure a Holder's obligations under the Purchase Contract,
      impair the right of the Holder of any Purchase Contract to receive
      distributions on the related Collateral or otherwise adversely affect the
      Holder's rights in or to such Collateral;

            (3) reduce Purchase Contract Adjustment Payments or change any place
      where, or the coin or currency in which, Purchase Contract Adjustment
      Payments are payable;

            (4) impair the right to institute suit for the enforcement of any
      Purchase Contract;

            (5) reduce the number of shares of Common Stock to be purchased
      pursuant to any Purchase Contract, increase the price to purchase shares
      of Common Stock upon settlement of any Purchase Contract, change the
      Purchase Contract Settlement Date or otherwise adversely affect the
      Holder's rights under any Purchase Contract; or

            (6) reduce the percentage of the outstanding Purchase Contracts the
      consent of whose Holders is required for any such supplemental agreement,

provided that, if any amendment or proposal referred to above would adversely
affect only the Corporate PIES or the Treasury PIES after securities of such
class are created and remain Outstanding, then only the affected class of Holder
as of the record date, if any, for the Holders entitled to vote thereon or
consent thereto will be entitled to vote or consent on such amendment or
proposal, and such amendment or proposal shall not be effective except with the
vote or consent of Holders of not less than a majority of such class; and
provided, further, that the unanimous consent of the Holders of each outstanding
Purchase Contract of the related Corporate PIES or Treasury PIES, as the case
may be, shall be required to approve any amendment or proposal specified in
clauses (1) through (6) above.

            It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental agreement, but it
shall be sufficient if such Act shall approve the substance thereof.

Section 8.3. Execution of Supplemental Agreements.

<PAGE>

                                                                              64

            In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
entitled to receive, and (subject to Section 7.1) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement. The
Purchase Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.

Section 8.4. Effect of Supplemental Agreements.

            Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement 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 hereunder, shall be bound thereby.

Section 8.5. Reference to Supplemental Agreements.

            Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent as to any matter
provided for in such supplemental agreement. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Purchase
Contract Agent and the Company, to any such supplemental agreement may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in exchange for
Outstanding Certificates.

                                   ARTICLE IX

                    MERGER, CONSOLIDATION SALE OR CONVEYANCE

Section 9.1. 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 Purchase Contract Agent, all the
obligations of the Company with respect to the PIES and 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 or under any of the PIES. The Company shall deliver to
the Purchase Contract 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,

<PAGE>

                                                                              65

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 9.2. 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 9.1, 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 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 9.3. 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.

                                    ARTICLE X

                                    COVENANTS

Section 10.1. Performance Under Purchase Contracts.

<PAGE>

                                                                              66

            The Company covenants and agrees for the benefit of the Holders from
time to time of the PIES that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.

Section 10.2. Maintenance of Office or Agency.

            The Company will maintain in the Borough of Manhattan, The City of
New York an office or agency where Certificates may be:

            (1) presented or surrendered for acquisition of shares of Common
      Stock upon settlement of the Purchase Contracts on the Purchase Contract
      Settlement Date or Early Settlement and for transfer of Collateral upon
      occurrence of a Termination Event;

            (2) surrendered for registration of transfer or exchange, for a
      Collateral Substitution or re-establishment of a Corporate PIES; and

and where notices and demands to or upon the Company in respect of the PIES and
this Agreement may be served. The Company will give prompt written notice to the
Purchase Contract Agent of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Purchase Contract Agent
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Company hereby
appoints the Purchase Contract Agent as its agent to receive all such
presentations, surrenders, notices and demands.

            The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Purchase Contract Agent of any such
designation or rescission and of any change in the location of any such other
office or agency. The Company hereby designates as the place of payment for the
PIES the Corporate Trust Office and appoints the Purchase Contract Agent at its
Corporate Trust Office as paying agent in such city.

Section 10.3. Company to Reserve Common Stock.

            The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued shares of Common Stock the maximum number of shares
of Common Stock issuable against tender of payment in respect of all Purchase
Contracts constituting a part of the PIES evidenced by Outstanding Certificates.

Section 10.4. Covenants as to Common Stock.

            The Company covenants that all shares of Common Stock which will be
issued against tender of payment in respect of Purchase Contracts constituting a
part of the Outstanding

<PAGE>

                                                                              67

PIES will, upon issuance as contemplated herein, be duly authorized, validly
issued, fully paid and nonassessable.

Section 10.5. Statements of Officers of the Company as to Default.

            The Company will deliver to the Purchase Contract Agent, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof is December 31) ending after the date hereof, an Officers' Certificate
(one of the signers of which shall be the principal executive officer, principal
financial officer, treasurer or principal accounting officer of the Company),
stating whether or not to the best knowledge of the signers thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions hereof, and if the Company shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge.

Section 10.6. ERISA.

            Each Holder from time to time of the Corporate PIES which is a Plan
hereby represents that its acquisition of the Corporate PIES and the holding of
the same satisfies the applicable fiduciary requirements of ERISA and that it is
entitled to exemption relief from the prohibited transaction provisions of ERISA
and the Code in accordance with one or more prohibited transaction exemptions or
otherwise will not result in a nonexempt prohibited transaction.

<PAGE>

                                                                              68

            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,
                                    as Purchase Contract Agent

                                    By:  _______________________________
                                         Name:
                                         Title:

<PAGE>

                                                                       EXHIBIT A

                   FORM OF FACE OF CORPORATE PIES CERTIFICATE

            [This certificate is a global certificate within the meaning of the
Purchase Contract Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company, a New York corporation (the "Depositary"),
or a nominee of the Depositary. This certificate is exchangeable for
certificates registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Purchase Contract
Agreement and no transfer of this certificate (other than a transfer of this
certificate as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.

            Unless this certificate is presented by an authorized representative
of the Depositary to Sierra Pacific Resources or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as is requested by an authorized
representative of the Depositary (and any payment hereon is made to Cede & Co.
or to such other entity as is requested by an authorized representative of the
Depositary), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein.](1)

NO.: ________                                                         CUSIP NO.
NUMBER OF CORPORATE PIES: _________

                            SIERRA PACIFIC RESOURCES

                                 CORPORATE PIES

            This Corporate PIES Certificate certifies that [Cede & Co.](2), or
registered assigns, is the registered Holder of the number of Corporate PIES set
forth above [or such other number as set forth in the Schedule of Increases and
Decreases in Global Certificate attached hereto] (3). Each Corporate PIES
consists of (i) the rights and obligations of the Holder under one Purchase
Contract with Sierra Pacific Resources, a Nevada corporation (the "Company"),
and (ii) either (a) a 1/20th, or 5%, undivided beneficial ownership by the
Holder of one 7.93% Senior Note due 2007 (the "Senior Note") of the Company,
having a principal amount of $1,000, subject to the Pledge of such Senior Note
by such Holder pursuant to the Pledge Agreement or (b) if the Corporate PIES has
been remarketed by the Remarketing Agents pursuant to the Remarketing

-------------------
(1)   Insert in Global Certificates only.

