Document:

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                                                                  Exhibit 4.6

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

                                PLEDGE AGREEMENT

                                      AMONG

                            SIERRA PACIFIC RESOURCES

                                       AND

      WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, AS COLLATERAL AGENT

                                       AND

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                           AS SECURITIES INTERMEDIARY

                                       AND

                THE BANK OF NEW YORK, AS PURCHASE CONTRACT AGENT

                          ----------------------------

                          DATED AS OF NOVEMBER 16, 2001

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

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
Section 1.        Definitions.....................................................................................2

Section 2.        Pledge..........................................................................................6
         Section 2.1       Pledge.................................................................................6
         Section 2.2       Control; Financing Statement...........................................................7
         Section 2.3       Termination............................................................................7

Section 3.        Distributions on Pledged Collateral.............................................................7
         Section 3.1       Income Distributions...................................................................7
         Section 3.2       Principal Payments Following Termination Event.........................................7
         Section 3.3       Principal Payments Prior to or On Purchase Contract Settlement Date....................8
         Section 3.4       Payments to Purchase Contract Agent....................................................8
         Section 3.5       Assets Not Properly Released...........................................................9

Section 4.        Control.........................................................................................9
         Section 4.1       Establishment of Collateral Account....................................................9
         Section 4.2       Treatment as Financial Assets..........................................................9
         Section 4.3       Sole Control by Collateral Agent......................................................10
         Section 4.4       Securities Intermediary's Location....................................................10
         Section 4.5       No Other Claims.......................................................................10
         Section 4.6       Investment and Release................................................................10
         Section 4.7       Statements and Confirmations..........................................................10
         Section 4.8       Tax Allocations.......................................................................10
         Section 4.9       No Other Agreements...................................................................11
         Section 4.10      Powers Coupled With An Interest.......................................................11

Section 5.        Initial Deposit; Creation of Treasury PIES; and Recreation of Corporate PIES; Other............11
         Section 5.1       Initial Deposit of Senior Notes.......................................................11
         Section 5.2       Creation of Treasury PIES by Substitution of Treasury Securities......................11
         Section 5.3       Recreation of Corporate PIES..........................................................13
         Section 5.4       Termination Event.....................................................................14
         Section 5.5       Cash Settlement.......................................................................15
         Section 5.6       Early Settlement; Merger Early Settlement.............................................16
         Section 5.7       Optional Remarketing..................................................................17
         Section 5.8       Application of Proceeds in Settlement; Remarketing....................................17

Section 6.        Voting Rights..................................................................................21

Section 7.        Rights and Remedies............................................................................21
         Section 7.1       Rights and Remedies of the Collateral Agent...........................................21
         Section 7.2       Substitutions.........................................................................22

                                       i

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<S>                                                                                                           <C>
                                                                                                              PAGE
Section 8.        Representations and Warranties; Covenants......................................................23
         Section 8.1       Representations and Warranties........................................................23
         Section 8.2       Covenants.............................................................................23

Section 9.        The Collateral Agent and the Securities Intermediary...........................................24
         Section 9.1       Appointment, Powers and Immunities....................................................24
         Section 9.2       Instructions of the Company...........................................................25
         Section 9.3       Reliance by Collateral Agent and Securities Intermediary..............................25
         Section 9.4       Rights in Other Capacities............................................................26
         Section 9.5       Non-Reliance on Collateral Agent and Securities Intermediary..........................26
         Section 9.6       Compensation and Indemnity............................................................26
         Section 9.7       Failure to Act........................................................................27
         Section 9.8       Resignation of Collateral Agent and Securities Intermediary...........................27
         Section 9.9       Right to Appoint Agent or Advisor.....................................................29
         Section 9.10      Survival .............................................................................29
         Section 9.11      Exculpation...........................................................................29

Section 10.       Amendment......................................................................................29
         Section 10.1      Amendment Without Consent of Holders..................................................29
         Section 10.2      Amendment with Consent of Holders.....................................................30
         Section 10.3      Execution of Amendments...............................................................31
         Section 10.4      Effect of Amendments..................................................................31
         Section 10.5      Reference to Amendments...............................................................31

Section 11.       Merger, Consolidation, Sale or Conveyance......................................................31
         Section 11.1      When Company May Merge, Etc...........................................................31
         Section 11.2      Successor Corporation Substituted.....................................................32
         Section 11.3      Limitation............................................................................32

Section 12.       Miscellaneous..................................................................................33
         Section 12.1      No Waiver.............................................................................33
         Section 12.2      Governing Law; Jurisdiction and Venue.................................................33
         Section 12.3      Notices...............................................................................33
         Section 12.4      Successors and Assigns................................................................34
         Section 12.5      Counterparts..........................................................................34
         Section 12.6      Effect of Headings and Table of Contents..............................................34
         Section 12.7      Severability..........................................................................35
         Section 12.8      Expenses, etc.........................................................................35
         Section 12.9      Security Interest Absolute............................................................35
</TABLE>

                                    EXHIBITS

<TABLE>
<S>                        <C>                                                                                 <C>
EXHIBIT A                  Instruction from Purchase Contract Agent to Collateral Agent
                           (Creation of Treasury PIES)..........................................................A-1
EXHIBIT B                  Instruction from Collateral Agent to Securities Intermediary
                           (Creation of Treasury PIES)..........................................................B-1

                                      -ii-

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<S>                        <C>                                                                                  <C>
EXHIBIT C                  Instruction from Purchase Contract Agent to Collateral Agent
                           (Recreation of Corporate PIES).......................................................C-1
EXHIBIT D                  Instruction from Collateral Agent to Securities Intermediary
                           (Recreation of Corporate PIES).......................................................D-1
EXHIBIT E                  Notice of Cash Settlement from the Securities Intermediary to the
                           Purchase Contract Agent..............................................................E-1
EXHIBIT F                  Instruction from Holder of Separated Senior Notes to Collateral
                              Agent Regarding Remarketing.......................................................F-1
EXHIBIT G                  Instruction from Purchase Contract Agent to Collateral Agent.........................G-1
EXHIBIT H                  Agency and Custody Account Direction for Cash Balances...............................H-1
</TABLE>

                                      -iii-

<PAGE>

         PLEDGE AGREEMENT, dated as of November 16, 2001, among SIERRA PACIFIC
RESOURCES, a Nevada corporation (the "Company"), WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association, not individually but
solely as collateral agent (in such capacity, together with its successors in
such capacity, the "Collateral Agent"), WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not individually but solely in its capacity as "Securities
Intermediary" (in such capacity, together with its successors in such capacity,
the "Securities Intermediary") as defined in Section 8-102(a)(14) of the UCC (as
hereinafter defined) with respect to the Collateral Account (as hereinafter
defined), and THE BANK OF NEW YORK, a New York banking corporation, not
individually but solely as purchase contract agent and as attorney-in-fact of
the Holders from time to time of the PIES (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as hereinafter defined).

                                    RECITALS

         The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement dated as of the date hereof (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Purchase Contract Agreement"), pursuant to which there are being issued
6,000,000 PIES (or up to 6,900,000, if the Underwriters' over-allotment option
pursuant to the Underwriting Agreement is exercised in full) (the "PIES"), all
of which will initially be Corporate PIES.

         Each Corporate PIES consists of a unit comprised of (a) one stock
purchase contract (a "Purchase Contract") under which the Holder will purchase
from the Company and the Company will be required to sell to such Holder not
later than the Purchase Contract Settlement Date, for an amount equal to $50
(the "Stated Amount"), a number of shares of Common Stock of the Company equal
to the Settlement Rate or Early Settlement Rate, as the case may be, then in
effect and (b) either beneficial ownership of (1) a Senior Note or (2) following
the Remarketing of the Senior Note in accordance with the Purchase Contract
Agreement and the Remarketing Agreement, the Treasury Portfolio Interest,
subject to the termination or settlement of the Purchase Contracts.

         In accordance with the terms of the Purchase Contract Agreement, a
Holder of Corporate PIES may separate the Senior Notes from the related Purchase
Contracts by substituting on or before the Election Date, for such Senior Notes,
Treasury Securities that will pay on maturity in the aggregate an amount equal
to the aggregate Stated Amount of such Corporate PIES. Upon such substitution,
the Corporate PIES will become Treasury PIES in accordance with the terms of the
Purchase Contract Agreement. Each Treasury PIES will be comprised of (a) a
Purchase Contract under which the holder will purchase from the Company not
later than the Purchase Contract Settlement Date, for the Stated Amount, a
number of shares of Common Stock of the Company equal to the Settlement Rate or
Early Settlement Rate, as the case may be, then in effect, and (b) a 1/20
undivided beneficial interest in a Treasury Security, subject to the termination
or settlement of the Purchase Contracts.

         Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the PIES have irrevocably
authorized the Purchase Contract Agent, as attorney-in-fact of such Holders,
among other things, to execute and deliver this

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                                                                               2

Agreement on behalf of such Holders and to grant the pledge provided herein of
the Collateral Account to secure the Obligations.

         Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the PIES, agree as follows:

Section 1.        DEFINITIONS.

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

                  (a) the terms defined in this Section have the meanings
assigned to them in this Section and include the plural as well as the singular;

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

                  (c) the following terms which are defined in the UCC shall
have the meanings set forth therein: "certificated security," "control,"
"financial asset," "entitlement order," "securities account" and "security
entitlement";

                  (d) capitalized terms used and not defined in this Agreement
shall have the meanings set forth in the Purchase Contract Agreement; and

                  (e) the following terms have the meanings given to them in
this Section 1(e):

         "Account Direction" means the Agency and Custody Account Direction for
Cash Balances in the form of Exhibit H attached hereto, as executed and
delivered to the Collateral Agent by the Company from time to time.

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

         "Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.

         "Collateral" means the collective reference to:

                  (1) the Collateral Account;

                  (2) all investment property and other financial assets and
         other property and credit balances from time to time credited to the
         Collateral Account, including, without limitation, (A) any Senior Notes
         or any Treasury Portfolio Interest which are then a component of the
         Corporate PIES and, in each case, security entitlements relating
         thereto, (B) any Treasury Securities and security entitlements relating
         thereto delivered from time to time upon establishment of Treasury PIES
         in accordance with Section 5.2 hereof and (C) payments made by Holders
         pursuant to Section 5.5 hereof;

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                                                                               3

                  (3) all Proceeds of any of the foregoing (whether such
         Proceeds arise before or after the commencement of any proceeding under
         any applicable bankruptcy, insolvency or other similar law, by or
         against the pledgor or with respect to the pledgor); and

                  (4) all powers and rights now owned or hereafter acquired
         under or with respect to the Collateral Account.

         "Collateral Account" means the Securities Account No. 11874500 entitled
"Wells Fargo Bank Minnesota, National Association, as Collateral Agent,
Securities Account (Sierra Pacific Resources)" maintained by the Securities
Intermediary for the Purchase Contract Agent on behalf of and as
attorney-in-fact for the Holders.

         "Collateral Agent" means the Person named as the "Collateral Agent" in
the first paragraph of this instrument until a successor shall have become such
in accordance with the terms of this Agreement, and thereafter "Collateral
Agent" shall mean such successor.

         "Collateral Substitution" means the substitution of Treasury Securities
for a Holder's Senior Notes, pursuant to Section 3.13 of the Purchase Contract
Agreement and Section 5.2 of this Agreement, and the substitution of a Holder's
Senior Notes for Treasury Securities, pursuant to Section 3.14 of the Purchase
Contract Agreement and Section 5.3 of this Agreement.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such in
accordance with the terms of this Agreement, and thereafter "Company" shall mean
such successor.

         "Custodian" has the meaning set forth in Section 5.2(c).

         "Final Remarketing" has the meaning set forth in the Remarketing
Agreement.

         "Final Remarketing Date" has the meaning set forth in the Remarketing
Agreement.

         "Initial Remarketing" has the meaning set forth in the Remarketing
Agreement.

         "Initial Remarketing Date" has the meaning set forth in Remarketing
Agreement.

         "Obligations" means, with respect to each Holder, the collective
reference to all obligations and liabilities of such Holder under such Holder's
Purchase Contract and this Agreement or any other document made, delivered or
given in connection herewith or therewith, in each case whether on account of
principal, interest (including, without limitation, interest accruing before and
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Holder, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Company or the
Collateral Agent or the Securities Intermediary that are required to be paid by
the Holder pursuant to the terms of any of the foregoing agreements).

         "Permitted Investments" means any one of the following which shall
mature not later than the Purchase Contract Settlement Date:

                  (1) any evidence of indebtedness with an original maturity of
         365 days or less issued, or directly and fully guaranteed or insured,
         by the United States of America or

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                                                                               4

         any agency or instrumentality thereof (provided that the full faith and
         credit of the United States of America is pledged in support of the
         timely payment thereof or such indebtedness constitutes a general
         obligation of it);

                  (2) deposits, certificates of deposit or acceptances with an
         original maturity of 365 days or less of any institution which is a
         member of the Federal Reserve System having combined capital and
         surplus and undivided profits of not less than $200,000,000 at the time
         of deposit, which may include the Collateral Agent or any of its
         affiliates;

                  (3) investments with an original maturity of 365 days or less
         of any Person that are fully and unconditionally guaranteed by a bank
         referred to in clause (2);

                  (4) repurchase agreements and reverse repurchase agreements
         relating to marketable direct obligations issued or unconditionally
         guaranteed by the United States Government or issued by any agency
         thereof and backed as to timely payment by the full faith and credit of
         the United States Government;

                  (5) investments in commercial paper, other than commercial
         paper issued by the Company or its affiliates, of any corporation
         incorporated under the laws of the United States or any State thereof,
         which commercial paper has a rating at the time of purchase at least
         equal to "A-1" by Standard & Poor's Ratings Services, Inc. ("S&P") or
         at least equal to "P-1" by Moody's Investors Service, Inc. ("Moody's");
         and

                  (6) investments in money market funds registered under the
         Investment Company Act of 1940, as amended, rated in the highest
         applicable rating category by S&P or Moody's, which may include such
         money market funds offered, administered or serviced by the Collateral
         Agent or any of its affiliates.

         "PIES" has the meaning specified in the paragraph preceding the
recitals of this Agreement.

         "Pledge" means the lien and security interest created by this
Agreement.

         "Pledged Senior Notes" means the Senior Notes, which shall be in
certificated form, and security entitlements with respect thereto from time to
time credited to the Collateral Account and not then released from the Pledge.

         "Pledged Treasury Portfolio Interest" means the Treasury Portfolio
Interest and security entitlements with respect thereto from time to time
credited to the Collateral Account and not then released from the Pledge.

         "Pledged Treasury Securities" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.

         "Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, Cash, instruments, securities,
financial assets (as defined in ss. 8-102(a)(9) of the UCC) and other property
received, receivable or otherwise distributed upon the sale,

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                                                                               5

exchange, collection or disposition of any financial assets from time to time
held in the Collateral Account.

         "Purchase Contract Agent" means the Person named as the "Purchase
Contract Agent" in the first paragraph of this instrument until a successor
shall have become such in accordance with the terms of the Purchase Contract
Agreement, and thereafter "Purchase Contract Agent" shall mean such successor.

         "Purchase Contract Agreement" has the meaning specified in the
paragraph preceding the recitals of this Agreement.

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

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

         "Remarketing Date" has the meaning set forth in the Purchase Contract
Agreement.

         "Remarketing Fee" has the meaning set forth in Section 5.8(a).

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

         "Remarketing Senior Notes" has the meaning set forth in Section 5.8(a).

         "Remarketing Settlement Date" has the meaning set forth in Section
5.8(a).

         "Reset Rate" has the meaning set forth in the Indenture.

         "Securities Intermediary" means the Person named as the "Securities
Intermediary" in the first paragraph of this instrument until a successor shall
have become such in accordance with the terms of this Agreement, and thereafter
"Securities Intermediary" shall mean such successor.

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

         "Stated Amount" has the meaning specified in the second paragraph of
the recitals of this Agreement.

         "Subsequent Remarketing" has the meaning specified in the Remarketing
Agreement.

         "Subsequent Remarketing Date" has the meaning specified in the
Remarketing Agreement.

          "Successful Final Remarketing" has the meaning set forth in Section
5.8(b).

         "Successful Initial Remarketing" has the meaning set forth in Section
5.8(a).

         "Successful Remarketing" has the meaning specified in the Remarketing
Agreement.

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                                                                               6

         "Successful Subsequent Remarketing" has the meaning set forth in
Section 5.8(a).

         "TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.

         "TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, an amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.

         "Transfer" means:

                  (1) in the case of certificated securities in registered form,
         delivery as provided in ss. 8-301(a) of the UCC, indorsed to the
         transferee or in blank by an effective indorsement

                  (2) in the case of Treasury Securities, registration of the
         transferee as the owner of such Treasury Securities on TRADES; and

                  (3) in the case of security entitlements, including, without
         limitation, security entitlements with respect to Treasury Securities,
         a securities intermediary indicating by book entry that such security
         entitlement has been credited to the transferee's securities account.

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

         "UCC" means the Uniform Commercial Code as in effect in the State of
New York from time to time.

         "Value" means, with respect to any item of Collateral on any date, as
to (i) Cash, the face amount thereof, (ii) Senior Notes, the aggregate principal
amount thereof due at maturity and (iii) Treasury Securities, the aggregate
principal amount thereof due at maturity and (iv) Treasury Portfolio Interest,
the aggregate principal amount thereof due at maturity.

Section 2.   PLEDGE.

         SECTION   2.1 PLEDGE.

                  Each Holder, acting through the Purchase Contract Agent as
such Holder's attorney-in-fact, hereby pledges and grants to the Collateral
Agent, as agent of and for the benefit of the Company, a continuing first
priority security interest in and to, and a lien upon and right of set off
against, all of such Holder's right, title and interest in and to the Collateral
to secure the prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Obligations. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.

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                                                                               7

         SECTION 2.2   CONTROL; FINANCING STATEMENT.

                  (a) The Collateral Agent shall have control of the Collateral
Account pursuant to the provisions of Section 4.3 of this Agreement.

                  (b) On the date of initial issuance of the PIES, the Company
shall file in the Office of the Secretary of State of the State of New York, a
financing statement identifying the Purchase Contract Agent, as attorney-in-fact
for the Holders, as debtors, and the Collateral Agent, as the secured party, and
describing the Collateral.

         SECTION 2.3   TERMINATION.

                  As to each Holder, this Agreement and the Pledge created
hereby shall terminate upon the satisfaction in full, discharge or termination
of such Holder's Obligations. Upon satisfaction in full, discharge or
termination of such Holder's Obligations and written notice thereof from the
Company, the Purchase Contract Agent or holders of at least 10% of the
outstanding PIES to the Securities Intermediary, the Securities Intermediary
shall, Transfer any remaining Collateral to the Purchase Contract Agent for
distribution to such Holder in accordance with its interest, free and clear of
any lien, pledge or security interest created hereby.

Section 3. DISTRIBUTIONS ON PLEDGED COLLATERAL.

         SECTION 3.1   INCOME DISTRIBUTIONS.

                  All income distributions, including interest payments received
by the Securities Intermediary or the Collateral Agent on account of the Pledged
Senior Notes, the Pledged Treasury Portfolio Interest or Permitted Investments
from time to time held in the Collateral Account, if any, shall be distributed
to the Purchase Contract Agent for the benefit of the applicable Holders in
whose names the Corporate PIES or Treasury PIES are registered at the close of
business on the Record Date (as specified in the Purchase Contract Agreement)
preceding the date of such distribution as provided in the Purchase Contract
Agreement. Notwithstanding the foregoing, income distributions, including
interest payments received by the Securities Intermediary or the Collateral
Agent on account of the Treasury Portfolio Interest shall not exceed the
Treasury Portfolio Return.

         SECTION 3.2   PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT.

                  All payments received by the Collateral Agent or the
Securities Intermediary following a Termination Event with respect to (1) the
Pledged Senior Notes or security entitlement with respect thereto, (2) the
Pledged Treasury Portfolio Interest or security entitlement with respect thereto
or (3) the Pledged Treasury Securities or security entitlement with respect
thereto shall, in each case, be distributed to the Purchase Contract Agent for
the benefit of the applicable Holders in whose names the Corporate PIES or
Treasury PIES are registered at the close of business on the Record Date (as
specified in the Purchase Contract Agreement) preceding the date of such
distribution for distribution to such Holders in accordance with their
respective interests.

<PAGE>

                                                                               8

         SECTION 3.3   PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT
SETTLEMENT DATE.

                  (a) Except as provided in clause 3.3(b) below, if the
Securities Intermediary and Collateral Agent have not received notice of a
Termination Event, all payments received by the Collateral Agent or the
Securities Intermediary of (1) the principal amount with respect to the Pledged
Senior Notes or security entitlement with respect thereto (2) the principal
amount with respect to the Pledged Treasury Portfolio Interest or security
entitlement with respect thereto or (3) the principal amount with respect to
Pledged Treasury Securities or security entitlement with respect thereto, shall
be held and invested at the written direction of the Company in Permitted
Investments until the Purchase Contract Settlement Date and on the Purchase
Contract Settlement Date distributed to the Company as provided in Section 5.8
hereof. Any balance remaining in the Collateral Account shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in whose names the Corporate PIES or Treasury PIES
are registered at the close of business on the Record Date (as specified in the
Purchase Contract Agreement) immediately preceding the date of such distribution
in accordance with their respective interests. Upon the request of the
Securities Intermediary or the Collateral Agent, as applicable, the Company
shall instruct the Securities Intermediary or the Collateral Agent, as
applicable, as to the type of Permitted Investments in which any payments made
under this Section shall be invested, PROVIDED, HOWEVER, that if the Company
fails to deliver such instructions by 10:30 a.m. (New York City time), the
Securities Intermediary or the Collateral Agent, as applicable, shall invest
such payments in the Permitted Investments described in clause 6 of the
definition of Permitted Investments and identified by the Company in the Account
Direction..

                  (b) All payments received by the Collateral Agent or the
Securities Intermediary of (1) the principal amount with respect to the Pledged
Senior Notes or security entitlement with respect thereto (2) the principal
amount with respect to the Pledged Treasury Portfolio Interest or security
entitlement with respect thereto or (3) the principal amount of Pledged Treasury
Securities or security entitlement with respect thereto that, in each case, have
been released from the Pledge shall be distributed to the Purchase Contract
Agent, for the benefit of the Holders, to be distributed to such Holders in
whose names the Corporate PIES or Treasury PIES are registered at the close of
business on the Record Date (as specified in the Purchase Contract Agreement)
immediately preceding the date of such distribution in accordance with their
respective interests.

         SECTION 3.4   PAYMENTS TO PURCHASE CONTRACT AGENT.

                  Payments to the Purchase Contract Agent hereunder shall be
made to the account designated by the Purchase Contract Agent for such purpose
(which shall be: The Bank of New York, ABA 021 000 018; 88K-Attn: Corporate
Trust Agency/GLA 111-565; Account Name: Sierra Pacific Resources; Account No.
334151, unless and until otherwise advised by the Purchase Contract Agent) not
later than 12:00 p.m. (New York City time), on the Business Day such payment is
received by the Collateral Agent or the Securities Intermediary; PROVIDED,
HOWEVER, that if such payment is received by the Collateral Agent or the
Securities Intermediary on a day that is not a Business Day or after 11:00 a.m.
(New York City time) on a Business Day, then such payment shall be made no later
than 10:30 a.m. (New York City time), on the next succeeding Business Day.

<PAGE>

                                                                               9

         SECTION 3.5   ASSETS NOT PROPERLY RELEASED.

                  If the Purchase Contract Agent or any Holder shall receive any
payments on account of financial assets credited to the Collateral Account and
not released therefrom in accordance with this Agreement, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for the
benefit of the Company and, upon receipt of an Officers' Certificate so
directing, promptly deliver the same to the Securities Intermediary for credit
to the Collateral Account or to the Company for application to the obligations
of the Holders under the related Purchase Contracts, and the Purchase Contract
Agent and Holders shall acquire no right, title or interest in any such payments
of amounts so received.

Section 4.   CONTROL.

         SECTION 4.1   ESTABLISHMENT OF COLLATERAL ACCOUNT.

                  The Securities Intermediary hereby confirms that:

                  (1) the Securities Intermediary has established the Collateral
         Account;

                  (2) the Collateral Account is a securities account;

                  (3) subject to the terms of this Agreement, the Securities
         Intermediary shall treat the Purchase Contract Agent as entitled to
         exercise the rights that comprise any financial asset credited to the
         Collateral Account;

                  (4) upon delivery to the Securities Intermediary of any
         property, including Cash, pursuant to this Agreement, the Purchase
         Contract Agreement or the Indenture, the Securities Intermediary will
         promptly indicate by book-entry that such property has been credited
         to the Collateral Account; and

                  (5) except with respect to the Pledged Senior Notes, which
         shall be registered in the name of the Purchase Contract Agent, all
         securities, securities entitlements or other property underlying any
         financial assets credited to the Collateral Account shall be
         registered in the name of the Securities Intermediary, indorsed to
         the Securities Intermediary, or in blank or credited to another
         securities account maintained in the name of the Securities
         Intermediary, and in no case will any financial asset or other
         property credited to the Collateral Account be registered in the name
         of the Purchase Contract Agent or any Holder, payable to the order of
         the Purchase Contract Agent or any Holder or specially indorsed to
         the Purchase Contract Agent or any Holder.

         SECTION 4.2   TREATMENT AS FINANCIAL ASSETS.

                  Each item of property (whether investment property,
financial asset, security, securities entitlements, instrument or Cash)
credited to the Collateral Account shall be treated as a financial asset
under Article 8 of the UCC.

         SECTION 4.3   SOLE CONTROL BY COLLATERAL AGENT.

                  Except as provided in Section 6, at all times prior to the
termination of the Pledge, the Collateral Agent shall have sole control of the
Collateral Account, and the Securities Intermediary shall take instructions and
directions with respect to the Collateral Account solely

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                                                                              10

from the Collateral Agent. If at any time the Securities Intermediary shall
receive an entitlement order issued by the Collateral Agent and relating to the
Collateral Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Purchase Contract Agent or any
Holder or any other Person. Until termination of the Pledge, the Securities
Intermediary will not comply with any entitlement orders issued by the Purchase
Contract Agent or any Holder.

         SECTION 4.4   SECURITIES INTERMEDIARY'S LOCATION.

                  The Collateral Account and the rights and obligations of the
Securities Intermediary, the Collateral Agent, the Purchase Contract Agent and
the Holders with respect thereto shall be governed by the laws of the State of
New York. Regardless of any provision in any other agreement, for purposes of
the UCC, New York shall be deemed to be the Securities Intermediary's location.

         SECTION 4.5   NO OTHER CLAIMS.

                  Except for the claims and interest of the Collateral Agent,
the Company, the Purchase Contract Agent and the Holders in the Collateral
Account, the Securities Intermediary does not know of any claim to, or interest
in, the Collateral Account or in any financial asset credited thereto. If any
Person asserts any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against the Collateral Account or in any financial asset carried therein, the
Securities Intermediary, upon receiving written notice thereof, will promptly
notify the Collateral Agent, the Purchase Contract Agent and the Company.

         SECTION 4.6   INVESTMENT AND RELEASE.

                  All proceeds of financial assets from time to time deposited
in the Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement
or upon written instructions of the Collateral Agent.

         SECTION 4.7   STATEMENTS AND CONFIRMATIONS.

                  The Securities Intermediary will promptly send copies of all
statements, confirmations and other correspondence concerning the Collateral
Account and any financial assets credited thereto simultaneously to each of the
Collateral Agent, the Purchase Contract Agent and the Company at their addresses
for notices under this Agreement.

         SECTION 4.8   TAX ALLOCATIONS.

                  The Company shall report all items of income, gain, expense
and loss recognized in the Collateral Account to the Internal Revenue Service
and all state and local taxing authorities under the names and taxpayer
identification numbers of the Holders that are the beneficial owners thereof.
None of the Collateral Agent, the Securities Intermediary or the Purchase
Contract Agent shall have any responsibility for such tax reporting.

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                                                                              11

         SECTION   4.9 NO OTHER AGREEMENTS.

                  The Securities Intermediary has not entered into, and prior to
the termination of the Pledge will not enter into, any agreement with any other
Person relating to the Collateral Account or any financial assets credited
thereto, including, without limitation, any agreement to comply with entitlement
orders of any Person other than the Collateral Agent.

         SECTION 4.10   POWERS COUPLED WITH AN INTEREST.

                  The rights and powers granted in this Section 4 to the
Collateral Agent have been granted in order to perfect its security interests in
the Collateral Account, are powers coupled with an interest and will be affected
neither by the bankruptcy of the Purchase Contract Agent or any Holder nor by
the lapse of time. The obligations of the Securities Intermediary under this
Section 4 shall continue in effect until the termination of the Pledge.

Section 5.   INITIAL DEPOSIT; CREATION OF TREASURY PIES; AND RECREATION OF
             CORPORATE PIES; OTHER.

         SECTION 5.1 INITIAL DEPOSIT OF SENIOR NOTES.

                  Prior to or concurrently with the execution and delivery of
this Agreement, the Purchase Contract Agent, on behalf of the initial Holders
of the Corporate PIES, shall Transfer to the Securities Intermediary, and the
Securities Intermediary shall accept, for credit to the Collateral Account,
the Senior Notes or security entitlements relating to such Senior Notes, the
Securities Intermediary shall indicate by book entry that a security
entitlement with respect to such Senior Notes has been credited to the
Collateral Account.

         SECTION 5.2   CREATION OF TREASURY PIES BY SUBSTITUTION OF TREASURY
SECURITIES.

                  (a) A Holder of Corporate PIES may separate the Senior Notes
from the related Purchase Contracts in respect of such Holder's Corporate PIES
by substituting for such Senior Notes Treasury Securities or security
entitlements thereto 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 the Election Date by:

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

                  (2) for each group of 20 Corporate PIES from which such Holder
         wishes to create Treasury PIES, transferring a Treasury Security to the
         Securities Intermediary which shall then (y) deposit the Treasury
         Security with the Collateral Agent in the Collateral Account under this
         Agreement and instruct the Collateral Agent to hold such Treasury
         Security as Collateral under this Agreement and (z) instruct the
         Collateral Agent to release to the Purchase Contract Agent, on behalf
         of such Holder, $1,000 principal amount of Senior Notes formerly
         subject to the Pledge;

                  (3) transferring the related Corporate PIES to the Purchase
         Contract Agent accompanied by a notice to the Purchase Contract Agent,
         substantially in the form of

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                                                                              12

         Exhibit D to the Purchase Contract Agreement, stating that the Holder
         has transferred the relevant amount of Treasury Securities to the
         Securities Intermediary and requesting that the Purchase Contract Agent
         instruct the Collateral Agent to release the Senior Notes underlying
         such Corporate PIES, whereupon the Purchase Contract Agent shall
         promptly give such instruction to the Collateral Agent, substantially
         in the form of Exhibit A hereto; and

                  (4) paying to the Collateral Agent any fees or expenses
         incurred in connection with the Collateral Substitution;

PROVIDED that, Holders may make Collateral Substitutions only in integral
multiples of 20 Corporate PIES. Under no circumstances may a Holder of Corporate
PIES create Treasury PIES after 5:00 p.m. (New York City time) on the Election
Date.

                  Upon receipt from the Purchase Contract Agent of a notice
substantially in the form of Exhibit A hereto, confirmation from the Securities
Intermediary that Treasury Securities have been credited to the Collateral
Account and receipt of payment for any fees or expenses incurred in connection
with the Collateral Substitution, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of Exhibit B
hereto, to release such Pledged Senior Notes from the Pledge by Transfer the
Purchase Contract Agent for distribution to such Holder thereof, free and clear
of any lien, pledge or security interest created hereby.

                  (b) Upon credit to the Collateral Account of Treasury
Securities or security entitlements thereto delivered by a Holder of Corporate
PIES and receipt of the related instruction from the Collateral Agent, the
Securities Intermediary shall release the Senior Notes specified in such
instruction and shall promptly Transfer the same to the Purchase Contract Agent
for distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.

                  A Holder may elect not to participate in the Remarketing by
creating Treasury PIES as specified in this Section and Section 5.3(e) of the
Purchase Contract Agreement at any time until 5:00 p.m. (New York City time) on
the Election Date.

                  (c) Notwithstanding any provision herein to the contrary,
the release and Transfer of the Pledged Senior Notes in connection with the
Collateral Substitution pursuant to this Section 5.2 shall be evidenced by an
endorsement by the Collateral Agent on the Pledged Senior Note held by the
Collateral Agent reflecting a reduction in the principal amount of such
Pledged Senior Note equal in amount to the principal amount of such Separated
Senior Note. The Collateral Agent shall confirm any such reduced principal
amount by telecopying or otherwise delivering a photocopy of such endorsement
made on the Pledged Senior Note evidencing such reduced principal amount to
the Trustee. Upon receipt of such confirmation, the Trustee shall instruct
the Custodian (as defined in the Indenture Officers' Certificate) to increase
the principal amount of the Senior Notes issued in global form held by the
Custodian in an amount equal to the reduced principal amount by an
endorsement made the Custodian on such global Senior Note to reflect such
increase.

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                                                                              13

         SECTION 5.3   RECREATION OF CORPORATE PIES.