(2)   Insert in Global Certificates only.

(3)   Insert in Global Certificates only.

<PAGE>

Agreement, the Treasury Portfolio Interest, subject to the Pledge of such
Treasury Portfolio Interest by such Holder pursuant to the Pledge Agreement.

            Pursuant to the Pledge Agreement, the Senior Note or the Treasury
Portfolio Interest, as the case may be, constituting part of each Corporate PIES
evidenced hereby has been pledged to the Collateral Agent, for the benefit of
the Company, to secure the obligations of the Holder under the Purchase Contract
comprising a portion of such Corporate PIES.

            Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate PIES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date, at a price equal to $50 in cash (the "Stated Amount"),
a number of shares of Common Stock equal to the Settlement Rate then in effect,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event, an Early Settlement or a Merger Early Settlement
with respect to the Corporate PIES of which such Purchase Contract is a part,
all as provided in the Purchase Contract Agreement and more fully described on
the reverse hereof. The purchase price (the "Purchase Price") for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of payment received in respect of the principal amount with respect
to each Pledged Senior Note, pursuant to the Remarketing, or with respect to the
Pledged Treasury Portfolio Interest, as the case may be, in each case, pledged
pursuant to the Pledge Agreement to secure the obligations under such Purchase
Contract of the Holder of the Corporate PIES of which such Purchase Contract is
a part.

            The Company shall pay on August 15, 2005 and November 15, 2005
(each, a "Payment Date") in respect of each Purchase Contract forming part of a
Corporate PIES evidenced hereby, an amount (the "Purchase Contract Adjustment
Payments") equal to (a) if a Reset Transaction has not occurred, 1.07% per annum
of the Stated Amount or (b) following the occurrence of a Reset Transaction, if
at all, the Adjusted Purchase Contract Adjustment Payment Rate related to such
Reset Transaction until any such succeeding Reset Transaction shall occur, in
either case, computed on the basis of (i) for any full quarterly period, a
360-day year of twelve 30-day months, (ii) for any period shorter than a full
quarterly period, a 30-day month and (iii) for periods less than a month, the
actual number of days elapsed per 30-day period. Such Purchase Contract
Adjustment Payments shall be payable to the Person in whose name this Corporate
PIES Certificate (or a Predecessor Corporate PIES Certificate) is registered at
the close of business on the Record Date for such Payment Date.

            Interest on the Senior Notes, the beneficial ownership of which is
evidenced hereby until the later of the Remarketing Settlement Date and the
Purchase Contract Settlement Date, as applicable, is payable quarterly in
arrears on each Payment Date or as otherwise set forth in the Senior Notes. Such
interest payments shall be payable to the Person in whose name this Corporate
PIES Certificate (or a Predecessor Corporate PIES Certificate) is registered at
the close of business on the Record Date for such Payment Date.

            If the Remarketing Settlement Date resulting from a Successful
Remarketing is not also a Payment Date, the Collateral Agent will receive on
behalf of the Holders of the Corporate PIES an interest payment from the Company
on such Remarketing Settlement Date on the Senior Notes from the most recent
Payment Date to, but excluding, such Remarketing

                                       A-2
<PAGE>

Settlement Date. On the Payment Date next following the Remarketing Settlement
Date, Holders of the Corporate PIES will receive a regular quarterly cash
distribution comprised of the interest payment payable on that date, (consisting
of the portion of the remarketed Treasury Portfolio that matures prior to that
Payment Date and the cash payment made to the Collateral Agent on the
Remarketing Settlement Date) and the Purchase Contract Adjustment Payment
payable on that date.

            Purchase Contract Adjustment Payments and interest payments on the
Senior Notes will be payable at the office of the Purchase Contract Agent in The
City of New York or, at the option of the Company, by wire transfer or by check
mailed to the address of the Person entitled thereto as such address appears on
the Corporate PIES Register.

            Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.

            Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Corporate PIES Certificate
shall not be entitled to any benefit under the Purchase Contract Agreement or
the Pledge Agreement or be valid or obligatory for any purpose.

            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.

                        SIERRA PACIFIC RESOURCES

                        By: _______________________________
                            Name:
                            Title:

                        HOLDER SPECIFIED ABOVE (as to obligations of such
                        Holder under the Purchase Contracts evidenced hereby)

                        By: THE BANK OF NEW YORK,
                            not individually but solely as Attorney-in-Fact of
                            such Holder

                            By:____________________________
                            Name:
                            Title:

                                       A-3
<PAGE>

                        CERTIFICATE OF AUTHENTICATION OF
                             PURCHASE CONTRACT AGENT

            This is one of the Corporate PIES Certificates referred to in the
within-mentioned Purchase Contract Agreement.

Dated:                      By: THE BANK OF NEW YORK,
                                as Purchase Contract Agent

                                By:____________________________
                                   Authorized Signatory

                                       A-4
<PAGE>

                 (FORM OF REVERSE OF CORPORATE PIES CERTIFICATE)

              1. Purchase Contract Agreement; Purchase Contracts.

            Each Purchase Contract evidenced hereby is being issued under and
governed by a Purchase Contract Agreement, dated as of __________, 2005 (as may
be amended, modified or supplemented from time to time pursuant to the terms
thereof, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder, the
"Purchase Contract Agent"), which Purchase Contract Agreement and amended,
modified or supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the Corporate PIES Certificates are, and are
to be, executed and delivered. The terms of this Corporate PIES Certificate
include those stated herein and in the Purchase Contract Agreement. To the
extent permitted by applicable law, in the event of an inconsistency between
this Corporate PIES Certificate and the Purchase Contract Agreement, the terms
of the Purchase Contract Agreement shall control. Capitalized terms used but not
defined herein have the meanings ascribed thereto in the Purchase Contract
Agreement.

            Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate PIES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock equal to the Settlement Rate then in
effect unless on or prior to the Purchase Contract Settlement Date, there shall
have occurred a Termination Event, an Early Settlement or a Merger Early
Settlement with respect to the PIES of which such Purchase Contract is a part.
The "Settlement Rate" is equal to:

            (1) if the Applicable Closing Price (as defined below) per share is
      equal to or greater than $16.62 (the "Threshold Appreciation Price"),
      3.0084 shares of Common Stock per Purchase Contract;

            (2) if the Applicable Closing Price per share is less than the
      Threshold Appreciation Price but greater than $13.85 (the "Reference
      Price"), the number of shares of Common Stock determined by dividing the
      Stated Amount by the Applicable Closing Price; and

            (3) if the Applicable Closing Price per share is less than or equal
      to the Reference Price, 3.6101 shares of Common Stock per Purchase
      Contract,

in each case subject to adjustment as provided in the Purchase Contract
Agreement.