                  (a) A Holder of a Treasury PIES may recreate Corporate PIES at
any time until 5:00 p.m. (New York City time) on the Election Date by:

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

                  (2) for each Treasury PIES such Holder wishes to substitute,
         transferring 20 Senior Notes to the Securities Intermediary which shall
         then (y) deposit such Senior Notes in the Collateral Account under this
         Agreement and instruct the Collateral Agent to hold such Senior Notes
         as Collateral and (z) instruct the Collateral Agent to release to such
         Holder one (1) Treasury Security formerly subject to the Pledge;

                  (3) transferring the related Treasury PIES to the Purchase
         Contract Agent accompanied by a notice to the Purchase Contract Agent,
         substantially in the form of Exhibit D of the Purchase Contract
         Agreement, (i) stating that the Holder has transferred 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 underlying such Treasury PIES,
         whereupon the Purchase Contract Agent shall promptly give such
         instruction to the Collateral Agent, substantially in the form of
         Exhibit C hereto; and

                  (4) paying to the Collateral Agent any fees or expenses
         incurred in connection with the recreation of Corporate PIES;

PROVIDED that, Holders of Treasury PIES may recreate Corporate PIES in integral
multiples of 20 Treasury PIES for 20 Corporate PIES. Under no circumstance may a
Holder of Treasury PIES recreate Corporate PIES after 5:00 p.m. (New York City
time) on the Election Date.

                  Upon receipt from the Purchase Contract Agent of a notice
substantially in the form of Exhibit C hereto, confirmation that Senior Notes or
security entitlements thereto have been credited to the Collateral Account as
described in such notice and receipt of payment for any fees or expenses
incurred in connection with the recreation of Corporate PIES, the Collateral
Agent shall instruct the Securities Intermediary by a notice, substantially in
the form provided in Exhibit D hereto, to release such Pledged Treasury
Securities from the Pledge by Transfer to the Holder thereof.

                  (b) Upon credit to the Collateral Account of Senior Notes or
security entitlements thereto and receipt of the related instruction from the
Collateral Agent, the Securities Intermediary shall release the applicable
Treasury Securities specified in such instruction and shall promptly Transfer
the same to such Holder, free and clear of any lien, pledge or security interest
created hereby.

<PAGE>

                                                                              14

                  (c) Notwithstanding any provision herein to the contrary,
the Transfer of the Senior Notes in connection with the recreation of
Corporate PIES pursuant to this Section 5.3 shall be evidenced by an
endorsement by the Collateral Agent on the Pledged Senior Note held by the
Collateral Agent reflecting an increase in the principal amount of such
Pledged Senior Note equal in amount to the principal amount of such Senior
Note. The Collateral Agent shall confirm any such increased principal amount
by telecopying or otherwise delivering a photocopy of such endorsement made
on the Pledged Senior Note evidencing such increased principal amount to the
Trustee. Upon receipt of such confirmation, the Trustee shall instruct the
Custodian (as defined in the Indenture Officers' Certificate) to decrease the
principal amount of Senior Notes issued in global form held by the Custodian
in an amount equal to the increased principal amount by an endorsement made
by the Custodian on such global Senior Note to reflect such decrease.

         SECTION 5.4   TERMINATION EVENT.

                  (a) Upon receipt by the Collateral Agent of written notice
from the Company or the Purchase Contract Agent that a Termination Event has
occurred, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Senior Notes or security entitlement with
respect thereto, any Pledged Treasury Portfolio Interest or security entitlement
with respect thereto and any Pledged Treasury Securities or security entitlement
with respect thereto to the Purchase Contract Agent for the benefit of the
Holders, for distribution to such Holders in accordance with their respective
interests, free and clear of any lien, pledge or security interest or other
interest created hereby.

                  (b) If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall
for any reason fail promptly to effectuate the release and Transfer of all
Pledged Senior Notes, the Pledged Treasury Portfolio Interest or the Pledged
Treasury Securities or security entitlements with respect thereto, as the case
may be, as provided by this Section 5.4, the Purchase Contract Agent shall:

                  (1) request an opinion letter of a nationally recognized law
         firm reasonably acceptable to the Collateral Agent to the effect that,
         as a result of the Company's being the debtor in such a bankruptcy
         case, the Collateral Agent will not be prohibited from releasing or
         Transferring the Collateral as provided in this Section 5.4, and shall
         deliver such opinion to the Collateral Agent within ten days after the
         occurrence of such Termination Event, and if (A) the Purchase Contract
         Agent shall be unable to obtain such opinion within ten days after the
         occurrence of such Termination Event or (B) the Collateral Agent shall
         continue, after delivery of such opinion, to refuse to effectuate the
         release and Transfer of all Pledged Senior Notes, all Pledged Treasury
         Portfolio Interest, all Pledged Treasury Securities or the Proceeds of
         any of the foregoing, as the case may be, as provided in this Section
         5.4, then the Purchase Contract Agent shall within thirty days after
         the occurrence of such Termination Event commence an action or
         proceeding in the court having jurisdiction of the Company's case under
         the Bankruptcy Code seeking an order requiring the Collateral Agent to
         effectuate the release and transfer of all Pledged Senior Notes, all
         Pledged Treasury Portfolio Interest or all the Pledged Treasury
         Securities or security entitlements with respect thereto, as the case
         may be, as provided by this Section 5.4; or

<PAGE>

                                                                              15

                  (2) commence an action or proceeding like that described in
         Section 5.4(b)(1)(B) hereof within ten days after the occurrence of
         such Termination Event.

The Purchase Contract Agent shall be deemed to have complied with Section
5.4(b)(1), and shall not be required to commence any action or proceeding
referred to therein, if it shall have either obtained such an opinion letter or
requested such an opinion from three such nationally recognized law firms
reasonably acceptable to the Collateral Agent.

         SECTION   5.5 CASH SETTLEMENT.

                  (a) Unless a Holder has effected an Early Settlement or a
Merger Early Settlement or a Successful Remarketing has occurred, in the case
of Corporate PIES, and unless a Termination Event has occurred prior to dates
required for notice to elect the Cash Settlement right specified in the
Purchase Contract Agreement and the Collateral Agent has received written
notice from the Company, the Purchase Contract Agent or, in the case of a
Termination Event, from the holders of at least 10% of the outstanding PIES
of such Early Settlement, Merger Early Settlement, Successful Remarketing or
Termination Event, as the case may be, upon receipt by the Collateral Agent
of (1) a notice from the Purchase Contract Agent (including a copy of such
notice received from the Holder substantially in the form of Exhibit F to the
Purchase Contract Agreement) promptly after the receipt by the Purchase
Contract Agent of a notice from a Holder of a Corporate PIES or a Treasury
PIES that it has elected, in accordance with the procedures specified in
Section 5.8(a)(i) or (b)(i) of the Purchase Contract Agreement, respectively,
to effect a Cash Settlement and (2) payment by such Holder by deposit in the
Collateral Account on or prior to 11:00 a.m. (New York City time), on the
fifth Business Day immediately preceding the Purchase Contract Settlement
Date in the case of Corporate PIES, and the Business Day immediately
preceding the Purchase Contract Settlement Date in the case of the Treasury
PIES, of the Purchase Price in lawful money of the United States by certified
or cashiers' check or wire transfer, in each case of immediately available
funds payable to or upon the order of the Securities Intermediary, then the
Collateral Agent shall upon receipt of written directions from the Company:

                  (1) instruct the Securities Intermediary promptly to invest
         any such Cash in Permitted Investments;

                  (2) release from the Pledge (i) in the case of a Holder of
         Corporate PIES, the related Pledged Senior Notes, or (ii) in the case
         of a Holder of Treasury PIES, the related Pledged Treasury Securities,
         with a principal amount or principal amount at maturity, as the case
         may be, equal to the product of (x) the Stated Amount times (y) the
         number of Purchase Contracts as to which such Holder has elected to
         effect a Cash Settlement; and

                  (3) instruct the Securities Intermediary to Transfer all such
         Pledged Senior Notes or Pledged Treasury Securities, as the case may
         be, to the Purchase Contract Agent for the benefit of such Holders, in
         each case free and clear of the Pledge created hereby, for distribution
         to such Holder.

                  The Company shall instruct the Securities Intermediary as to
the type of Permitted Investments in which any such Cash shall be invested;
PROVIDED, HOWEVER, that if the Company fails to deliver such instructions by
10:00 a.m. (New York City time), the Securities Intermediary shall invest such
Cash in the Permitted Investments described in clause 6 of the definition of

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                                                                              16

Permitted Investments and identified by the Company in the Account Direction.
Upon receipt of the proceeds upon the maturity of the Permitted Investments on
the Purchase Contract Settlement Date, the Collateral Agent shall (A) instruct
the Securities Intermediary to pay the portion of such proceeds and deliver any
certified or cashier's checks received, in an aggregate amount equal to the
Purchase Price, to the Company on the Purchase Contract Settlement Date, and (B)
instruct the Securities Intermediary to release any amounts in respect of the
interest earned from such Permitted Investments to the Purchase Contract Agent
for distribution to such Holder.

                  (b) If a Holder of a Corporate PIES notifies the Purchase
Contract Agent as provided in Section 5.8(a)(i) of the Purchase Contract
Agreement of its intention to pay the Purchase Price in cash, but fails to make
such payment as required by Section 5.8(a)(ii) of the Purchase Contract
Agreement, such Holder shall be deemed to have consented to (A) to the
disposition of the Pledged Senior Notes on the third Business Day prior to the
Purchase Contract Settlement Date in connection with the Final Remarketing in
accordance with Section 5.3 of the Purchase Contract Agreement or, (B) if a
Failed Remarketing occurs, the Collateral Agent, for the benefit of the Company,
and upon written direction of the Company as provided in this Agreement,
exercising all of its rights as a secured party with respect to any Pledged
Senior Notes under this Agreement and, subject to applicable law, by either (i)
retaining such Senior Notes in full satisfaction of such Holder's obligations
under the related Purchase Contracts or (ii) selling such Senior Notes in one or
more public or private sales.

                  (c) If a Holder of a Treasury PIES notifies the Purchase
Contract Agent as provided in Section 5.8(b)(i) of the Purchase Contract
Agreement of its intention to pay the Purchase Price in cash, but fails to make
such payment as required by Section 5.8(b)(ii) of the Purchase Contract
Agreement, such Holder shall be deemed to have elected to pay the Purchase Price
in accordance with Section 5.8(b) hereof.

                  (d) Prior to 3:00 p.m. (New York City time), on the fourth
Business Day immediately preceding the Purchase Contract Settlement Date, the
Securities Intermediary shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating the amount of cash that
it has received with respect to the Cash Settlement of Corporate PIES.

                  (e) Prior to 3:00 p.m. (New York City time), on the Business
Day immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating the amount of cash that
it has received with respect to the Cash Settlement of Treasury PIES.

         SECTION 5.6   EARLY SETTLEMENT; MERGER EARLY SETTLEMENT.

                  Unless a Termination Event has occurred and the Collateral
Agent has received from the Company or the Purchase Contract Agent or holders of
at least 10% of the outstanding PIES written notice of such Termination Event,
upon receipt by the Collateral Agent of a notice from the Purchase Contract
Agent that a Holder of PIES has elected to effect Early Settlement or Merger
Early Settlement of its obligations under the Purchase Contracts forming a part
of such PIES in accordance with the terms of the Purchase Contracts and the
Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to effect Early
Settlement or Merger Early Settlement), and that the Purchase

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                                                                              17

Contract Agent has received from such Holder, and paid to the Company as
confirmed in writing by the Company, the related Early Settlement Amounts or
Merger Early Settlement Amounts, as applicable, pursuant to the terms of the
Purchase Contract Agreement and all conditions to such Early Settlement or
Merger Early Settlement, as applicable, have been satisfied, then the Collateral
Agent shall release from the Pledge, (1) Pledged Senior Notes, or Pledged
Treasury Portfolio Interest, as the case may be, in the case of a Holder of
Corporate PIES, or (2) Pledged Treasury Securities, in the case of a Holder of
Treasury PIES, with a Value equal to the product of (i) the Stated Amount times
(ii) the number of Purchase Contracts as to which such Holder has elected to
effect Early Settlement or Merger Early Settlement, as applicable, and shall
instruct the Securities Intermediary to Transfer all such Pledged Senior Notes,
Pledged Treasury Portfolio Interest or Pledged Treasury Securities, as the case
may be, to the Purchase Contract Agent for the benefit of such Holder, in each
case free and clear of the Pledge created hereby, for distribution to such
Holder.

                  Notwithstanding anything to the contrary contained herein,
Holders may not effect Early Settlement after 5:00 p.m. (New York City time) on
the Election Date and Holders may effect Merger Early Settlement of PIES only in
integral multiples of 20 Corporate PIES or 20 Treasury PIES.

         SECTION 5.7   OPTIONAL REMARKETING.

                  Pursuant to the Indenture and the Remarketing Agreement, on or
prior to 5:00 p.m. (New York City time) on the Election Date, registered holders
of Separated Senior Notes may elect to have their Separated Senior Notes
remarketed by Transferring their Separated Senior Notes, together with a notice
of such election, substantially in the form of Exhibit F hereto and Exhibit B to
the Indenture Officers' Certificate, to the Collateral Agent and the Trustee,
respectively, whereupon, the Collateral Agent shall hold such Separated Senior
Notes in an account separate from the Collateral Account and cause such
Separated Senior Notes to be included in any Remarketing pursuant to the
Indenture and the Remarketing Procedures. Once such holder of such Separated
Senior Notes delivers such notice and Separated Senior Notes as specified in the
preceding sentence, such election may not be withdrawn and may not be
conditioned upon the level at which the Reset Rate is established in the
Remarketing; PROVIDED, HOWEVER, that if such a holder delivers only such a
notice but not the Separated Senior Notes subject to the notice, then none of
such holders' Separated Senior Notes shall be included in the Remarketing.

                  If a Failed Remarketing occurs, the Remarketing Agent shall
notify by telephone the Company, the Depositary, the Purchase Contract Agent,
the Collateral Agent and the Trustee that a Failed Remarketing has occurred and
shall Transfer to the Collateral Agent, by the third Business Day following the
Failed Remarketing, such Separated Senior Notes, whereupon the Collateral Agent
shall promptly Transfer such Separated Senior Notes to the holders entitled
thereto.

         SECTION 5.8   APPLICATION OF PROCEEDS IN SETTLEMENT; REMARKETING.

                  (a) Unless a Termination Event has occurred or a Holder has
effected an Early Settlement or a Merger Early Settlement, Early Settlement or
Merger Early Settlement and the Collateral Agent has received written notice of
such Termination Event, Early Settlement, or

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                                                                              18

Merger Early settlement from the Company or the Purchase Contract Agent or, in
the case of a Termination, Holders of at least 10% of the Outstanding PIES, (i)
the Purchase Contract Agent shall provide notice, substantially in the form of
Exhibit G to the Purchase Contract Agreement by 11:00 a.m. (New York City time),
on the Business Day immediately preceding the Initial Remarketing Date, to the
Remarketing Agent, the Collateral Agent, the Trustee and the Company of the
aggregate principal amount of Pledged Senior Notes comprising part of Corporate
PIES to be remarketed, other than those Pledged Senior Notes of Holders that
have elected not to participate in the Remarketing pursuant to paragraph
19(i)(B) of the Indenture Officers' Certificate and Section 5.3(e) of the
Purchase Contract Agreement (of which the Purchase Contract Agent has delivered
written notice thereof to the Collateral Agent, substantially in the form of
Exhibit G hereto), and (ii) the Collateral Agent shall notify, by 11:00 a.m.
(New York City time), on the Business Day immediately preceding the Initial
Remarketing Date, the Remarketing Agent, the Trustee and the Company of the
aggregate principal amount of Separated Senior Notes of holders of Separated
Senior Notes that have elected to participate in the Remarketing (the Senior
Notes described in clauses (i) and (ii) collectively being referred to as the
"Remarketing Senior Notes") and, concurrently therewith, the Collateral Agent
shall, without any further instruction from any holder of the Remarketing Senior
Notes, present all Remarketing Senior Notes to the Remarketing Agent for
Remarketing.

                  If there has been a successful Initial Remarketing (a
"Successful Initial Remarketing") or a successful Subsequent Remarketing (a
"Successful Subsequent Remarketing"), the Remarketing Agent will on the
Remarketing Date of such Remarketing (i) deduct and retain for itself as a
remarketing fee an amount not exceeding 25 basis points (0.25%) of the principal
amount of each remarketed Remarketing Senior Note (the "Remarketing Fee"), (ii)
use the remaining Proceeds with respect to the Pledged Senior Notes from such
Successful Remarketing to purchase the Treasury Portfolio and, on or prior to
the third Business Day following the Remarketing Date (such date of settlement
of the Remarketing, the "Remarketing Settlement Date"), and deliver such
Treasury Portfolio to the Collateral Agent, along with notification thereof,
which shall thereupon, for the benefit of the Company, apply such Treasury
Portfolio, to secure the obligation of all Holders of Corporate PIES to purchase
Common Stock under the Purchase Contracts constituting a part of such Corporate
PIES, in substitution for the Pledged Senior Notes, (iii) if any Separated
Senior Notes were remarketed, remit to the Collateral Agent, along with
notification thereof, for payment to the holders of such Separated Senior Notes
sold in the Remarketing the remaining proceeds from such Successful Remarketing
equal to the amounts described in clauses (1)(ii) and (2)(ii) of the definition
of Remarketing Value and (iv) if there then remains any proceeds from such
Successful Remarketing, after the application of such proceeds as set forth in
clauses (i) through (iii) above, then remit, along with notification thereof,
any such remaining proceeds attributable to the remarketed Pledged Senior Notes
to the Purchase Contract Agent for the benefit of the holders of such Pledged
Senior Notes and to the Collateral Agent for benefit of the holders of any
remarketed Separate Senior Notes, on a pro rata basis, PROVIDED, HOWEVER, that
if such Successful Remarketing is consummated after 4:30 p.m. (New York City
time) on such Remarketing Date and, despite using its commercially reasonable
efforts, the Remarketing Agent cannot cause the applications of the proceeds
specified above to occur on such Remarketing Date, then the Remarketing Agent
may make such applications and remittances on the next succeeding Business Day.
Holders of the Remarketing Senior Notes that are so remarketed will not
otherwise be responsible for the payment of any remarketing fee or expenses in
connection with the Remarketing. Following the delivery of the

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                                                                              19

Treasury Portfolio to the Collateral Agent as set forth above in this paragraph,
the Collateral Agent shall have such security interests, rights and obligations
with respect to the Treasury Portfolio as it had in respect of the Pledged
Senior Notes, as provided herein.

                  In the event that any portion of the Pledged Treasury
Portfolio Interest matures before the Purchase Contract Settlement Date, the
Collateral Agent shall invest the Cash Proceeds therefrom in Permitted
Investments in clause 6 of the definition of Permitted Investments, and
identified by the Company in the Account Direction, unless the Company shall
otherwise instruct the Securities Intermediary and the Collateral Agent as to
the type of Permitted Investments in which any such Cash Proceeds shall be
invested. The Collateral Agent shall cause the Securities Intermediary to remit,
on the Purchase Contract Settlement Date, a portion of the Cash Proceeds of the
maturing Pledged Treasury Portfolio Interest and of the investment earnings from
the related investment in Permitted Investments, in an aggregate amount equal to
the Treasury Portfolio Return to the Purchase Contract Agent for the benefit of
the Holders of the related Corporate PIES when received. Without receiving any
instruction from any such Holder of Corporate PIES, the Collateral Agent shall
apply, on the Purchase Contract Settlement Date, the Cash Proceeds of the
maturing Pledged Treasury Portfolio Interest and of the investment earnings from
the related investment in Permitted Investments, in an aggregate amount equal to
the aggregate Purchase Price applicable to such Corporate PIES to satisfy in
full such Holder's obligations to pay the Purchase Price to purchase the shares
of Common Stock under the related Purchase Contracts on the Purchase Contract
Settlement Date. In the event the sum of the Proceeds from the related Pledged
Treasury Portfolio Interest and the investment earnings from the related
investment in Permitted Investments exceeds the sum of the related Treasury
Portfolio Return and the aggregate Purchase Price of the Purchase Contracts
being settled thereby, the Collateral Agent shall instruct the Securities
Intermediary to distribute such excess, when received, to the Purchase Contract
Agent for distribution to the Holders whose Purchase Contracts were settled with
such Proceeds, on a pro rata basis.

                  If, by 4:00 p.m. (New York City time), on the ninth Business
Day preceding the Purchase Contract Settlement Date, the Remarketing Agent,
despite using its commercially reasonable efforts, has been and is unable to
remarket all of the Remarketing Senior Notes tendered for purchase at a price
equal to at least the Remarketing Value, the Remarketing Agent shall Transfer to
the Collateral Agent, along with notification thereof, by the sixth Business Day
preceding the Purchase Contract Settlement Date, the Pledged Senior Notes that
were to be remarketed in the Initial or Subsequent Remarketing, whereupon the
Collateral Agent shall, for the benefit of the Company, apply such Pledged
Senior Notes, to secure the obligation of the related Holders of Corporate PIES
to purchase Common Stock under the related Purchase Contracts.

                  (b) Unless a Termination Event has occurred or a Holder has
effected a Cash Settlement, an Early Settlement or a Merger Early Settlement, or
a Successful Initial Remarketing or a Successful Subsequent Remarketing has
occurred, such Holder shall be deemed to have consented to the Remarketing of
its Pledged Senior Notes in the Final Remarketing on the Final Remarketing Date,
in a Remarketing in accordance with Section 5.3(c) of the Purchase Contract
Agreement. Upon notice of such event from the Purchase Contract Agent, the
Collateral Agent shall, by 11:00 a.m. (New York City time), on the Business Day
immediately preceding the Final Remarketing Date, without any instruction from
such Holders

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                                                                              20

of Corporate PIES, Transfer the Remarketing Senior Notes to the Remarketing
Agent for Remarketing. Upon receiving such Remarketing Senior Notes, the
Remarketing Agent, pursuant to the terms of the Remarketing Agreement, will use
its commercially reasonable efforts to remarket such Remarketing Senior Notes on
the Final Remarketing Date.

                  If the Final Remarketing is successful (a "Successful Final
Remarketing"), the Remarketing Agent will on the Remarketing Date (i) deduct and
retain for itself the Remarketing Fee pursuant to the Remarketing Agreement,
(ii) cause the remaining Proceeds of the Remarketing with respect to the Pledged
Senior Notes in an amount equal to the aggregate principal amount of such Senior
Notes to be delivered to the Purchase Contract Agent, on the Remarketing
Settlement Date, (iii), if any Separated Senior Notes were remarketed, remit to
the Collateral Agent, along with notification thereof, for payment to the
holders of such Separated Senior Notes sold in the Remarketing the remaining
proceeds from such Successful Remarketing attributable to the Separated Senior
Notes in an amount equal to the principal amount of such Senior Notes and (iv)
if there then remains any proceeds from such Successful Remarketing, after the
application of such proceeds as set forth in clauses (i) through (iii) above,
remit, along with notification thereof, any excess Proceeds of the Remarketing
to the Purchase Contract Agent for the benefit of the Holders of Corporate PIES
whose Pledged Senior Notes were remarketed and to the Collateral Agent for the
benefit of the holders of any remarketed Separated Senior Notes, on a pro rata
basis. Holders of the Remarketing Senior Notes that are so remarketed will not
otherwise be responsible for the payment of any remarketing fee or expenses in
connection with the Remarketing. The Purchase Contract Agent shall give written
directions to the Collateral Agent, and the Collateral Agent shall instruct the
Securities Intermediary, to apply a portion of the Proceeds with respect to the
Pledged Senior Notes from such Remarketing, on the Purchase Contract Settlement
Date, equal to the aggregate principal amount of such Pledged Senior Notes to
satisfy in full the obligations of such Holders of Corporate PIES to pay the
Purchase Price to purchase the shares of Common Stock under the related Purchase
Contracts.

                  If a Failed Remarketing occurs, the Collateral Agent, having
received notice of such Failed Remarketing from the Remarketing Agent pursuant
to the Remarketing Agreement, shall, on the written direction of the Company,
exercise for the benefit of the Company, its rights as a secured creditor with
respect to the Pledged Senior Notes related to this Corporate PIES Certificate
and, subject to applicable law, may (i) retain such Pledged Senior Notes in full
satisfaction of the Holders' obligations under the Purchase Contracts or (ii)
sell such Pledged Senior Notes in one or more public or private sales, the
proceeds, if any, of such sale to constitute full satisfaction of the Holders'
obligations under the Purchase Contracts.

                  (c) Unless a Termination Event has occurred or a Holder has
effected a Cash Settlement, an Early Settlement or a Merger Early Settlement, if
a Successful Initial Remarketing or a Successful Subsequent Remarketing has
occurred, a Holder shall be deemed to have elected to pay for the shares of
Common Stock to be issued under such Purchase Contracts from the Proceeds of the
Pledged Treasury Portfolio, in the case of Holders of Corporate PIES, and the
related Pledged Treasury Securities, in the case of Holders of Treasury PIES.

                  (d) In the event that all or any portion of the Pledged
Treasury Securities matures before the Purchase Contract Settlement Date, the
Collateral Agent shall invest the Cash Proceeds therefrom in Permitted
Investments in clause 6 of the definition of Permitted

<PAGE>

                                                                              21

Investments and identified by the Company in the Account Direction, unless the
Company shall otherwise instruct the Securities Intermediary and the Collateral
Agent as to the type of Permitted Investments in which any such Cash Proceeds
shall be invested.

                  (e) Without receiving any instruction from any such Holder of
Treasury PIES, the Collateral Agent shall apply, on the Purchase Contract
Settlement Date, the Cash Proceeds of the maturing Pledged Treasury Securities
and of the investment earnings from the related investment in Permitted
Investments, in each case, in an amount equal to the aggregate Purchase Price
applicable to such Treasury PIES to satisfy in full such Holder's obligations to
pay the Purchase Price to purchase the shares of Common Stock under the related
Purchase Contracts on the Purchase Contract Settlement Date. In the event the
sum of the Proceeds from the related Pledged Treasury Securities and the
investment earnings from the related investment in Permitted Investments exceeds
the aggregate Purchase Price of the Purchase Contracts being settled thereby,
the Collateral Agent shall instruct the Securities Intermediary to distribute
such excess, when received, to the Purchase Contract Agent for distribution to
the Holders whose Purchase Contracts were settled with such Proceeds, on a pro
rata basis.

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

Section 6.   VOTING RIGHTS.

                  The Purchase Contract Agent may exercise, or refrain from
exercising, any and all voting and other consensual rights pertaining to the
Pledged Senior Notes or any part thereof in accordance with the terms of the
Purchase Contract Agreement. The Purchase Contract Agent shall give the Company
and the Collateral Agent at least five calendar days' prior written notice of
the manner in which it intends to exercise, or its reasons for refraining from
exercising, any such right. Upon receipt of any notices and other communications
in respect of any Pledged Senior Notes, including notice of any meeting at which
holders of the Senior Notes are entitled to vote or solicitation of consents,
waivers or proxies of holders of the Senior Notes, the Collateral Agent shall
use its reasonable efforts to send promptly to the Purchase Contract Agent such
notice or communication, and as soon as reasonably practicable after receipt of
a written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such Pledged Senior Notes (in form and substance satisfactory to the Collateral
Agent) as are prepared by the Purchase Contract Agent with respect to the
Pledged Senior Notes.

Section 7.   RIGHTS AND REMEDIES.

         SECTION 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.

                  (a) In addition to the rights and remedies specified in
Section 5.5 hereof or otherwise available at law or in equity, after an event of
default (as specified in Section 7.1(b) below) hereunder, the Collateral Agent
shall have all of the rights and remedies with respect to the Collateral of a
secured party under the UCC (whether or not the UCC is in effect in the

<PAGE>

                                                                              22

jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable law,
(i) retention of the Pledged Senior Notes, Pledged Treasury Portfolio Interest
or Pledged Treasury Securities in full satisfaction of the Holders' obligations
under the Purchase Contracts or (ii) sale of the Pledged Senior Notes, Pledged
Treasury Portfolio Interest or Pledged Treasury Securities in one or more public
or private sales.

                  (b) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral Agent is
unable to make payments to the Company on account of principal payments of any
Pledged Treasury Securities or on account of any Pledged Treasury Portfolio
Interest as provided in Section 3 hereof, in satisfaction of the Obligations of
the Holder of the PIES of which such Pledged Treasury Securities or Pledged
Treasury Portfolio Interest are a part under the related Purchase Contracts, the
inability to make such payments shall constitute an event of default hereunder
and the Collateral Agent shall have and may exercise, with reference to such
Pledged Treasury Securities or Pledged Treasury Portfolio Interest, as
applicable, any and all of the rights and remedies available to a secured party
under the UCC and the TRADES Regulations after default by a debtor, and as
otherwise granted herein or under any other law.

                  (c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) the principal
amount of the Pledged Senior Notes, (ii) the principal amount of the Pledged
Treasury Securities and (iii) the principal amount of the Pledged Treasury
Portfolio Interest, subject, in each case, to the provisions of Section 3
hereof, and as otherwise granted herein.

                  (d) Subject to Section 9.1, the Purchase Contract Agent and
each Holder of PIES agrees that, from time to time, upon the written request of
the Collateral Agent, the Purchase Contract Agent or such Holder shall execute
and deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own grossly negligent
acts, its own grossly negligent failure to act or its own willful misconduct.

         SECTION 7.2   SUBSTITUTIONS.

                  Whenever a Holder has the right to substitute Treasury
Securities, Senior Notes or security entitlements to either of them for
financial assets held in the Collateral Account, such substitution shall not
constitute a novation of the security interest created hereby.

<PAGE>

                                                                              23

Section 8.   REPRESENTATIONS AND WARRANTIES; COVENANTS.

         SECTION 8.1   REPRESENTATIONS AND WARRANTIES.

                  Each Holder from time to time, acting through the Purchase
Contract Agent as attorney-in-fact (it being understood that the Purchase
Contract Agent shall not be liable for any representation or warranty made by or
on behalf of a Holder), hereby represents and warrants to the Collateral Agent
(with respect to its interest in the Collateral), which representations and
warranties shall be deemed repeated on each day a Holder Transfers Collateral
that:

                  (1) such Holder has the power to grant a security interest in
         and lien on the Collateral;

                  (2) such Holder is the sole beneficial owner of the Collateral
         and, in the case of Collateral delivered in physical form, is the sole
         holder of such Collateral and is the sole beneficial owner of, or has
         the right to Transfer, the Collateral it Transfers to the Securities
         Intermediary for credit to the Collateral Account, free and clear of
         any security interest, lien, encumbrance, call, liability to pay money
         or other restriction other than the security interest and lien granted
         under Section 2 hereof;

                  (3) upon the Transfer of the Collateral to the Securities
         Intermediary for credit to the Collateral Account, the Collateral
         Agent, for the benefit of the Company, will have a valid and perfected
         first priority security interest therein (assuming that any central
         clearing operation or any Securities Intermediary or other entity not
         within the control of the Holder involved in the Transfer of the
         Collateral, including the Collateral Agent and the Securities
         Intermediary, gives the notices and takes the action required of it
         hereunder and under applicable law for perfection of that interest and
         assuming the establishment and exercise of control pursuant to Section
         4 hereof); and

                  (4) the execution and performance by the Holder of its
         obligations under this Agreement will not result in the creation of any
         security interest, lien or other encumbrance on the Collateral other
         than the security interest and lien granted under Section 2 hereof or
         violate any provision of any existing law or regulation applicable to
         it or of any mortgage, charge, pledge, indenture, contract or
         undertaking to which it is a party or which is binding on it or any of
         its assets.

         SECTION 8.2   COVENANTS.

                  The Purchase Contract Agent and the Holders from time to time,
acting through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any covenant
made by or on behalf of a Holder), hereby covenant to the Collateral Agent that
for so long as the Collateral remains subject to the Pledge:

                  (1) neither the Purchase Contract Agent nor such Holders will
         create or purport to create or allow to subsist any mortgage, charge,
         lien, pledge or any other security interest whatsoever over the
         Collateral or any part of it other than pursuant to this Agreement; and

<PAGE>

                                                                              24

                  (2) neither the Purchase Contract Agent nor such Holders will
         sell or otherwise dispose (or attempt to dispose) of the Collateral or
         any part of it except for the beneficial interest therein, subject to
         the Pledge hereunder, transferred in connection with the Transfer of
         the PIES.

Section 9.   THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY.

                  It is hereby agreed as follows:

         SECTION  9.1  APPOINTMENT, POWERS AND IMMUNITIES.