            No fractional shares of Common Stock will be issued upon settlement
of Purchase Contracts, as provided in the Purchase Contract Agreement.

            In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Corporate PIES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by (i) effecting a Cash Settlement, an Early Settlement or Merger Early
Settlement or (ii) application of payments

                                       A-5
<PAGE>

received in respect of the Pledged Treasury Portfolio Interest acquired from the
proceeds of a Remarketing of the related Pledged Senior Notes relating to the
Corporate PIES represented by this Corporate PIES Certificate. As provided in
the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing and
upon written direction of the Company as provided in the Pledge Agreement, the
Collateral Agent shall 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, 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. With
respect to such Pledged Senior Notes which are the subject of a Failed
Remarketing, any accrued and unpaid interest payments on such Pledged Senior
Notes will become payable by the Company to the Holder of this Corporate PIES
Certificate in the manner provided for in the Purchase Contract Agreement.

            The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates therefor to
the Holder unless it shall have received payment of the aggregate purchase price
for the shares of Common Stock to be purchased thereunder in the manner set
forth in the Purchase Contract Agreement which payment, in the case of a Failed
Remarketing shall occur by the resale of Pledged Senior Notes or foreclosure on
and retention of such Pledged Senior Notes pursuant to the Purchase Contract
Agreement and the Pledge Agreement.

            2. Termination Event; Early Settlement; Merger Early Settlement.

            The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive, and the obligation of the Company to pay, Purchase Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Corporate PIES
Register. Upon the occurrence of a Termination Event, the Collateral Agent shall
release the Senior Notes or Pledged Treasury Portfolio Interest, as the case may
be, from the Pledge in accordance with the provisions of the Pledge Agreement. A
Corporate PIES shall thereafter represent the right to receive the Senior Note
forming a part of such Corporate PIES in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.

            Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
relating to PIES may be settled early ("Early Settlement") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Corporate
PIES Certificate, the Holder of this Corporate PIES Certificate shall deliver
this Corporate PIES Certificate to the Purchase Contract Agent at the Corporate
Trust Office duly endorsed for transfer to the Company or in blank with the form
of Election to Settle Early set

                                       A-6
<PAGE>

forth below duly completed and accompanied by payment in the form of immediately
available funds payable to the order of the Company in an amount (the "Early
Settlement Amount") equal to:

            (1) the product of (A) the Stated Amount times (B) the number of
      Purchase Contracts with respect to which the Holder has elected to effect
      Early Settlement, plus

            (2) if such delivery is made with respect to any Purchase Contracts
      during the period from the close of business on any Record Date for any
      Payment Date to the opening of business on such Payment Date, an amount
      equal to the Purchase Contract Adjustment Payments payable on such Payment
      Date with respect to such Purchase Contracts.

Upon Early Settlement of Purchase Contracts by a Holder of the related PIES, the
Pledged Senior Notes relating to such PIES shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to receive a
number of shares of Common Stock on account of each Purchase Contract forming
part of a Corporate PIES as to which Early Settlement is effected equal to the
Early Settlement Rate. The Early Settlement Rate shall initially be, for each 20
Corporate PIES surrendered, 60.168 (which is the product of 3.0084 multiplied by
20) shares of Common Stock per Purchase Contract and shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as provided
in the Purchase Contract Agreement.

            3. Creation of Treasury PIES; Recreation of Corporate PIES.

            A holder of a Corporate PIES may substitute for the Pledged Senior
Notes securing its obligation under the related Purchase Contract Treasury
Securities in an aggregate principal amount at maturity equal to the aggregate
principal amount of the Pledged Senior Notes in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the PIES for which such Pledged Treasury Securities
secures the Holder's obligation under the Purchase Contract shall be referred to
as a "Treasury PIES." A Holder may make such Collateral Substitution only in
integral multiples of 20 Corporate PIES for 20 Treasury PIES. Such Collateral
Substitution may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, this Corporate PIES
Certificate shall not represent more than 4,704,650 Corporate PIES, or if in the
form of a Global Certificate, such other maximum amount as shall at the time be
prescribed by the applicable Depositary. All such adjustments to the equivalent
aggregate principal amount of this Corporate PIES Certificate if a Global
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule as may be attached hereto.

            A Holder of Treasury PIES may recreate Corporate PIES by delivering
to the Securities Intermediary Senior Notes with an aggregate principal amount
equal to the aggregate principal amount at maturity of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Holders may recreate Corporate PIES only in integral multiples of 20
Corporate PIES.

                                       A-7
<PAGE>

            4. Registered Form; Denomination; Registration, Transfer and
Exchange.

            The Corporate PIES Certificates are issuable only in registered form
and only in denominations of a single Corporate PIES and any integral multiple
thereof. The transfer of any Corporate PIES Certificate will be registered and
Corporate PIES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Corporate PIES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Purchase Contract Agent may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. A Holder who
elects to substitute a Treasury Security for Senior Notes, thereby creating
Treasury PIES, shall be responsible for any fees or expenses payable in
connection therewith. Except as provided in the Purchase Contract Agreement, for
so long as the Purchase Contract relating to a Corporate PIES remains in effect,
such Corporate PIES shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Corporate PIES in respect of the
Senior Note or Treasury Portfolio Interest, as the case may be, and Purchase
Contract constituting such Corporate PIES may be transferred and exchanged only
as a Corporate PIES.

            Upon registration of transfer of this Corporate PIES Certificate,
the transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Corporate PIES Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.

            The Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Corporate PIES Certificate is registered as the owner of the
Corporate PIES evidenced hereby for the purpose of receiving payments of
interest payable quarterly on the Senior Notes or Treasury Portfolio Return, as
the case may be, receiving Purchase Contract Adjustment Payments, performance of
the Purchase Contracts and for all other purposes whatsoever, whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Purchase Contract Agent nor any such
agent shall be affected by notice to the contrary.

            5. Place and Method of Payment.

            The Company shall pay, on each Payment Date, the Purchase Contract
Adjustment Payments payable in respect of each Purchase Contract to the Person
in whose name the Corporate PIES Certificate evidencing such Purchase Contract
is registered at the close of business on the Record Date for such Payment Date.
Purchase Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in The City of New York or, at the option of the Company
by wire transfer or by check mailed to the address of the Person entitled
thereto at such address as it appears on the Corporate PIES Register.

                                       A-8
<PAGE>

            6. Authorization of Purchase Contract Agent.

            The Holder of this Corporate PIES Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Corporate PIES evidenced hereby
on its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Senior Notes or Treasury Portfolio Interest, as
the case may be, relating to this Corporate PIES Certificate pursuant to the
Pledge Agreement. The Holder further covenants and agrees that, to the extent
and in the manner provided in the Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect of the
aggregate principal amount of the Pledged Senior Notes or Pledged Treasury
Portfolio Interest, as the case may be, shall be paid on the Purchase Contract
Settlement Date by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.