                  The Collateral Agent and the Securities Intermediary shall
each act solely as agent for the Company hereunder and not in its individual
capacity with such powers as are specifically vested in the Collateral Agent or
the Securities Intermediary, as the case may be, by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent and the Securities Intermediary shall:

                  (1) have no duties or responsibilities except those expressly
         set forth in this Agreement and no implied covenants or obligations
         shall be inferred from this Agreement against the Collateral Agent or
         the Securities Intermediary, nor shall the Collateral Agent or the
         Securities Intermediary be bound by the provisions of any agreement by
         any party hereto beyond the specific terms hereof;

                  (2) not be responsible for, and neither the Collateral Agent
         nor the Securities Intermediary makes any representation or warranty
         with respect to, any recitals contained in this Agreement, or in any
         certificate or other document referred to or provided for in, or
         received by it under, this Agreement, the PIES or the Purchase Contract
         Agreement, or for the value, validity, effectiveness, genuineness,
         enforceability or sufficiency of this Agreement (other than as against
         the Collateral Agent or the Securities Intermediary, as the case may
         be), the PIES or the Purchase Contract Agreement or any other document
         referred to or provided for herein or therein or for any failure by the
         Company or any other Person (except the Collateral Agent or the
         Securities Intermediary, as the case may be) to perform any of its
         obligations hereunder or thereunder or for the due creation,
         perfection, priority or, except, in the case of the Collateral Agent,
         as expressly required hereby, maintenance of any security interest
         created hereunder;

                  (3) not be required to initiate or conduct any litigation or
         collection proceedings hereunder (except, in the case of the Collateral
         Agent, pursuant to directions furnished under Section 9.2 hereof,
         subject to Section 9.6 hereof);

                  (4) not be responsible for any action taken or omitted to be
         taken by it hereunder or under any other document or instrument
         referred to or provided for herein or in connection herewith or
         therewith, except for its own gross negligence or willful misconduct;
         and

                  (5) not be required to advise any party as to selling or
         retaining, or taking or refraining from taking any action with respect
         to, any securities or other property deposited hereunder.

<PAGE>

                                                                              25

Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.

                  No provision of this Agreement shall require the Collateral
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder. Notwithstanding the
foregoing, each of the Collateral Agent and the Securities Intermediary in its
individual capacity hereby waives any right of setoff, bankers' lien, liens or
perfection rights as Securities Intermediary or any counterclaim with respect to
any of the Collateral.

         SECTION 9.2   INSTRUCTIONS OF THE COMPANY.

                  The Company shall have the right, by one or more instruments
in writing executed and delivered to the Collateral Agent, to direct the time,
method and place of conducting any proceeding for the realization of any right
or remedy available to the Collateral Agent, or of exercising any power
conferred on the Collateral Agent, or to direct the taking or refraining from
taking of any action authorized by this Agreement; PROVIDED, HOWEVER, that (i)
such direction shall not conflict with the provisions of any law or of this
Agreement and (ii) the Collateral Agent shall be adequately indemnified as
provided herein. Nothing contained in this Section 9.2 shall impair the right of
the Collateral Agent in its discretion to take any action or omit to take any
action which it deems proper and which is not inconsistent with such direction.

                  In the event the Collateral Agent or the Securities
Intermediary is uncertain as to the application of any provision in this
Agreement or any other agreement relating to the transactions contemplated
hereby, or such provision is ambiguous as to its application or is, or appears
to be, in conflict with any other applicable provision hereof, or in the event
this Agreement permits any determination by the Collateral Agent or the
Securities Intermediary or is silent or incomplete as to the course of action
the Collateral Agent or the Securities Intermediary is required to take with
respect to a particular set of facts, the Collateral Agent or the Securities
Intermediary may seek instructions from the Company and shall not be liable to
any Person to the extent that it acts in good faith in accordance with the
instructions of the Company; PROVIDED, that, if the Collateral Agent or the
Securities Intermediary shall not have received instructions from the Company
pursuant to its request within twenty (20) days after the date of such request,
until instructed otherwise by the Company, the Collateral Agent or the
Securities Intermediary may, but shall be under no duty to, take or refrain from
taking such action as it shall deem advisable in the best interests of the
Company.

         SECTION 9.3   RELIANCE BY COLLATERAL AGENT AND SECURITIES INTERMEDIARY.

                  Each of the Securities Intermediary and the Collateral Agent
shall be entitled to rely upon, and shall not incur any liability to anyone in
acting upon, any certification, order, judgment, opinion, notice, instructions
or other communication (including, without limitation, any thereof by telephone,
telecopy, telex or facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact or matter
stated therein) and upon advice and statements of legal counsel and other
experts selected by the Collateral Agent or the Securities

<PAGE>

                                                                              26

Intermediary, as the case may be. As to any matters not expressly provided for
by this Agreement, the Collateral Agent and the Securities Intermediary shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
in accordance with instructions given by the Company in accordance with Section
9.2 of this Agreement.

         SECTION 9.4   RIGHTS IN OTHER CAPACITIES.

                  The Collateral Agent and the Securities Intermediary and their
affiliates may (without having to account therefor to the Company) accept
deposits from, lend money to, make their investments in and generally engage in
any kind of banking, trust or other business with the Purchase Contract Agent or
the Securities Intermediary, as the case may be, any other Person interested
herein and any Holder of PIES (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of PIES without having to account for
the same to the Company; PROVIDED that each of the Securities Intermediary and
the Collateral Agent covenants and agrees with the Company that it shall not
accept, receive or permit there to be created in favor of itself and shall take
no affirmative action to permit there to be created in favor of any other
Person, any security interest, lien or other encumbrance of any kind in or upon
the Collateral other than the lien created by the Pledge.

         SECTION   9.5 NON-RELIANCE ON COLLATERAL AGENT AND SECURITIES
INTERMEDIARY.

                  Neither the Securities Intermediary nor the Collateral Agent
shall be required to keep itself informed as to the performance or observance by
the Purchase Contract Agent or any Holder of PIES of this Agreement, the
Purchase Contract Agreement, the PIES or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Purchase Contract Agent or any Holder of PIES. Neither the Collateral Agent nor
the Securities Intermediary shall have any duty or responsibility to provide the
Company with any credit or other information concerning the affairs, financial
condition or business of the Purchase Contract Agent or any Holder of PIES (or
any of their respective affiliates) that may come into the possession of the
Collateral Agent or the Securities Intermediary or any of their respective
affiliates.

         SECTION 9.6   COMPENSATION AND INDEMNITY.

                  The Company agrees to:

                  (1) pay the Collateral Agent and the Securities Intermediary
         from time to time such compensation as shall be agreed in writing
         between the Company and the Collateral Agent or the Securities
         Intermediary, as the case may be, for all services rendered by them
         hereunder; and

                  (2) indemnify the Collateral Agent and the Securities
         Intermediary for, and to hold each of them harmless from and against,
         any loss, liability or reasonable out-of-pocket expense incurred
         without gross negligence, willful misconduct or bad faith on its part,
         arising out of or in connection with the acceptance or administration
         of its powers and duties under this Agreement, including the reasonable
         costs and expenses (including

<PAGE>

                                                                              27

         reasonable fees and expenses of counsel) of defending itself against
         any claim or liability in connection with the exercise or performance
         of such powers and duties.

         SECTION 9.7   FAILURE TO ACT.

                  Subject to Section 9.2 of this Agreement, in the event of any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Securities Intermediary shall be entitled, after prompt
notice to the Company and the Purchase Contract Agent, at its sole option, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and the Collateral Agent and the Securities Intermediary shall not be or become
liable in any way to any of the parties hereto for its failure or refusal to
comply with such conflicting claims, demands or instructions. The Collateral
Agent and the Securities Intermediary shall be entitled to refuse to act until
either:

                  (1) such conflicting or adverse claims or demands shall have
         been finally determined by a court of competent jurisdiction or settled
         by agreement between the conflicting parties as evidenced in a writing
         satisfactory to the Collateral Agent or the Securities Intermediary; or

                  (2) the Collateral Agent or the Securities Intermediary shall
         have received security or an indemnity satisfactory to it sufficient to
         save it harmless from and against any and all loss, liability or
         reasonable out-of-pocket expense which it may incur by reason of its
         acting.

The Collateral Agent and the Securities Intermediary may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Securities Intermediary shall be required to take any
action that is in its opinion contrary to law or to the terms of this Agreement,
or which would in its opinion subject it or any of its officers, employees or
directors to liability.

         SECTION   9.8 RESIGNATION OF COLLATERAL AGENT AND SECURITIES
INTERMEDIARY.

                  (a) Subject to the appointment and acceptance of a successor
Collateral Agent as provided below:

                  (1) the Collateral Agent may resign at any time by giving
         notice thereof to the Company, the Purchase Contract Agent as
         attorney-in-fact for the Holders of PIES and the Trustee;

                  (2) the Collateral Agent may be removed at any time by the
         Company; and

                  (3) if the Collateral Agent fails to perform any of its
         material obligations hereunder in any material respect for a period of
         not less than 20 days after receiving written notice of such failure by
         the Purchase Contract Agent and such failure shall be continuing, the
         Collateral Agent may be removed by the Purchase Contract Agent;
         PROVIDED, HOWEVER, that neither this provision nor any other provision
         of this Agreement or

<PAGE>

                                                                              28

         the Purchase Contract Agreement shall require the Purchase Contract
         Agent to keep itself informed as to or to monitor the performance or
         observance by the Collateral Agent or the Securities Intermediary of
         their obligations hereunder.

The Purchase Contract Agent shall promptly notify the Company of any removal
of the Collateral Agent pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the
right to appoint a successor Collateral Agent. If no successor Collateral
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Collateral Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent. The Collateral Agent shall be a bank which has an office in
New York, New York or Minneapolis, Minnesota with a combined capital and
surplus of at least $50,000,000 and shall not be the Purchase Contract Agent
or any of its affiliates. Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and
the retiring Collateral Agent shall take all appropriate action to transfer
any money and property held by it hereunder (including the Collateral) to
such successor Collateral Agent. The retiring Collateral Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent hereunder. After any retiring Collateral Agent's resignation hereunder
as Collateral Agent, the provisions of this Section 9 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Collateral Agent. Any resignation or removal
of the Collateral Agent hereunder shall be deemed for all purposes of this
Agreement as the simultaneous resignation or removal, as the case may be, of
the Securities Intermediary.

                  (b) Subject to the appointment and acceptance of a successor
Securities Intermediary as provided below:

                  (1) the Securities Intermediary may resign at any time by
         giving notice thereof to the Company, the Purchase Contract Agent as
         attorney-in-fact for the Holders of PIES and the Trustee;

                  (2) the Securities Intermediary may be removed at any time by
         the Company; and

                  (3) if the Securities Intermediary fails to perform any of its
         material obligations hereunder in any material respect for a period of
         not less than 20 days after receiving written notice of such failure by
         the Purchase Contract Agent and such failure shall be continuing, the
         Securities Intermediary may be removed by the Purchase Contract Agent.

The Purchase Contract Agent shall promptly notify the Company of any removal of
the Securities Intermediary pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Securities Intermediary. If no successor Securities
Intermediary shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Securities Intermediary's giving
of notice of resignation or such removal, then the retiring Securities
Intermediary may petition any court of competent jurisdiction for the
appointment of a successor Securities Intermediary. The Securities Intermediary
shall be a bank which has an office in New York, New York with a

<PAGE>

                                                                              29

combined capital and surplus of at least $50,000,000 and shall not be the
Purchase Contract Agent or any of its affiliates. Upon the acceptance of any
appointment as Securities Intermediary hereunder by a successor Securities
Intermediary, such successor Securities Intermediary shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Securities Intermediary, and the retiring Securities Intermediary shall
take all appropriate action to transfer any money and property held by it
hereunder (including the Collateral) to such successor Securities Intermediary.
The retiring Securities Intermediary shall, upon such succession, be discharged
from its duties and obligations as Securities Intermediary hereunder. After any
retiring Securities Intermediary's resignation hereunder as Securities
Intermediary, the provisions of this Section 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Securities Intermediary.

         SECTION 9.9   RIGHT TO APPOINT AGENT OR ADVISOR.

                  The Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith. The
appointment of agents pursuant to this Section 9.9 shall be subject to prior
consent of the Company, which consent shall not be unreasonably withheld.

         SECTION 9.10   SURVIVAL.

                  The provisions of this Section 9 shall survive termination of
this Agreement and the resignation or removal of the Collateral Agent or the
Securities Intermediary.

         SECTION 9.11   EXCULPATION.

                  Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, directors, employees or agents be liable under
this Agreement to any third party for indirect, special, punitive or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent or the Securities Intermediary, or any of them, incurred without any act
or deed that is found to be attributable to gross negligence or willful
misconduct on the part of the Collateral Agent or the Securities Intermediary.
Any and all exculpatory provisions, immunities and indemnities in favor of the
Collateral Agent or the Securities Intermediary under this Agreement shall inure
to the benefit of the Collateral Agent or the Securities Intermediary, as
applicable, in its individual capacity or as a party to any agreement referred
to herein or therein, whether or not expressly so provided.

Section 10.   AMENDMENT.

         SECTION 10.1   AMENDMENT WITHOUT CONSENT OF HOLDERS.

                  Without the consent of any Holders, the Company (when
authorized by a Board Resolution), the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, at any time and from time to time,
may amend this Agreement, in form satisfactory to the Company, the Collateral
Agent, the Securities Intermediary and the Purchase Contract Agent, to:

<PAGE>

                                                                              30

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

                  (2) evidence and provide for the acceptance of appointment
         hereunder by a successor Collateral Agent, Securities Intermediary or
         Purchase Contract Agent;

                  (3) add to the covenants of the Company for the benefit of the
         Holders, or to surrender any right or power herein conferred upon the
         Company, PROVIDED such covenants or such surrender do not adversely
         affect the validity, perfection or priority of the Pledge created
         hereunder; or

                  (4) cure any ambiguity (or formal defect), to correct or
         supplement any provisions herein which may be inconsistent with any
         other such provisions herein, or to make any other provisions with
         respect to such matters or questions arising under this Agreement,
         PROVIDED such action shall not adversely affect the interests of the
         Holders.

         SECTION 10.2   AMENDMENT WITH CONSENT OF HOLDERS.

                  With the consent of the Holders of not less than a majority of
the Purchase Contracts at the time outstanding, by Act of said Holders delivered
to the Company, the Purchase Contract Agent, the Securities Intermediary and the
Collateral Agent, the Company, when duly authorized by a Board Resolution, the
Purchase Contract Agent, the Securities Intermediary and the Collateral Agent
may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
PIES; PROVIDED, HOWEVER, that no such supplemental agreement shall, without the
unanimous consent of the Holders of each Outstanding PIES adversely affected
thereby, other than as expressly contemplated by the Agreement,

                  (1) change the amount or type of Collateral underlying a PIES,
         impair the right of the Holder of any PIES to receive distributions on
         the underlying Collateral or otherwise adversely affect the Holder's
         rights in or to such Collateral;

                  (2) otherwise effect any action that would require the consent
         of the Holder of each Outstanding PIES affected thereby pursuant to the
         Purchase Contract Agreement if such action were effected by an
         agreement supplemental thereto; or

                  (3) reduce the percentage of Purchase Contracts the consent of
         whose Holders is required for any such amendment;

PROVIDED that if any amendment or proposal referred to above would adversely
affect only the Corporate PIES or only the Treasury PIES after PIES of such
class are created and remain Outstanding, then only the affected class of Holder
as of the record date for the Holders entitled to vote thereon will be entitled
to vote on such amendment or proposal, and such amendment or proposal shall not
be effective except with the consent of Holders of not less than a majority of
such class; PROVIDED, FURTHER, that the unanimous consent of the Holders of each
outstanding Purchase Contract of such class affected thereby shall be required
to approve any amendment or proposal specified in clauses (1) through (3) above.

<PAGE>

                                                                              31

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

         SECTION 10.3   EXECUTION OF AMENDMENTS.

                  In executing any amendment permitted by this Section, the
Collateral Agent, the Securities Intermediary and the Purchase Contract Agent
shall be entitled to receive and (subject to Section 7.1 of the Purchase
Contract Agreement with respect to the Purchase Contract Agent) shall be fully
protected in relying upon, an Opinion of Counsel (as defined in the Purchase
Contract Agreement) stating that the execution of such amendment is authorized
or permitted by this Agreement and that all conditions precedent, if any, to the
execution and delivery of such amendment have been satisfied.

         SECTION 10.4   EFFECT OF AMENDMENTS.

                  Upon the execution of any amendment under this Section, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered under the Purchase Contract Agreement shall be bound thereby.

         SECTION 10.5   REFERENCE TO AMENDMENTS.

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

Section 11.   MERGER, CONSOLIDATION, SALE OR CONVEYANCE.

         SECTION 11.1   WHEN COMPANY MAY MERGE, ETC.

                  The Company shall not consolidate with or merge into, or sell,
lease (for a term extending beyond the last stated maturity of the PIES and the
Senior Notes then Outstanding) or convey all or substantially all of its assets
to, any Person or group of Affiliated Persons in one transaction or a series of
related transactions, unless the Company shall be the continuing corporation, or
the successor or transferee Person expressly assumes by one or more supplemental
agreements, in form satisfactory to the Collateral Agent, all the obligations of
the Company with respect to this Agreement, and the Company or the successor or
transferee Person, as the case may be, (i) shall be a Corporation organized and
existing under the laws of one of the states in the United States and (ii) shall
not, immediately after such consolidation or merger or sale, lease or
conveyance, be in default in the performance or any covenant or

<PAGE>

                                                                              32

condition hereunder. The Company shall deliver to the Collateral Agent an
Officers' Certificate (as defined in the Original Indenture) and an Opinion of
Counsel (as defined in the Original Indenture), each stating that such
consolidation, merger sale, lease or conveyance and such supplemental agreement
comply with this Agreement and that all conditions precedent to the consummation
of any such consolidation, or merger, or any sale, lease or conveyance have been
met.

         SECTION 11.2   SUCCESSOR CORPORATION SUBSTITUTED.

                  Upon any consolidation or merger, or any sale, lease or
conveyance of all or substantially all of the assets of the Company in
accordance with Section 11.1, the successor corporation or the transferee
corporation formed by such consolidation or into which the Company is merged or
to which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement with the
same effect as if such successor corporation had been named as the Company
herein.

                  Such successor or transferee Person thereupon may cause to be
signed, and may issue either in its own name or in the name of Sierra Pacific
Resources, any or all of the Certificates evidencing PIES issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Purchase Contract Agent; and, upon the order of such successor or such
transferee Person, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Purchase Contract
Agent shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Purchase Contract Agent for authentication and
execution, and any Certificate evidencing PIES which such successor corporation
or transferee corporation thereafter shall cause to be signed and delivered to
the Purchase Contract Agent for that purpose. All the Certificates issued shall
in all respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.

                  In case of any such merger, consolidation, share exchange,
sale, assignment, transfer, lease or conveyance such change in phraseology and
form (but not in substance) may be made in the Certificates evidencing PIES
thereafter to be issued as may be appropriate.

         SECTION 11.3   LIMITATION.

                  Nothing in this Agreement shall be deemed to prevent or
restrict; (a) any consolidation or merger after the consummation of which the
Company would be the surviving or resulting entity or any conveyance or other
transfer or lease of any part of the properties of the Company which does not
constitute the entirety, or substantially the entirety, thereof; or (b) the
approval by the Company of, or the consent by the Company to, any consolidation
or merger to which any Restricted Subsidiary (as defined in the Original
Indenture) or any other subsidiary or affiliate of the Company may be a party or
any conveyance, transfer or lease by any Subsidiary (as defined in the Original
Indenture) or any such other subsidiary or affiliate of any of its assets.

<PAGE>

                                                                              33

Section 12.   MISCELLANEOUS.

         SECTION 12.1   NO WAIVER.

                  No failure on the part of the Collateral Agent or any of its
agents to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Collateral Agent or any
of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

         SECTION 12.2   GOVERNING LAW; JURISDICTION AND VENUE.

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

                  The Company, the Collateral Agent, the Securities
Intermediary, the Purchase Contract Agent and the Holders from time to time of
the PIES, acting through the Purchase Contract Agent as their attorney-in-fact,
hereby submit to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal proceedings arising out
of or relating to this Agreement or the transactions contemplated hereby. The
Company, the Collateral Agent, the Securities Intermediary and the Holders from
time to time of the PIES, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

         SECTION 12.3   NOTICES.

                  All notices, requests, consents and other communications
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the intended recipient
specified below. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.

<PAGE>

                                                                              34

                  If to the Company:

                  Sierra Pacific Resources
                  6100 Neil Road
                  P.O. Box 30150
                  Reno, Nevada  89520-0400
                  Telecopier No.: (775) 834-5462
                  Attention: Treasurer

                  If to the Collateral Agent or the Securities Intermediary:

                  Wells Fargo Bank Minnesota, National Association
                  Sixth and Marquette
                  MAC N9303-120
                  Minneapolis, Minnesota  55479
                  Telecopier No.: (612) 667-9825
                  Attention: Jane Schweiger

                  If to the Purchase Contract Agent or the Trustee:

                  The Bank of New York
                  101 Barclay Street, Floor 21 West
                  New York, New York  10286
                  Telecopier No.: (212) 896-7298
                  Attention: Corporate Trust Administration

         SECTION 12.4   SUCCESSORS AND ASSIGNS.

                  This Agreement shall be binding upon and inure to the benefit
of the respective successors and assigns of the Company, the Collateral Agent,
the Securities Intermediary and the Purchase Contract Agent, and the Holders
from time to time of the PIES, by their acceptance of the same, shall be deemed
to have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.

         SECTION 12.5   COUNTERPARTS.

                  This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument, and
any of the parties hereto may execute this Agreement by signing any such
counterpart.

<PAGE>

                                                                              35

         SECTION 12.6   EFFECT OF HEADINGS AND TABLE OF CONTENTS.

         The headings and table of contents contained in this Agreement shall
not constitute a part, or to effect the meaning or interpretation of, this
Agreement.

         SECTION 12.7   SEVERABILITY.

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

         SECTION 12.8   EXPENSES, ETC.

                  The Company agrees to reimburse the Collateral Agent and the
Securities Intermediary for:

                  (1) all reasonable costs and expenses of the Collateral Agent
         and the Securities Intermediary (including, without limitation, the
         reasonable fees and expenses of counsel to the Collateral Agent and the
         Securities Intermediary), in connection with (i) the negotiation,
         preparation, execution and delivery or performance of this Agreement
         and (ii) any modification, supplement or waiver of any of the terms of
         this Agreement;

                  (2) all reasonable costs and expenses of the Collateral Agent
         and the Securities Intermediary (including, without limitation,
         reasonable fees and expenses of counsel) in connection with (i) any
         enforcement or proceedings resulting or incurred in connection with
         causing any Holder of PIES to satisfy its obligations under the
         Purchase Contracts forming a part of the PIES and (ii) the enforcement
         of this Section 12.8; and

                  (3) all transfer, stamp, documentary or other similar taxes,
         assessments or charges levied by any governmental or revenue authority
         in respect of this Agreement or any other document referred to herein
         and all costs, expenses, taxes, assessments and other charges incurred
         in connection with any filing, registration, recording or perfection of
         any security interest contemplated hereby.

         SECTION 12.9   SECURITY INTEREST ABSOLUTE.

                  All rights of the Collateral Agent and security interests
hereunder, and all obligations of the Holders from time to time hereunder, shall
be absolute and unconditional irrespective of:

                  (1) any lack of validity or enforceability of any provision of
         the Purchase Contracts or the PIES or any other agreement or instrument
         relating thereto;

                  (2) any change in the time, manner or place of payment of, or
         any other term of, or any increase in the amount of, all or any of the
         obligations of Holders of the PIES under the related Purchase
         Contracts, or any other amendment or waiver of any term of,

<PAGE>

                                                                              36

         or any consent to any departure from any requirement of, the Purchase
         Contract Agreement or any Purchase Contract or any other agreement or
         instrument relating thereto; or

                  (3) any other circumstance which might otherwise constitute a
         defense available to, or discharge of, a borrower, a guarantor or a
         pledgor.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                            SIERRA PACIFIC RESOURCES

                            By:
                               ------------------------------------------------
                               Name:
                               Title:

                            THE BANK OF NEW YORK, not individually but solely as
                            Purchase Contract Agent and as attorney-in-fact of
                            the Holders from time to time of the PIES

                            By:
                               ------------------------------------------------
                               Name:
                               Title:

                            WELLS FARGO BANK MINNESOTA,
                            NATIONAL ASSOCIATION, as Collateral Agent

                            By:
                               ------------------------------------------------
                               Name:
                               Title:

                            WELLS FARGO BANK MINNESOTA,
                            NATIONAL ASSOCIATION, as Securities Intermediary

                            By:
                               ------------------------------------------------
                               Name:
                               Title:

<PAGE>

                                                                      EXHIBIT A

                                     NOTICE
                FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
                           (Creation of Treasury PIES)

Wells Fargo Bank Minnesota, National Association, as Collateral Agent
Sixth and Marquette
MAC N9303-120
Minneapolis, Minnesota  55479
Attention: Jane Schweiger
Fax (612) 667-9825

                  Re: PIES OF SIERRA PACIFIC RESOURCES

         Reference is made to the Pledge Agreement dated as of November 16, 2001
(the "Pledge Agreement"), among Sierra Pacific Resources (the "Company"), you,
as Collateral Agent and as Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.

         We hereby notify you that, in accordance with Section 5.2 of the Pledge
Agreement and Section 3.13 of the Purchase Contract Agreement, the holder of
securities named below (the "Holder") has elected to substitute $__________
Value of Treasury Securities (CUSIP No. ) in exchange for an equal Value of
Pledged Senior Notes and has delivered to the undersigned Purchase Contract
Agent a notice stating that the Holder has Transferred such Treasury Securities
to the Securities Intermediary, for credit to the Collateral Account.

         We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities have been credited to the Collateral
Account, to release by Transfer to the undersigned Purchase Contract Agent, on
behalf of the undersigned Holder an equal Value of Pledged Senior Notes in
accordance with Section 5.2 of the Pledge Agreement.

                                     THE BANK OF NEW YORK,
                                     as Purchase Contract Agent

                                     By:
                                        ---------------------------------------
                                        Name:
                                        Title:
                                        Date:

         Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the Pledged Senior Notes:

-----------------------------------------------------
         Name of Holder

-----------------------------------------------------
         TRADES Account No.

-----------------------------------------------------
Social Security or Taxpayer Identification Number

-----------------------------------------------------
         Address

<PAGE>

                                                                      EXHIBIT B

                                     NOTICE
                FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY
                           (Creation of Treasury PIES)

Wells Fargo Bank Minnesota, National Association, as Securities Intermediary
Sixth and Marquette
MAC N9303-120
Minneapolis, Minnesota  55479
Attention: Jane Schweiger
Fax (612) 667-9825

                  Re: PIES OF SIERRA PACIFIC RESOURCES

                      Securities Account No. 11874500 entitled "Wells Fargo Bank
                      Minnesota, National Association, as Collateral Agent,
                      Securities Account (Sierra Pacific Resources)" (the
                      "Collateral Account")

         Reference is made to the Pledge Agreement, dated as of November 16,
2001 (the "Pledge Agreement"), among Sierra Pacific Resources (the "Company"),
you, as Securities Intermediary, The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the holders of PIES from time to time, and the
undersigned, as Collateral Agent. Capitalized terms used herein but not defined
shall have the meanings attributable to them in the Pledge Agreement.

         When you have confirmed that $__________ Value of Treasury Securities
(CUSIP No. ) has been credited to the Collateral Account by or for the benefit
of _________, as Holder of PIES (the "Holder"), you are hereby instructed to
release from the Collateral Account an equal Value of Senior Notes by Transfer
to the Purchase Contract Agent in accordance with Section 5.2 of the Pledge
Agreement.

                                  WELLS FARGO BANK MINNESOTA, NATIONAL
                                  ASSOCIATION,
                                  as Collateral Agent

                                  By:
                                     ------------------------------------------
                                     Name:
                                     Title:
                                     Date:

         Please print name and address of Holder:

--------------------------------------------------------
         Name

--------------------------------------------------------
         TRADES Account No.

--------------------------------------------------------
Social Security or Taxpayer Identification Number

--------------------------------------------------------
         Address

<PAGE>

                                                                      EXHIBIT C

                                     NOTICE
                FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
                         (Recreation of Corporate PIES)

Wells Fargo Bank Minnesota, National Association, as Collateral Agent
Sixth and Marquette
MAC N9303-120
Minneapolis, Minnesota  55479
Attention: Jane Schweiger
Fax (612) 667-9825

                  Re: PIES OF SIERRA PACIFIC RESOURCES

         Reference is made to the Pledge Agreement, dated as of November 16,
2001 (the "Pledge Agreement"), among Sierra Pacific Company (the "Company"),
you, as Collateral Agent and as Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.

         We hereby notify you that, in accordance with Section 5.3 of the Pledge
Agreement and Section 3.14 of the Purchase Contract Agreement, the holder of
securities listed below (the "Holder") has elected to substitute $__________
Value of Senior Notes in exchange for $__________ Value of Pledged Treasury
Securities and has delivered to the undersigned a notice stating that the Holder
has Transferred such Senior Notes or security entitlements thereto to the
Securities Intermediary, for credit to the Collateral Account.

         We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Senior Notes have been credited to the Collateral
Account, to release to the undersigned Holder an equal Value of Treasury
Securities or security entitlements thereto related to _____ Treasury PIES of
such Holder in accordance with Section 5.3 of the Pledge Agreement and Section
3.14 of the Purchase Contract Agreement.

                           THE BANK OF NEW YORK,
                           as Purchase Contract Agent

                           By:
                              -------------------------------------------------
                              Name:
                              Title:
                              Date:

Please print name and address of Holder electing to substitute Pledged Senior
Notes or security entitlements thereto for Pledged Treasury Securities:

--------------------------------------------------------
          Name

--------------------------------------------------------
          DTC Participant No.

--------------------------------------------------------
Social Security or Taxpayer Identification Number

--------------------------------------------------------
          Address

<PAGE>

                                                                      EXHIBIT D

                                     NOTICE
                FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY
                         (Recreation of Corporate PIES)

Wells Fargo Bank Minnesota, National Association, as Securities Intermediary
Sixth and Marquette
MAC N9303-120
Minneapolis, Minnesota  55479
Attention: Jane Schweiger
Fax  (612) 667-9825

                  Re: PIES OF SIERRA PACIFIC RESOURCES

                      Securities Account No. 11874500 entitled "Wells Fargo Bank
                      Minnesota, National Association, as Collateral Agent,
                      Securities Account (Sierra Pacific Resources)"

         Reference is made to the Pledge Agreement, dated as of November 16,
2001 (the "Pledge Agreement"), among Sierra Pacific Resources (the "Company"),
you, as Securities Intermediary, The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the holders of PIES from time to time, and the
undersigned, as Collateral Agent. Capitalized terms used herein but not defined
shall have the meanings attributable to them in the Pledge Agreement.

         When you have confirmed that $_________ Value of Senior Notes has been
credited to the Collateral Account by or for the benefit of _________, as Holder
of PIES (the "Holder"), you are hereby instructed to release from the Collateral
Account $__________ Value of Treasury Securities (CUSIP No. ) or security
entitlements thereto by Transfer to the undersigned Holder in accordance with
Section 5.3 of the Pledge Agreement.

                                       WELLS FARGO BANK MINNESOTA, NATIONAL
                                       ASSOCIATION, as Collateral Agent

                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:
                                          Date:

Please print name and address of Holder:

--------------------------------------------------------
          Name

--------------------------------------------------------
DTC Participant No.

--------------------------------------------------------
Social Security or Taxpayer Identification Number

--------------------------------------------------------
          Address

<PAGE>

                                                                      EXHIBIT E

                            NOTICE OF CASH SETTLEMENT
             FROM SECURITIES INTERMEDIARY TO PURCHASE CONTRACT AGENT
                            (Cash Settlement Amounts)

The Bank of New York, as Purchase Contract Agent
101 Barclay Street, Floor 21 West
New York, New York  10286
Attention: Corporate Trust Administration
Fax: (212) 896-7298

                  Re: PIES OF SIERRA PACIFIC RESOURCES

         Reference is made to the Pledge Agreement, dated as of November 16,
2001 (the "Pledge Agreement"), among Sierra Pacific Resources (the "Company"),
you, as Purchase Contract Agent and as attorney-in-fact for the holders of PIES
from time to time, as Collateral Agent and the undersigned, as Securities
Intermediary. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.

         In accordance with Section [5.5(d)] [5.5(e)] of the Pledge Agreement,
we hereby notify you that as of 11:00 a.m. (New York City time), [on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date] [on
the Business Day immediately preceding the Purchase Contract Settlement Date],
we have received [$_____ in immediately available funds paid in an aggregate
amount equal to the Purchase Price to the Company on the Purchase Contract
Settlement Date with respect to __________ Corporate PIES] [$_________ in
immediately available funds paid in an aggregate amount equal to the Purchase
Price to the Company on the Purchase Contract Settlement Date with respect to
______ Treasury PIES.]

                                             WELLS FARGO BANK MINNESOTA,
                                             NATIONAL ASSOCIATION,
                                             as Securities Intermediary

                                             By:
                                                -------------------------------
                                                Name:
                                                Title:
                                                Date:

<PAGE>

                                                                     EXHIBIT F

                 NOTICE FROM HOLDER OF SEPARATED SENIOR NOTES TO
                     COLLATERAL AGENT REGARDING REMARKETING

Wells Fargo Bank Minnesota, National Association, as Collateral Agent
Sixth and Marquette
MAC N9303-120
Minneapolis, Minnesota  55479
Attention:  Jane Schweiger
Fax  (612) 667-9825

                  Re: SENIOR NOTES OF SIERRA PACIFIC RESOURCES

         Reference is made to the Pledge Agreement, dated as of November 16,
2001 (the "Pledge Agreement"), among Sierra Pacific Resources (the "Company"),
you, as Collateral Agent, and as Securities Intermediary, and The Bank of New
York, as Purchase Contract Agent and as attorney-in-fact for the holders of PIES
from time to time. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.