            7. Amendment.

            The provisions of the Purchase Contract Agreement and this Corporate
PIES Certificate may be amended only as provided in the Purchase Contract
Agreement.

            8. Voting Rights.

            The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
Upon settlement of the Purchase Contracts, the Holder will be entitled to all of
the rights of a holder of shares of Common Stock, including, without limitation,
the right to vote and receive dividends and other payments and to consent and
receive notice as a shareholder in respect of the meetings of shareholders and
for the election of directors of the Company and for all other matters, and all
other rights whatsoever as a shareholder of the Company. Under the terms of the
Pledge Agreement, the Purchase Contract Agent will be entitled to exercise the
voting and any other consensual rights pertaining to the Pledged Senior Notes
upon behalf of and upon receipt of instructions from the beneficial owners of
such Pledged Senior Notes. Upon receipt of notice of any meeting at which
holders of Senior Notes are entitled to vote or upon the solicitation of
consents, waivers or proxies of holders of Senior Notes, the Purchase Contract
Agent shall, as soon as practicable thereafter, mail to the Corporate PIES
Holders a notice:

            (1) containing such information as is contained in the notice or
      solicitation;

            (2) stating that each Corporate PIES Holder on the record date set
      by the Purchase Contract Agent therefor (which, to the extent possible,
      shall be the same date as the record date for determining the holders of
      Senior Notes entitled to vote) shall be

                                       A-9
<PAGE>

      entitled to instruct the Purchase Contract Agent as to the exercise of the
      voting rights pertaining to the Senior Notes constituting a part of such
      Holder's Corporate PIES; and

            (3) stating the manner in which such instructions may be given.

Upon the written request of the Corporate PIES Holders on such record date, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum aggregate principal amount of Senior Notes as to which any particular
voting instructions are received. In the absence of specific instructions from
the Holder of a Corporate PIES, the Purchase Contract Agent shall abstain from
voting the Senior Notes evidenced by such Corporate PIES.

            9. Severability.

            If any provision in this Corporate PIES and the Senior Notes is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of Corporate PIES shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (ii) the invalidity or unenforceability of any provision of this
Corporate PIES in any jurisdiction shall not in any way affect the validity or
enforceability of such provision in any other jurisdiction.

            10. Governing Law.

            THIS CORPORATE PIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

            11. Jurisdiction; Venue.

            The Company hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to the Indenture and the Senior Notes or
the transactions contemplated hereby. The Company hereto irrevocably waives, to
the fullest extent permitted by applicable law, any objection which it 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.

            12. Copies of Purchase Contract Agreement.

            A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent at its address set
forth in Section 1.5 of the Purchase Contract Agreement.

                                      A-10
<PAGE>

                                  ABBREVIATIONS

            The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:

TEN COM -                   As tenants in common

TEN ENT -                   As tenants by the entireties

JT TEN -                    as joint tenants with right of survivorship and not
                            as tenants in common

UNIF GIFT MIN ACT -         (cust) Custodian (minor) _____________________

                            Under Uniform Gifts to Minors Act of _______________

Additional abbreviations may also be used though not in the above list.

                          ____________________________

  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
                                      unto

________________________________________________________________________________
                            (insert name of assignee)

________________________________________________________________________________
     (insert social security or taxpayer I.D. or other identifying number of
                                    assignee)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
                 (insert address including zip code of assignee)

the within Corporate PIES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ________________________________________
attorney to transfer said Corporate PIES Certificates on the books of Sierra
Pacific Resources with full power of substitution in the premises.

Dated: ___________________        ______________________________________________
                                  Signature

                                  NOTICE: The signature to this assignment must
                                  correspond with the name as it appears upon
                                  the face of the within Corporate PIES
                                  Certificates in every particular, without
                                  alteration or enlargement or any change
                                  whatsoever.

Signature Guarantee: ___________________________________

                                      A-11
<PAGE>

                             SETTLEMENT INSTRUCTIONS

            The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon settlement on the Purchase Contract Settlement
Date of the Purchase Contracts relating to the number of Corporate PIES
evidenced by this Corporate PIES Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned agrees to pay any transfer
tax payable incident thereto.

Dated: _______________________             _____________________________________
                                           Signature

                                           Signature Guarantee:_________________
                                           (if assigned to another person)

                                REGISTERED HOLDER

               Please print name and address of Registered Holder:

________________________________________________________________________________
                                  (insert name)

________________________________________________________________________________
                                (insert address)

________________________________________________________________________________

________________________________________________________________________________
    (insert social security or other taxpayer identification number, if any)

                        ________________________________

 If shares are to be registered in the name of and delivered to a Person other
than the Holder, please (i) print such Person's name and address and (ii)
provide a guarantee of your signature:

________________________________________________________________________________
                                  (insert name)

________________________________________________________________________________
                                (insert address)

________________________________________________________________________________

________________________________________________________________________________
    (insert social security or other taxpayer identification number, if any)

                                      A-12
<PAGE>

                            ELECTION TO SETTLE EARLY

            The undersigned Holder of this Corporate PIES Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Merger Early
Settlement] in accordance with the terms of the Purchase Contract Agreement with
respect to the Purchase Contracts relating to the number of Corporate PIES
evidenced by this Corporate PIES Certificate specified below. The undersigned
Holder directs that a certificate for shares of Common Stock deliverable upon
such [Early Settlement] [Merger Early Settlement] be registered in the name of,
and delivered, together with a check in payment for any fractional share and any
Corporate PIES Certificate representing any Corporate PIES evidenced hereby as
to which [Early Settlement] [Merger Early Settlement] of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Senior
Notes deliverable upon such [Early Settlement] [Merger Early Settlement] will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned agrees to pay any transfer tax payable incident thereto.