         The undersigned hereby notifies you in accordance with Section 5.7 of
the Pledge Agreement, that the undersigned elects to have $_________ principal
amount of Senior Notes for delivery to the Remarketing Agent on the Business Day
immediately preceding the Initial Remarketing Date for such Senior Notes to be
included in any Remarketing. The undersigned will, upon request of the
Remarketing Agent, promptly execute and deliver any additional documents deemed
by the Remarketing Agent or by the Company to be necessary or desirable to
complete the sale, assignment and transfer of the Senior Notes which are the
subject of this notice.

         The undersigned hereby instructs the you, upon receipt of the Proceeds
of such Remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated below under "Payment
Instructions." The undersigned hereby instructs you, in the event of a
unsuccessful Remarketing, upon receipt of the Senior Notes tendered herewith
from the Remarketing Agent, to deliver the Senior Notes to the person(s) and at
the address(es) indicated below under "Delivery Instructions." The undersigned
acknowledges and agrees that the Collateral Agent and the Remarketing Agent may
withhold from the Proceeds such amounts as they may determine to be appropriate
in respect of taxes which may be applicable.

         With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of the Pledge Agreement.

Date:

                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:
                                           Signature Guarantee:

<PAGE>

Please print name and address of Holder:

--------------------------------------------------------
          Name

--------------------------------------------------------
Social Security or Taxpayer Identification Number

--------------------------------------------------------
          Address

                              HOLDER'S INSTRUCTIONS

<TABLE>
<CAPTION>
------------------------------------------------------- --- -------------------------------------------------------
A.       PAYMENT INSTRUCTIONS                               B.       DELIVERY INSTRUCTIONS
-------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>
Proceeds of the remarketing should be paid by check         In the event of a failed remarketing, Senior
in the name of the person(s) set forth below and            Notes which are in physical form should be
mailed to the address set forth below                       delivered to the person(s) set forth below and
                                                            mailed to the address set forth below.

                    Name(s)                                                      Name(s)
        ------------------------------------                     -------------------------------------
               (Please Print)                                                  (Please Print)

                  Address                                                          Address

        ------------------------------------                     -------------------------------------
              (Please Print)                                                   (Please Print)

        ------------------------------------                     -------------------------------------

        ------------------------------------                     -------------------------------------
               (Zip Code)                                                       (Zip Code)

        ------------------------------------                     -------------------------------------
   (Tax Identification or Social Security Number)           (Tax Identification or Social Security Number)

                                                            In the event of a Failed Remarketing, Senior
    If a DTC Participant, add wire transfer                 Notes which are in book-entry form should be
    instructions and DTC Account No.                        credited to the account at The Depositary Trust
                                                            Company set forth below.

        ------------------------------------                     -------------------------------------
             Wire transfer instructions                                     DTC Account Number

        ------------------------------------
                 DTC Account Number                                   Name of Account Party: ______________
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                                                      EXHIBIT G

                       NOTICE FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT

Wells Fargo Bank Minnesota, National Association, as Collateral Agent
Sixth and Marquette
MAC N9303-120
Minneapolis, Minnesota  55479
Attention: Jane Schweiger
Fax (612) 667-9825

                  Re: SENIOR NOTES OF SIERRA PACIFIC RESOURCES

                  Reference is made to the Pledge Agreement, dated as of
November 16, 2001 (the "Pledge Agreement"), among Sierra Pacific Resources (the
"Company"), you, as Collateral Agent and Securities Intermediary, and the
undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders
of PIES from time to time. Capitalized terms used herein but not defined shall
have the meanings attributable to them in the Pledge Agreement.

                  The undersigned hereby notifies you, in accordance with
paragraph 19(i)(B) of the Indenture Officers' Certificate and Section 5.8 of the
Pledge Agreement, that the undersigned has received notice from the Holder named
below (the "Holder") that the Holder has elected not to participate in the
Remarketing through compliance with the procedures for creating Treasury PIES
set forth in Section 3.13 of the Purchase Contract Agreement and Section 5.2 of
the Pledge Agreement.

                  Accordingly, the undersigned hereby notifies you in accordance
with Section 3.13 of the Purchase Contract Agreement and Section 5.2 of the
Pledge Agreement that the Holder has elected to substitute $______________ Value
of Treasury Securities in exchange for an equal Value of Pledged Senior Notes
and has delivered to the undersigned a notice stating that the Holder has
Transferred such Treasury Securities to the Securities Intermediary, for credit
to the Collateral Account.

                  The undersigned hereby requests that you as the Collateral
Agent, upon confirmation from the Securities Intermediary that such Treasury
Securities have been credited to the Collateral Account, release to us for
delivery to such Holder _________ principal amount of the Pledged Senior Note in
accordance with Section 5.2 of the Pledge Agreement.

                                 THE BANK OF NEW YORK,
                                 as Purchase Contract Agent

                                 By:
                                    -------------------------------------------
                                    Name:
                                    Title:
                                    Date:

<PAGE>

                                                                     EXHIBIT H

                      AGENCY AND CUSTODY ACCOUNT DIRECTION
                                FOR CASH BALANCES

Direction to use Wells Fargo Funds for Cash Balances for the following
account(s):

         Account Names:      WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                             AS COLLATERAL AGENT, SECURITIES ACCOUNT (SIERRA
                             PACIFIC RESOURCES)

         Account Number(s):  11874500

You are hereby directed to invest, as indicated below or as I shall direct
further from time to time, all cash in the Account in the following money market
portfolio of Wells Fargo Funds (the "Fund") (Check One):

/ / Wells Fargo Government Money Market Service Class Fund
/ / Wells Fargo 100% Treasury Money Market Fund Service Class Fund
/ / Wells Fargo Treasury Plus Institutional Money Market Fund Service Class Fund
/ / Wells Fargo National Tax-Free Institutional Money Market Service Class Fund

I acknowledge that I have received, at my request, and reviewed the Fund's
prospectus and have determined that the Fund is an appropriate investment for
the Account.

I understand from reading the Fund's prospectus that Wells Fargo Bank Minnesota,
National Association, ("Wells Fargo Bank") serves as investment advisor,
custodian and transfer agent for the Fund; I also understand that Wells Fargo
Bank will be paid, and its bank affiliates may be paid, fees for services to the
Fund and that those fees may include Processing Organization fees as described
in the Fund's prospectus.

I understand that you will not exclude amounts invested in the Fund from Account
assets subject to fees under the Account agreement between us.

I understand that investments in the Fund are not obligations of, or endorsed or
guaranteed by, Wells Fargo Bank or its affiliates and are not insured by the
Federal Deposit Insurance Corporation.

I acknowledge that I have full power to direct investments of the Account.

I understand that I may change this direction at any time and that it shall
continue in effect until revoked or modified by me by written notice to you.

                                           ------------------------------------
                                           Signature

                                           ------------------------------------
                                           Date<Page>

                                                                   EXHIBIT 4.7

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

                              REMARKETING AGREEMENT

                                     BETWEEN

                            SIERRA PACIFIC RESOURCES

                                       AND

                   LEHMAN BROTHERS INC., AS REMARKETING AGENT

                                     ------

                          DATED AS OF NOVEMBER 16, 2001

==============================================================================
<Page>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               Page
                                                                                                               ----

<S>               <C>                                                                                            <C>
Section 1.        Definitions.....................................................................................1

Section 2.        Appointment and Obligations of the Remarketing Agent............................................5

Section 3.        Representations, Warranties and Agreements of the Company.......................................9

Section 4.        Reimbursement of Expenses......................................................................17

Section 5.        Further Agreements of the Company..............................................................17

Section 6.        Conditions to the Remarketing Agent's Obligations..............................................19

Section 7.        Indemnification and Contribution...............................................................28

Section 8.        Resignation and Removal of the Remarketing Agent...............................................31

Section 9.        Dealing in the Remarketing Senior Notes........................................................32

Section 10.       Remarketing Agent's Performance; Duty of Care..................................................32

Section 11.       Merger Consolidation, Sale or Conveyance.......................................................33

Section 12.       Termination....................................................................................34

Section 13.       Notices........................................................................................34

Section 14.       Persons Entitled to Benefit of Agreement.......................................................35

Section 15.       Survival.......................................................................................35

Section 16.       Governing Law..................................................................................35

Section 17.       Counterparts...................................................................................35

Section 18.       Headings.......................................................................................35

Section 19.       Severability...................................................................................35
</Table>

                                      -i-
<Page>

                            SIERRA PACIFIC RESOURCES

                           7.93% SENIOR NOTES DUE 2007

                              REMARKETING AGREEMENT

                                                               November 16, 2001

LEHMAN BROTHERS INC.
101 Hudson Street
Jersey City, New Jersey  07302

Ladies and Gentlemen:

                  Lehman Brothers Inc. is undertaking to remarket the 7.93%
Senior Notes due 2007 (the "Senior Notes") of Sierra Pacific Resources, a Nevada
corporation (the "Company"), pursuant to the Indenture, dated as of May 1, 2000
(the "Original Indenture"), and the Officers' Certificate, dated as of November
16, 2001, establishing the terms and the other provisions of the Senior Notes
(the "Indenture Officers' Certificate" and, together with the Original
Indenture, the "Indenture"), in each case, between the Company and The Bank of
New York, as Trustee (the "Trustee").

Section 1.        DEFINITIONS.

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

                  (a) the terms defined in this Section have the meanings
assigned to them in this Section and include the plural as well as the singular;

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

                  (c) capitalized terms used and not defined in this Agreement
shall have the meanings set forth in the Purchase Contract Agreement, dated as
of November 16, 2001 (the "Purchase Contract Agreement"), between the Company
and The Bank of New York, as Purchase Contract Agent (the "Purchase Contract
Agent"), or in the Indenture, as each of the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof; and

                  (d) as used in this Agreement, the following terms have the
following meanings:

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

                  "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:
<Page>

                                                                               2

                  Prevailing Rating                           Spread
                  -----------------                           ------
                  AA/Aa2....................................  3.00%
                  A/A2......................................  4.00%
                  BBB/Baa2..................................  5.00%
                  Below BBB/Baa2............................  7.00%

                  "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 Agent or, at the
         discretion of the Remarketing Agent after consultation with the
         Company, a nationally recognized quotation system that would be an
         effective medium of publicizing the event to be publicized.

                  "Blue Sky Application" has the meaning set forth in Section
         7(a).

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

                  "Commencement Date" has the meaning set forth in Section 3.

                  "Commission" has the meaning set forth in Section 3(b).

                  "Depositary Participant" has the meaning set forth in Section
         2(d)(i).

                  "Effective Date" has the meaning set forth in Section 3(b).

                  "Effective Time" has the meaning set forth in Section 3(b).

                  "Exchange Act" has the meaning set forth in Section 3(b).

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

                  "Final Remarketing" has the meaning set forth in Section 2(c).

                  "Final Remarketing Date" has the meaning set forth in Section
         2(c).

                  "Initial Remarketing" has the meaning set forth in Section
         2(b).

                  "Initial Remarketing Date" has the meaning set forth in
         Section 2(b).

                  "Investment Company Act" has the meaning set forth in Section
         3(dd).

                  "Material Adverse Effect" has the meaning set forth in Section
         3(h).

                  "Pledge Agreement" means the Pledge Agreement, dated as of the
         date hereof, 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 Securities,
         as the same may be amended, modified or supplemented from time to time
         in accordance with the terms thereof.
<Page>

                                                                               3

                  "Pledged Senior Notes" 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.

                  "Preliminary Prospectus" has the meaning set forth in Section
         3(b).

                  "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 Agent;

                  (b) if not under clause (a) 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 Agent;

                  (c) if not under clauses (a) or (b) 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 Agent; or

                  (d) if not under clauses (a), (b) or (c) 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 Agent is unable to identify a
         substitute rating agency or rating agencies, the Prevailing Rating
         shall be Below BBB/Baa2.

                  "Principal Amount" means the principal amount of a Senior
         Note, or $50.

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

                  "Prospectus" has the meaning set forth in Section 3(b).

                  "Registration Statement" has the meaning set forth in Section
         3(b).

<Page>

                                                                               4

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

                  "Remarketing Agent" has the meaning set forth in Section 2(a).

                  "Remarketing Date" has the meaning set forth in Section 2(d).

                  "Remarketing Materials" has the meaning set forth in Section
         3(b).

                  "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 Officers' Certificate, the
         Purchase Contract Agreement, the Pledge Agreement and this Agreement.

                  "Remarketing Senior Notes" means collectively (1) the Pledged
         Senior Notes that comprise part of Corporate PIES, other than those
         Pledged Senior Notes of Holders that have elected not to participate in
         the Remarketing pursuant to Section 5.3(e) of the Purchase Contract
         Agreement, and (2) the Separated Senior Notes of holders that have
         elected to participate in the Remarketing pursuant to paragraph 19(i)
         of the Indenture Officers' Certificate and Section 5.7 of the Pledge
         Agreement, in each case, which are subject to the Remarketing, as
         identified to the Remarketing Agent by the Purchase Contract Agent
         (with respect to the Pledged Senior Notes to be remarketed) and the
         Collateral Agent (with respect to the Separated Senior Notes to be
         remarketed) by 11:00 a.m. (New York City time), on the Business Day
         preceding the Initial Remarketing Date and, if applicable, the Final
         Remarketing Date, the Remarketing Agent having been notified of the
         aggregate principal amount of such Remarketing Senior Notes by the
         Purchase Contract Agent, the Collateral Agent or the Trustee, pursuant
         to the Purchase Contract Agreement, Pledge Agreement or Indenture, as
         the case may be.

                  "Remarketing Settlement Date" has the meaning set forth in
         Section 2(d).

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

                  "Reset Rate" has the meaning set forth in the Indenture.

                  "Securities" has the meaning set forth in Section 3(j).

                  "Securities Act" has the meaning set forth in Section 3(b).

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

                  "Significant Subsidiary" has the meaning set forth in Section
         3(i).

                  "Subsequent Remarketing" has the meaning set forth in Section
         2(c).

                  "Subsequent Remarketing Date" has the meaning set forth in
         Section 2(c).

                  "Successful Remarketing" has the meaning set forth in Section
         2(d).
<Page>

                                                                               5

                  "Transaction" has the meaning set forth in Section 3(j).

                  "Transfer" has the meaning set forth in Section 1 of the
         Pledge 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 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 Agent as displayed in the Telerate system or, if the
         Telerate system is no longer available or, in the judgment of the
         Remarketing Agent (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 Agent (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 Agent 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 Agent (after
         consultation with the Company) (which may include the Remarketing Agent
         or an Affiliate thereof). However, if, in the judgment of the
         Remarketing Agent, 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 Agent and the Company will agree upon another
         Two-Year Benchmark Rate.

                  Section 2. APPOINTMENT AND OBLIGATIONS OF THE REMARKETING
                             AGENT.

                  (a) The Company hereby appoints Lehman Brothers Inc. as
exclusive remarketing agent (the "Remarketing Agent"), and, upon the terms and
subject to the conditions set forth in this Agreement, Lehman Brothers Inc.
hereby accepts such appointment. The Remarketing Agent agrees to (1) use its
commercially reasonable efforts to remarket the Remarketing Senior Notes
tendered to the Remarketing Agent, pursuant to the Indenture and the Purchase
Contract Agreement, in the Remarketing and, in connection therewith, to
determine the Reset Rate as set forth in this Agreement and the Indenture and
(2) carry out such other duties as are assigned to the Remarketing Agent herein,
in each case, in accordance with the Remarketing Procedures.

                  (b) On August 10, 2005 (the "Initial Remarketing Date"), the
Remarketing Agent shall use its commercially reasonable efforts to remarket (the
"Initial Remarketing"), at a price at least equal to the Remarketing Value, the
Remarketing Senior Notes tendered for purchase, pursuant to the Remarketing
Procedures upon notification of the aggregate principal amount of such
Remarketing Senior Notes by the Purchase Contract Agent and the Collateral Agent
pursuant to Section 5.3 of the Purchase Contract Agreement. If, as a result of
such efforts, the Remarketing Agent determines that it will be able to remarket
all of the Remarketing Senior Notes tendered or deemed tendered for purchase at
a price at least equal to the Remarketing Value prior to 4:00 p.m. (New York
City time) on the Initial Remarketing Date, the Remarketing Agent shall
determine the Reset Rate that will enable it to remarket all Remarketing Senior
Notes tendered or deemed
<Page>

                                                                               6

tendered for Remarketing at an interest rate on the Initial Remarketing Date
sufficient to allow the Remarketing to occur at a price equal to the
Remarketing Value.