                                        ________________________________________
                                                        Signature

                                        Dated:__________________________________

                                        Signature Guarantee:____________________

            Number of PIES evidenced hereby as to which [Early Settlement]
[Merger Early Settlement] of the related Purchase Contracts is being elected:

                                REGISTERED HOLDER

               Please print name and address of Registered Holder:

________________________________________________________________________________
                                  (insert name)

________________________________________________________________________________
                                (insert address)

________________________________________________________________________________

If shares of Common Stock or Corporate PIES Certificates are to be registered in
the name of and delivered to, and Pledged Senior Notes are to be transferred to,
a Person other than the Holder, please print such Person's name and address:

________________________________________________________________________________
                                  (insert name)

________________________________________________________________________________
                                (insert address)

________________________________________________________________________________
    (insert social security or other taxpayer identification number, if any)

Transfer Instructions for Pledged Senior Notes Transferable Upon [Early
Settlement] [Merger Early Settlement]:

                                      A-13
<PAGE>

________________________________________________________________________________

                                      A-14
<PAGE>

                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]

            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

            The following increases or decreases in this Global Certificate have
been made:

<TABLE>
<CAPTION>
                                                                     Number of Corporate PIES
                  Amount of decrease in    Amount of increase in        evidenced by this           Signature of
                   Number of Corporate      Number of Corporate         Global Certificate       authorized signatory
                  PIES evidenced by the    PIES evidenced by the         following such         of Purchase Contract
     Date          Global Certificate       Global Certificate         decrease or increase              Agent
---------------   ---------------------    ---------------------     ------------------------   -----------------------
<S>               <C>                      <C>                       <C>                        <C>
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
---------------   ---------------------    ---------------------     ------------------------   -----------------------
</TABLE>

                                      A-15
<PAGE>

                                                                       EXHIBIT B

                    FORM OF FACE OF TREASURY PIES CERTIFICATE

            [This certificate is a global certificate within the meaning of the
Purchase Contract Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company, a New York corporation (the "Depositary"),
or a nominee of the Depositary. This certificate is exchangeable for
certificates registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Purchase Contract
Agreement and no transfer of this certificate (other than a transfer of this
certificate as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.

            Unless this certificate is presented by an authorized representative
of the Depositary to Sierra Pacific Resources or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as is requested by an authorized
representative of the Depositary (and any payment hereon is made to Cede & Co.
or to such other entity as is requested by an authorized representative of the
Depositary), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein.](1)

NO.: __                                                               CUSIP NO.
NUMBER OF TREASURY PIES: __

                            SIERRA PACIFIC RESOURCES

                                  TREASURY PIES

            This Treasury PIES Certificate certifies that [Cede & Co.](2), or
registered assigns, is the registered Holder of the number of Treasury PIES set
forth above [or such other number as set forth in the Schedule of Increases and
Decreases in Global Certificate attached hereto] (3). Each Treasury PIES
consists of (i) the rights and obligations of the Holder under one Purchase
Contract with Sierra Pacific Resources, a Nevada corporation (the "Company") and
(ii) a 1/20th undivided beneficial ownership interest of a Treasury Security
having a principal amount at maturity equal to $1,000 and maturing on or prior
to November 15, 2005.

            Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Treasury PIES evidenced hereby have been pledged to
the Collateral Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Purchase Contract comprising a portion of such Treasury
PIES.

-------------------
(1)   Insert in Global Certificates only.

(2)   Insert in Global Certificates only.

(3)   Insert in Global Certificates only.

<PAGE>

            Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PIES Certificate to purchase, and the Company, to sell, on the Purchase
Contract Settlement Date, at a price equal to $50 in cash (the "Stated Amount"),
a number of shares of Common Stock equal to the Settlement Rate then in effect,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement or Merger Early Settlement
with respect to the Treasury PIES of which such Purchase Contract is a part, all
as provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price (the "Purchase Price") for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of the proceeds from the Treasury Securities at maturity pledged
pursuant to the Pledge Agreement to secure the obligations under such Purchase
Contract of the Holder of the Treasury PIES of which such Purchase Contract is a
part.

            The Company shall pay on August 15, 2005 and November 15, 2005
(each, a "Payment Date") in respect of each Purchase Contract forming part of
Treasury PIES evidenced hereby, an amount (the "Purchase Contract Adjustment
Payments") equal to (a) if a Reset Transaction has not occurred, 1.07% per annum
of the Stated Amount or (b) following the occurrence of a Reset Transaction, if
at all, the Adjusted Purchase Contract Adjustment Payment Rate related to such
Reset Transaction until any such succeeding Reset Transaction shall occur, in
either case, computed on the basis of (i) for any full quarterly period, a
360-day year of twelve 30-day months, (ii) for any period shorter than a full
quarterly period, a 30-day month and (iii) for periods less than a month, the
actual number of days elapsed per 30-day period). Such Purchase Contract
Adjustment Payments shall be payable to the Person in whose name this Treasury
PIES Certificate (or a Predecessor Treasury PIES Certificate) is registered at
the close of business on the Record Date for such Payment Date.

            Purchase Contract Adjustment Payments will be payable at the office
of the Purchase Contract Agent in The City of New York or, at the option of the
Company, by wire transfer or by check mailed to the address of the Person
entitled thereto as such address appears on the Treasury or PIES Register.

            Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.

            Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Treasury PIES Certificate
shall not be entitled to any benefit under the Purchase Contract Agreement or
the Pledge Agreement or be valid or obligatory for any purpose.

                                       B-2
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.

                           SIERRA PACIFIC RESOURCES

                           By: _______________________________
                               Name:
                               Title:

                           HOLDER SPECIFIED ABOVE (as to obligations of such
                           Holder under the Purchase Contracts evidenced hereby)

                           By: THE BANK OF NEW YORK, not individually but
                               solely as Attorney-in-Fact of such Holder

                               By: _________________________
                                   Name:
                                   Title:

                        CERTIFICATE OF AUTHENTICATION OF
                             PURCHASE CONTRACT AGENT

            This is one of the Treasury PIES Certificates referred to in the
within-mentioned Purchase Contract Agreement.

Dated:                                  By: THE BANK OF NEW YORK,
                                            as Purchase Contract Agent

                                            By:___________________________
                                               Authorized Officer

                                       B-3
<PAGE>

                 (FORM OF REVERSE OF TREASURY PIES CERTIFICATE)

            1. Purchase Contract Agreement; Purchase Contracts.

            Each Purchase Contract evidenced hereby is being issued under and
governed by a Purchase Contract Agreement, dated as of __________, 2005 (as may
be amended, modified or supplemented from time to time pursuant to the terms
thereof, the "Purchase Contract Agreement") between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder, the
"Purchase Contract Agent"), to which the Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Purchase Contract Agent, the Company and the Holders and of
the terms upon which the Treasury PIES Certificates are, and are to be, executed
and delivered. The terms of this Treasury PIES Certificate include those stated
herein and in the Purchase Contract Agreement. To the extent permitted by
applicable law, in the event of an inconsistency between this Treasury PIES
Certificate and the Purchase Contract Agreement, the terms of the Purchase
Contract Agreement shall control. Capitalized terms used but not defined herein
have the meanings ascribed thereto in the Purchase Contract Agreement.

            Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PIES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock equal to the Settlement Rate then in
effect unless on or prior to the Purchase Contract Settlement Date, there shall
have occurred a Termination Event, an Early Settlement or a Merger Early
Settlement with respect to the PIES of which such Purchase Contract is a part.
The "Settlement Rate" is equal to:

            (1) if the Applicable Closing Price (as defined below) per share is
      equal to or greater than $16.62 (the "Threshold Appreciation Price"),
      3.0084 shares of Common Stock per Purchase Contract;

            (2) if the Applicable Closing Price per share is less than the
      Threshold Appreciation Price but greater than $13.85 (the "Reference
      Price"), the number of shares of Common Stock determined by dividing the
      Stated Amount by the Applicable Closing Price; and

            (3) if the Applicable Closing Price per share is less than or equal
      to the Reference Price, then 3.6101 shares of Common Stock per Purchase
      Contract;

in each case subject to adjustment as provided in the Purchase Contract
Agreement.

            No fractional shares of Common Stock will be issued upon settlement
of Purchase Contracts, as provided in the Purchase Contract Agreement.

            In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury PIES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by (i) effecting a Cash Settlement, an Early Settlement or Merger Early
Settlement or (ii) application of payments

                                       B-4
<PAGE>

received in respect of the Pledged Treasury Securities relating to the Treasury
PIES represented by this Treasury PIES Certificate.

            The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates therefor to
the Holder unless it shall have received payment of the aggregate purchase price
for the shares of Common Stock to be purchased thereunder in the manner herein
set forth in the Purchase Contract Agreement.

            2. Termination Event; Early Settlement; Merger Early Settlement.

            The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive, and the obligation of the Company to pay, Purchase Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Treasury PIES
Register. Upon the occurrence of a Termination Event, the Collateral Agent shall
release the Treasury Securities from the Pledge in accordance with the
provisions of the Pledge Agreement. A Treasury PIES shall thereafter represent
the right to receive the interest in the Treasury Security forming a part of
such Treasury PIES, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.

            Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
relating to PIES may be settled early ("Early Settlement") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Treasury
PIES the Holder of this Treasury PIES Certificate shall deliver this Treasury
PIES Certificate to the Purchase Contract Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to:

            (1) the product of (A) the Stated Amount times (B) the number of
      Purchase Contracts with respect to which the Holder has elected to effect
      Early Settlement, plus

            (2) if such delivery is made with respect to any Purchase Contracts
      during the period from the close of business on any Record Date for any
      Payment Date to the opening of business on such Payment Date, an amount
      equal to the Purchase Contract Adjustment Payments payable on such Payment
      Date with respect to such Purchase Contracts.

Upon Early Settlement of Purchase Contracts by a Holder of the related PIES, the
Pledged Treasury Securities relating to such PIES shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall be entitled to
receive a number of shares of Common Stock on account of each Purchase Contract
forming part of a Treasury PIES as to which Early Settlement is effected equal
to the Early Settlement Rate. The Early Settlement Rate shall initially be equal
to 3.0084 shares of Common Stock per Purchase Contract and shall be adjusted

                                       B-5
<PAGE>

in the same manner and at the same time as the Settlement Rate is adjusted as
provided in the Purchase Contract Agreement.

            3. Recreation of Corporate PIES.

            A Holder of Treasury PIES may recreate Corporate PIES by delivering
to the Collateral Agent Senior Notes with a principal amount equal to the
aggregate principal amount of maturity of the Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such Collateral Substitution, the Holder's PIES shall be referred to as a
"Corporate PIES." Such Collateral Substitution may cause the equivalent
aggregate principal amount of this Certificate to be increased or decreased;
provided, however, this Treasury PIES Certificate shall not represent more than
4,704,350 Treasury PIES, or if in the form of a Global Certificate, such other
maximum amount as shall at the time be prescribed by the applicable Depositary.
All such adjustments to the equivalent aggregate principal amount of this
Treasury PIES Certificate if a Global Certificate, shall be duly recorded, by
placing an appropriate notation on the Schedule as may be attached hereto. A
Holder who elects to substitute Senior Notes for Treasury Securities, thereby
recreating Corporate PIES, shall be responsible for any fees or expenses
associated therewith.

            4. Registered Form; Denominations; Registration, Transfer and
Exchange.

            The Treasury PIES Certificates are issuable only in registered form
and only in denominations of a single Treasury PIES and any integral multiple
thereof. The transfer of any Treasury PIES Certificate will be registered and
Treasury PIES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Treasury PIES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Purchase Contract
Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Senior Notes for a Treasury Security, thereby creating Corporate
PIES, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract relating to a Treasury PIES remains in effect, such
Treasury PIES shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Treasury PIES in respect of the Treasury
Security and the Purchase Contract constituting such Treasury PIES may be
transferred and exchanged only as a Treasury PIES.

            Upon registration of transfer of this Treasury PIES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury PIES Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph. The Company, the Purchase Contract
Agent and its Affiliates and any agent of the Company or the Purchase Contract
Agent may treat the Person in whose name this Treasury PIES Certificate is
registered as the owner of the Treasury PIES evidenced hereby for the

                                       B-6
<PAGE>

purpose of receiving payments of Purchase Contract Adjustment Payments,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Purchase Contract Agent
nor any such agent shall be affected by notice to the contrary.]

            5. Place and Method of Payment.

            The Company shall pay, on each Payment Date, the Purchase Contract
Adjustment Payments payable in respect of each Purchase Contract to the Person
in whose name the Treasury PIES Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Purchase Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in The City of New York or, at the option of the
Company, by wire transfer or by check mailed to the address of the Person
entitled thereto at such address as it appears on the Treasury PIES Register.

            6. Authorization of Purchase Contract Agent.

            The Holder of this Treasury PIES Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Treasury PIES evidenced hereby on
its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities relating to this Treasury PIES
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect of the aggregate principal amount of the Pledged Treasury Securities
at maturity shall be paid on the Purchase Contract Settlement Date by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.

            7. Amendment.

            The provisions of the Purchase Contract Agreement and this Treasury
PIES Certificate may be amended only as provided in the Purchase Contract
Agreement.

            8. Voting Rights.

            The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
Upon settlement of the Purchase Contracts, the Holder will be entitled to all of
the rights of a holder of shares of Common Stock, including, without limitation,
the right to vote and receive dividends and other payments and to consent and
receive notice as a shareholder in respect of the meetings of shareholders and
for the election of directors of the Company and for all other matters, and all
other rights whatsoever as a shareholder of the Company.

                                       B-7
<PAGE>

            9. Severability.

            If any provision in this Treasury PIES is invalid or unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions of Treasury PIES shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision of this Treasury PIES in any
jurisdiction shall not in any way affect the validity or enforceability of such
provision in any other jurisdiction.

            10. Governing Law.

            THIS TREASURY PIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

            11. Jurisdiction; Venue.

            The Company hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to the Indenture and the Senior Notes or
the transactions contemplated hereby. The Company hereto irrevocably waives, to
the fullest extent permitted by applicable law, any objection which it 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.

            12. Copies of Purchase Contract Agreement.

            A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent at its address set
forth in Section 1.5 of the Purchase Contract Agreement.

                                       B-8
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -                    as tenants in common

TEN ENT -                    as tenants by the entireties

JT TEN -                     as joint tenants with right of survivorship and not
                             as tenants in common

UNIF GIFT MIN ACT -          (cust) Custodian for ( minor) _____________________

                             Under Uniform Gifts to Minors Act of ______________
                                                                         (State)

Additional abbreviations may also be used though not in the above list.

                            _________________________

  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
                                      unto
________________________________________________________________________________
                            (insert name of assignee)

________________________________________________________________________________
     (insert social security or taxpayer I.D. or other identifying number of
                                    assignee)
________________________________________________________________________________
                 (insert address including zip code of assignee)

the within Treasury PIES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing _______________________________ attorney
to transfer said Treasury PIES Certificates on the books of Sierra Pacific
Resources with full power of substitution in the premises.

Dated: ___________________       _______________________________________________
                                 Signature

                                 NOTICE: The signature to this assignment must
                                 correspond with the name as it appears upon the
                                 face of the within Treasury PIES Certificates
                                 in every particular, without alteration or
                                 enlargement or any change whatsoever.

Signature Guarantee: ___________________________________

                                       B-9
<PAGE>

                             SETTLEMENT INSTRUCTIONS

            The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts relating to the number of Treasury
PIES evidenced by this Treasury PIES Certificate be registered in the name of,
and delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned agrees to pay any transfer
tax payable incident thereto.

Dated: _______________________          __________________________________
                                        Signature

                                        Signature Guarantee: _________________
                                        (if assigned to another person)

                                REGISTERED HOLDER

               Please print name and address of Registered Holder:

________________________________________________________________________________
                                  (insert name)

________________________________________________________________________________
                                (insert address)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
    (insert social security or other taxpayer identification number, if any)
                            ________________________________

If shares are to be registered in the name of and delivered to a Person other
than the Holder, please (i) print such Person's name and address and (ii)
provide a guarantee of your signature:

________________________________________________________________________________
                                  (insert name

________________________________________________________________________________
                                (insert address)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
    (insert social security or other taxpayer identification number, if any)

                                      B-10
<PAGE>

                            ELECTION TO SETTLE EARLY

            The undersigned Holder of this Treasury PIES Certificate irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts relating
to the number of Treasury PIES evidenced by this Treasury PIES Certificate
specified below. The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered in the name
of, and delivered, together with a check in payment for any fractional share and
any Treasury PIES Certificate representing any Treasury PIES evidenced hereby as
to which Early Settlement of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned agrees to pay any transfer
tax payable incident thereto.

                                            ____________________________________
                                                         Signature
                                            Dated: _____________________________

                                             Signature Guarantee: ______________

            Number of PIES evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:

                                REGISTERED HOLDER

               Please print name and address of Registered Holder:

________________________________________________________________________________
                                  (insert name)

________________________________________________________________________________
                                (insert address)

________________________________________________________________________________

If shares of Common Stock or Treasury PIES Certificates are to be registered in
the name of and delivered to, and Pledged Treasury Securities are to be
transferred to, a Person other than the Holder, please print such Person's name
and address:

________________________________________________________________________________
                                  (insert name)

________________________________________________________________________________
                                (insert address)

_______________________________________________________________________________
    (insert social security or other taxpayer identification number, if any)

Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement:
________________________________________________________________________________

                                      B-11
<PAGE>

                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]

            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

            The following increases or decreases in this Global Certificate have
been made:

<TABLE>
<CAPTION>
                                                                        Number of Treasury PIES
                      Amount of decrease in    Amount of increase in       evidenced by this
                       Number of Treasury       Number of Treasury        Global Certificate       Signature of authorized
                      PIES evidenced by the    PIES evidenced by the        following such          signatory of Purchase
       Date            Global Certificate       Global Certificate       decrease or increase           Contract Agent
------------------    ---------------------    ---------------------    -----------------------    -----------------------
<S>                   <C>                      <C>                      <C>                        <C>
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
------------------    ---------------------    ---------------------    -----------------------    -----------------------
</TABLE>

                                      B-12
<PAGE>

                                                                       EXHIBIT C

                  NOTICE FROM HOLDER TO PURCHASE CONTRACT AGENT
    (Election for Creation of Treasury PIES or Recreation of Corporate PIES)

The Bank of New York, as Purchase Contract Agent
101 Barclay Street, Floor 8 West
New York, New York  10286
Attention: Corporate Trust Division - Corporate Finance Unit

        Re: [Corporate PIES] [Treasury PIES] of Sierra Pacific Resources

            Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.

            The undersigned Holder hereby notifies you in accordance with
Section [3.13] [3.14] of the Purchase Contract Agreement, that such Holder has
elected to [create][recreate] ________ [Treasury PIES] [Corporate PIES] by
substitution of $__________ aggregate principal amount of [Treasury Securities
(CUSIP No. )] [Senior Notes] for the [Pledged Senior Notes] [Pledged Treasury
Securities] held in the Collateral Account, in accordance with the Pledge
Agreement.

            The undersigned Holder hereby acknowledges that such Holder may
[create Treasury PIES] [recreate Corporate PIES] only in integral multiples of
20 [Corporate PIES] [Treasury PIES].

                                          ______________________________________
                                                       Name of Holder

                                          ______________________________________
                                                    DTC Participant No.

                                          ______________________________________
                                                         Signature

                                          Signature Guarantee:__________________

                                          Date: _______________________

Please print name and address of Registered Holder:

________________________________________________________________
Name

________________________________________________________________
Social Security or other Taxpayer Identification Number, if any

________________________________________________________________
Address

<PAGE>

                                                                       EXHIBIT D

                             INSTRUCTION FROM HOLDER
                           TO PURCHASE CONTRACT AGENT

The Bank of New York, as Purchase Contract Agent
101 Barclay Street, Floor 8 West
New York, New York  10286
Attention: Corporate Trust Division -- Corporate Finance Unit

        Re: [Corporate PIES] [Treasury PIES] of Sierra Pacific Resources

            Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.

            The undersigned Holder hereby notifies you that in accordance with
Section [3.13] [3.14] of the Purchase Contract Agreement it has transferred to
Wells Fargo Bank, National Association, as Securities Intermediary, for credit
to the Collateral Account, $______ aggregate principal amount of [Treasury
Securities] [Senior Notes] in exchange for the [Pledged Senior Notes] [Pledged
Treasury Securities] held in the Collateral Account, in accordance with the
Purchase Contract Agreement and the Pledge Agreement. The undersigned Holder has
paid all applicable fees relating to such exchange. The undersigned Holder
hereby requests that you to instruct the Collateral Agent to release to [you on
behalf of the undersigned Holder][the undersigned] the equivalent principal
amount of [Pledged Senior Notes] [Pledged Treasury Securities] related to the
above-captioned [Corporate PIES] [Treasury PIES].

                                               _________________________________
                                                         Name of Holder

                                               _________________________________
                                                            Signature

                                               Signature Guarantee:_____________

                                               Date: _______________________

Please print name and address of Registered Holder:

_________________________________________________________________
Name

_________________________________________________________________
[TRADES Account No.]

_________________________________________________________________
Social Security or other Taxpayer Identification Number, if any

_________________________________________________________________
Address

<PAGE>

                                                                       EXHIBIT E

                 NOTICE FROM PURCHASE CONTRACT AGENT TO HOLDERS
         (Transfer of Collateral upon Occurrence of a Termination Event)

[HOLDER]
_________________________
_________________________
Attention:
Fax: __________

        Re: [Corporate PIES] [Treasury PIES] of Sierra Pacific Resources

            Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.

            We hereby notify you that a Termination Event has occurred and that
[the Senior Notes][Treasury Portfolio Interest][the Treasury Securities]
relating to your ownership interest in _____ [Corporate PIES][Treasury Portfolio
Interest][Treasury PIES] have been released and are being held by us for your
account pending receipt of transfer instructions with respect to such [Senior
Notes][Treasury Portfolio Interest][Treasury Securities] (the "Released
Securities").

            Pursuant to Section 3.15 of the Purchase Contract Agreement, we
hereby request written transfer instructions with respect to the Released
Securities. Upon receipt of your instructions and upon transfer to us of your
[Corporate PIES][Treasury PIES] effected through book-entry transfer or by
delivery to us of your [Corporate PIES Certificate][Treasury PIES Certificate],
we shall transfer the Released Securities by book-entry transfer, or other
appropriate procedures, in accordance with your instructions. In the event you
fail to effect such transfer or delivery, the Released Securities and any
interest thereon, shall be held in our name or in the name of our nominee in
trust for your benefit, until the earlier of such time as (A) such [Corporate
PIES][Treasury PIES] are transferred or your [Corporate PIES
Certificate][Treasury PIES Certificate] is surrendered or satisfactory evidence
is provided that your [Corporate PIES Certificate][Treasury PIES Certificate]
has been destroyed, lost or stolen, together with any indemnification that we or
the Company may require and (B) the expiration of the time period specified in
the abandoned property laws of the relevant State.

                                  By: THE BANK OF NEW YORK,
                                      as Purchase Contract Agent

                                      _________________________________
                                      Name:
                                      Title:
                                      Date:

<PAGE>

                                                                       EXHIBIT F

                            NOTICE TO SETTLE BY CASH

The Bank of New York, as Purchase Contract Agent
101 Barclay Street, Floor 8 West
New York, New York  10286
Attention:  Corporate Trust Division -- Corporate Finance Unit

        Re: [Corporate PIES] [Treasury PIES] of Sierra Pacific Resources

            Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.

            The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.8 of the Purchase Contract Agreement, that such Holder has
elected to pay to the Securities Intermediary for deposit in the Collateral
Account, prior to 11:00 a.m. (New York City time), on the [fifth Business
Day][Business Day] immediately preceding the Purchase Contract Settlement Date
(in lawful money of the United States by certified or cashiers' check or wire
transfer, in immediately available funds), $______ as the Purchase Price for the
shares of Common Stock issuable to such Holder by the Company under the related
Purchase Contract on the Purchase Contract Settlement Date. The undersigned
Holder hereby instructs you to notify promptly the Collateral Agent of the
undersigned Holder's election to make such cash settlement with respect to the
Purchase Contracts related to such Holder's [Corporate PIES] [Treasury PIES] and
to release the related [Senior Notes] [Treasury Securities] to such Holder upon
such Cash Settlement.

                                               _________________________________
                                                           Signature

                                               Date: _______________________

                                               Signature Guarantee:_____________

Please print name and address of Registered Holder:

________________________________________________________________
Name

________________________________________________________________
Social Security or other Taxpayer Identification Number, if any

________________________________________________________________
Address

<PAGE>

                                                                       EXHIBIT G

           NOTICE FROM PURCHASE CONTRACT AGENT TO REMARKETING AGENTS,
                    COLLATERAL AGENT, TRUSTEE AND THE COMPANY
                   (Initial, Subsequent or Final Remarketing)

Merrill Lynch, Pierce, Fenner &      Lehman Brothers Inc., as Remarketing Agent
Smith Incorporated., as Remarketing  101 Hudson Street
Agent                                Jersey City, New Jersey 07302
[address]                            Attention: ___________________________
Attention: _______________________   Fax: _________________________________*
Fax:  ____________________________*

The Bank of New York, as Trustee     Wells Fargo Bank, National Association, as
101 Barclay Street. 8W               Collateral Agent
New York, New York  10286            Sixth and Marquette
Attention: Corporate Trust Division  MAC N9303-120
-- Corporate Finance Unit            Minneapolis, Minnesota 55479
Fax: (212) 815-5707                  Attention:  Jane Schweiger
                                     Fax (612) 667-9825

                            Sierra Pacific Resources
                                 6100 Neil Road
                                 P.O. Box 30150
                             Reno, Nevada 89520-0400
                   Attention: Manager of Finance and Treasury
                               Fax: (775) 834-5643

                 Re: Corporate PIES of Sierra Pacific Resources

            Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.

            In accordance with Section [5.3(b)] [5.3(c)] of the Purchase
Contract Agreement and based on [(A) the instructions received from Holders of
Corporate PIES prior to 5:00 p.m. (New York City time), on or prior to the
second Business Day, but no earlier than the fifth Business Day, immediately
preceding the first of the three sequential remarketing dates of any Three- Day
Remarketing Period and notice from the Securities Intermediary regarding Cash
Settlements received prior to 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 pursuant to Section 5.8 of the Purchase
Contract Agreement and (B)] the notices regarding the election not to
participate in the Remarketing received from Holders of Corporate PIES who
complied with the procedures for creating Treasury PIES prior to 5:00 p.m. (New
York City time), on the on the Business Day immediately preceding the first of
the three sequential remarketing dates of any Three-Day Remarketing Period
pursuant to Section 5.3(e) of the Purchase Contract Agreement, we hereby notify
you that $___________ in aggregate principal amount of Pledged Senior Notes is
to be tendered for purchase in the Remarketing that is scheduled to take place

--------------------------
*     Address and other information of Merrill Lynch, Pierce, Fenner & Smith
      Incorporated and Lehman Brothers Inc. to be confirmed prior to use of this
      form.

<PAGE>

[on one or more occasions in the period commencing on __________, 2005 up to and
including November 1, 2005] [on November 9, 2005, which is the third Business
Day before the Purchase Contract Settlement Date].

                                       By: THE BANK OF NEW YORK,
                                           as Purchase Contract Agent

                                           _____________________________________
                                           Name:
                                           Title:
                                           Date:

                                       G-2

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