                  (c) If, despite the commercially reasonable efforts described
in the preceding paragraph, the Remarketing Agent cannot remarket the
Remarketing Senior Notes on the Initial Remarketing Date, the Remarketing Agent
will continue to use its commercially reasonable efforts to remarket the
Remarketing Senior Notes (i) on one or more subsequent occasions from the
Initial Remarketing Date to, and including, the ninth Business Day preceding the
Purchase Contract Settlement Date and (ii) if necessary, on the third Business
Day preceding the Purchase Contract Settlement Date, and in connection therewith
to determine the Reset Rate at an interest rate on the Remarketing Date, if any,
sufficient to allow the Remarketing at a price equal to the Remarketing Value as
set forth herein and (each such subsequent Remarketing up to and including the
ninth Business Day preceding the Purchase Contract Settlement Date being
referred to as a "Subsequent Remarketing," and each such date to be referred to
as, a "Subsequent Remarketing Date"; and the Remarketing on the third Business
Day preceding the Purchase Contract Settlement Date, being referred to as the
"Final Remarketing," and such date to be referred to as, the "Final Remarketing
Date;"), in each case in accordance with the Remarketing Procedures, PROVIDED
that, the Final Remarketing, if at all, must occur no later than on the third
Business Day immediately preceding the Purchase Contract Settlement Date.

                  (d) If any Remarketing is successful (a "Successful
Remarketing" and, such date to be referred to as the "Remarketing Date"), then:

                       (i) By approximately 4:30 p.m. (New York City time) on
         such Remarketing Date, (A) the Remarketing Agent shall advise by
         telephone the Company, the Purchase Contract Agent, the Collateral
         Agent, the Securities Intermediary, the Depositary and the Trustee, of
         the Reset Rate determined in the Remarketing, (B) the Remarketing Agent
         shall advise each purchaser or DTC participant (the "Depositary
         Participant") thereof purchasing Senior Notes sold in the Remarketing
         of the Reset Rate and the number of Senior Notes such purchaser is to
         purchase and (C) the Remarketing Agent shall request each purchaser to
         give instructions to its Depositary Participant to pay the purchase
         price on the third Business Day after the Remarketing Date (the
         "Remarketing Settlement Date") in same day funds against delivery of
         the remarketed Remarketing Senior Notes purchased through the
         facilities of the Depositary.

                  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 Notes remarketed in the Remarketing shall be executed through
         the Depositary, and the accounts of the respective Depositary
         Participants shall be debited and credited, respectively, and such
         Remarketing Senior Notes delivered by book-entry, as necessary to
         effect purchases and sales of such Remarketing Senior Notes; PROVIDED
         that, the settlement procedures set forth herein, including provisions
         for payment by purchasers of the Remarketing 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 Remarketing Senior Notes at the time of the Remarketing, to
         facilitate the remarketing of the Remarketing Senior Notes in
         certificated form and the Remarketing Agent may modify such settlement
         procedures in order to facilitate the settlement process.
<Page>

                                                                               7

                       (ii) Upon receipt of the proceeds from a Successful
         Remarketing, the Remarketing Agent shall:

                           (A) deduct and retain for itself an amount equal to
                  .25% of the principal amount of the remarketed Remarketing
                  Senior Notes as a fee for the performance of its services as
                  Remarketing Agent hereunder;

                           (B) (I) if the Successful Remarketing occurs prior to
                  the third Business Day preceding the Purchase Contract
                  Settlement Date, use the remaining proceeds with respect to
                  the Pledged Senior Notes from such Successful Remarketing to
                  purchase the Treasury Portfolio, in open market transactions
                  and/or at Treasury auctions, in the amount and types of
                  Treasury securities described in clauses (1)(i) and (2)(i) of
                  the definition of Remarketing Value related to the Pledged
                  Senior Notes, deliver such Treasury Portfolio, along with
                  notification thereof, to the Collateral Agent on the
                  Remarketing Settlement Date or as soon thereafter as is
                  practicable, or (II) if such Successful Remarketing occurs on
                  the Final Remarketing Date, remit to the Collateral Agent the
                  portion of the remaining proceeds with respect to the Pledged
                  Senior Notes from such Successful Remarketing to be delivered
                  to the Purchase Contract Agent in settlement of the Purchase
                  Contracts on the Purchase Contract Settlement Date;

                           (C) if any Separated Senior Notes were included in
                  such successful Remarketing, remit to the Collateral Agent,
                  along with notification thereof, for payment to the holders of
                  such Separated Senior Notes sold in such Successful
                  Remarketing the remaining proceeds with respect to such
                  remarketed Separated Senior Notes from the Remarketing, less
                  the remarketing fee, equal to the amounts described in clauses
                  (1)(ii) and (2)(ii) of the definition of Remarketing Value;
                  and

                           (D) remit, along with notification thereof, any
                  remaining balance of such proceeds after the application of
                  such proceeds as set forth in clauses (A) through (C) above,
                  if any, to the Purchase Contract Agent for the benefit of the
                  Holders of the remarketed Pledged Senior Notes and to the
                  Collateral Agent for the for the holders of any remarketed
                  Separated Senior Notes, on a pro rata basis;

PROVIDED, HOWEVER, that if such Successful Remarketing is consummated after 4:30
p.m. (New York City time) on such Remarketing Date and, despite using its
commercially reasonable efforts, the Remarketing Agent cannot cause the
applications of the proceeds specified above to occur on such Remarketing Date,
then the Remarketing Agent may make such applications and remittances on the
next succeeding Business Day. The Remarketing Agent may, in its discretion,
communicate with holders of the Senior Notes, and prospective purchasers of
Remarketing Senior Notes, in connection with its remarketing efforts in order to
facilitate the remarketing and the intent and purpose of this Agreement despite
the fact that such communication may not be expressly required herein.

                  (e) If, by 4:00 p.m. (New York City time) on the ninth
Business Day preceding the Purchase Contract Settlement Date, the Remarketing
Agent, despite using its commercially reasonable efforts, has been and is unable
to remarket all of the Remarketing Senior Notes tendered for purchase at a price
equal to at least the Remarketing Value, the Remarketing Agent shall Transfer to
the Collateral Agent, along with notification thereof, by the sixth Business Day
preceding the Purchase Contract Settlement Date, the Pledged Senior Notes that
were to be
<Page>

                                                                               8

remarketed in the Initial Remarketing or Subsequent Remarketing, whereupon the
Collateral Agent shall, for the benefit of the Company, apply such Pledged
Senior Notes to secure the obligation of the related Holders of Corporate PIES
to purchase Common Stock under the related Purchase Contracts.

                  (f) If, (1) by 4:00 p.m. (New York City time), on the Final
Remarketing Date, the Remarketing Agent, despite using its commercially
reasonable efforts, has been and is unable to remarket all of the Remarketing
Senior Notes tendered for purchase at a price equal to at least the Remarketing
Value, or (2) the Remarketing Agent has determined that the Remarketing may not
be commenced or consummated as contemplated herein and by the Remarketing
Procedures under applicable law, a failed Remarketing (a "Failed Remarketing")
shall be deemed to have occurred. If a Failed Remarketing occurs, the
Remarketing Agent and the Company, as applicable, shall take the following
actions:

                       (i) The Remarketing Agent shall notify by telephone the
         Company, the Depositary, Purchase Contract Agent, the Collateral Agent
         and the Trustee, that a Failed Remarketing has occurred.

                       (ii) The Company shall cause a notice of the Failed
         Remarketing to be sent to the holders of all Senior Notes and to be
         published, in an Authorized Newspaper, in each case, no later than the
         Business Day preceding the Purchase Contract Settlement Date.

                       (iii) The Remarketing Agent shall determine the Reset
         Rate that will be equal to the Two Year Benchmark Treasury plus the
         Applicable Spread in accordance to paragraph 19(ii) of the Indenture
         Officers' Certificate.

                       (iv) The Remarketing Agent shall remit the Pledged Senior
         Notes that were to be remarketed to the Purchase Contract Agent and the
         Separated Senior Notes that were to be remarketed to the Collateral
         Agent.

                  (g) If all of the holders of Corporate PIES elect not to
participate in the Remarketing and no holders of Separated Senior Notes elect to
participate in the Remarketing and deliver such Separated Senior Notes and a
notice of such election to the Collateral Agent by the Election Date, in
accordance with the Indenture Officers' Certificate, then:

                       (i) the Remarketing Agent shall, in its sole discretion,
         determine the rate that, in its judgment, would have been established
         had a Remarketing been held on the Final Remarketing Date, and such
         rate shall be the Reset Rate;

                       (ii) the Remarketing Agent shall advise by telephone the
         Company, the Depositary and the Trustee of such Reset Rate; and

                       (iii) the Company shall cause a notice of such Reset Rate
         to be sent to the holders of all Senior Notes and to be published in an
         Authorized Newspaper, in each case, no later than the Business Day
         preceding the Purchase Contract Settlement Date.

                  (h) The Remarketing Agent shall notify the Company, by the
[tenth] Business Day prior to the Initial Remarketing Date, of the specific U.S.
Treasury security or securities (including the CUSIP number(s) and/or the
principal terms of such Treasury security for securities)
<Page>

                                                                               9

that must be delivered by holders of Corporate PIES in connection with such
holders' creation of Treasury PIES pursuant to the Purchase Contract Agreement.

Section 3.        REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.

                  The Company represents, warrants and agrees (i) on and as of
the date hereof, (ii) on and as of the date of any Remarketing Materials (each
as defined in Section 3(a) below) are first distributed in connection with the
Remarketing (the "Commencement Date"), (iii) on and as of the Remarketing Date
and (iv) on and as of the Purchase Contract Settlement Date that:

                  (a) Registration statements on Form S-3 (File No.'s 333-80149
         and 333-72160) and an amendment or amendments thereto with respect to
         the initial offering of the Senior Notes and other securities of the
         Company (together, the "Registration Statement") (i) have been prepared
         by the Company in conformity with the requirements of the Securities
         Act of 1933, as amended, and the rules and regulations of the
         Securities and Exchange Commission (the "Commission") thereunder
         (collectively, the "Securities Act"), (ii) have been filed with the
         Commission under the Securities Act and (iii) have become effective
         under the Securities Act; and the Indenture has been qualified under
         the Trust Indenture Act of 1939, as amended, and the rules and
         regulations of the Commission thereunder (collectively, the "Trust
         Indenture Act"). In addition, a registration statement on Form S-3 of
         the Company, if required to be filed in connection with the
         Remarketing, will also be prepared by the Company in conformity with
         the requirements of the Securities Act and filed with the Commission
         under the Securities Act and be effective on or before the Initial
         Remarketing Date and such registration statement shall be included in
         the definition of "Registration Statement" herein. Copies of such
         registration statements that have become effective, and the amendment
         or amendments to such registration statements, have been delivered by
         the Company to the Remarketing Agent, in the case of documents not
         electronically available through the Commission's EDGAR filing system
         and, in the case of documents that are so available, to the extent
         requested by the Remarketing Agent.

                  As used in this Agreement, "Effective Time" means the date and
         time as of which the last of such registration statements that have
         become effective or may be filed, or the most recent post-effective
         amendment thereto, if any, was declared effective by the Commission;
         "Effective Date" means the date of the Effective Time of such last
         registration statement; "Preliminary Prospectus" means each prospectus
         relating to the Remarketing Senior Notes included in such last
         registration statement, or amendment thereto, before it became
         effective under the Securities Act and any prospectus relating to the
         Remarketing Senior Notes filed by the Company pursuant to Rule 424(a)
         of the Securities Act; "Registration Statement" means such last
         registration statement, as amended at its Effective Time, including
         documents incorporated by reference therein at such time and, if
         applicable, all information contained in the final prospectus filed
         with the Commission pursuant to Rule 424(b) of the Securities Act,
         including any information deemed to be part of such Registration
         Statement as of the Effective Time pursuant to paragraph (b) of Rule
         430A of the Securities Act; and "Prospectus" means each final
         prospectus relating to the Remarketing Senior Notes, as first filed
         pursuant to Rule 424(b) of the Securities Act.

                  Reference made herein to any Preliminary Prospectus, the
         Prospectus or any other information furnished by the Company to the
         Remarketing Agent for distribution to investors in connection with the
         Remarketing (such other information, the "Remarketing
<Page>

                                                                              10

         Materials") shall be deemed to refer to and include any documents
         incorporated by reference therein pursuant to Item 12 of Form S-3 under
         the Securities Act as of the date of such Preliminary Prospectus or the
         Prospectus, as the case may be, or, in the case of Remarketing
         Materials, referred to as incorporated by reference therein, and any
         reference to any amendment or supplement to any Preliminary Prospectus,
         the Prospectus or the Remarketing Materials shall be deemed to refer to
         and include any document filed under the Securities Exchange Act of
         1934, as amended, and the rules and regulations of the Commission
         thereunder (collectively, the "Exchange Act"), after the date of such
         Preliminary Prospectus or the Prospectus incorporated by reference
         therein pursuant to Item 12 of Form S-3 or, if so incorporated, the
         Remarketing Materials, as the case may be; and any reference to any
         amendment to the Registration Statement shall be deemed to include any
         annual report of the Company filed with the Commission pursuant to
         Section 13(a) or 15(d) of the Exchange Act after the Effective Time
         that is incorporated by reference in the Registration Statement.

                  (b) The Commission has not issued an order preventing or
         suspending the use of the Registration Statement, any Preliminary
         Prospectus, the Prospectus or any Remarketing Materials.

                  (c) The Registration Statement conforms (and the Prospectus
         and any further amendments or supplements to the Registration Statement
         or the Prospectus, when they become effective or are filed with the
         Commission, as the case may be, will conform) in all material respects
         to the requirements of the Securities Act; and the Registration
         Statement and the Prospectus do not and will not, as of the Effective
         Date (as to the Registration Statement and any amendment thereto), as
         of the applicable filing date (as to the Prospectus and any amendment
         or supplement thereto) and (as to the Registration Statement and the
         Prospectus) contain and will contain any untrue statement of a material
         fact or omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading; PROVIDED that
         no representation and warranty is made as to the statement of
         eligibility and qualification on Form T-1 of the Trustee under the
         Trust Indenture Act, or as to information contained in or omitted from
         the Registration Statement or the Prospectus in reliance upon and in
         conformity with written information furnished to the Company by the
         Remarketing Agent specifically for inclusion therein; the Indenture
         conforms in all material respects to the requirements of the Trust
         Indenture Act.

                  (d) The conditions for use of Form S-3, as set forth in the
         General Instructions thereto, have been satisfied.

                  (e) The documents incorporated by reference in the
         Registration Statement or the Prospectus when they became effective or
         were filed with the Commission, as the case may be, conformed in all
         material respects to the requirements of the Securities Act or the
         Exchange Act, as applicable, and none of such documents contained any
         untrue statement of a material fact or omitted to state any material
         fact required to be stated therein or necessary to make the statements
         therein not misleading; and any further documents so filed and
         incorporated by reference in the Prospectus, when such documents are
         filed with the Commission, will conform in all material respects to the
         requirements of the Exchange Act and will not contain any untrue
         statement of a material fact or omit to state any material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances in which they were made, not
         misleading.
<Page>

                                                                              11

                  (f) Each of the Company and its Significant Subsidiaries (as
         defined below) has been duly organized and is validly existing as a
         corporation in good standing under the laws of the State of Nevada, is
         duly qualified to do business and is in good standing as a foreign
         business entity in each jurisdiction in which its ownership or lease of
         property or the conduct of its businesses requires such qualification,
         and has all corporate power and authority necessary to own, lease or
         hold its properties and to conduct the businesses in which it is
         engaged, except where the failure to so qualify or to be in good
         standing would not have a material adverse effect on the business,
         affairs, management, condition (financial or otherwise), stockholders'
         equity or results of operations of the Company and its subsidiaries
         considered as a whole (a "Material Adverse Effect"); and none of the
         subsidiaries of the Company other than Nevada Power Company and Sierra
         Pacific Power Company is a "significant subsidiary", as such term is
         defined in Rule 405 of the Securities Act (each, a "Significant
         Subsidiary").

                  (g) The Company has an authorized capitalization as set forth
         in the Company's consolidated statement of capitalization as of
         December 31, 2000 incorporated by reference in the Prospectus; all of
         the issued shares of capital stock of the Company have been duly and
         validly authorized and issued and are fully paid and non-assessable;
         all of the issued shares of capital stock or other ownership interests
         of each subsidiary of the Company have been duly and validly authorized
         and issued and are fully paid and non-assessable; and all shares of the
         issued and outstanding common stock of the Company's Significant
         Subsidiaries are owned by the Company; and all shares of capital stock
         or other ownership interests of each subsidiary of the Company which
         are owned, directly or indirectly, by the Company are so owned free and
         clear of all liens, encumbrances, equities, claims or adverse interests
         of any nature. There has been no change in the outstanding capital
         stock of the Company or any of its subsidiaries since September 30,
         2001, except with respect to changes in outstanding Common Stock
         resulting from transactions relating to employee benefit plans,
         non-employee director plans or the common stock investment plan
         existing on the date hereof.

                  (h) Except as described in the Prospectus, there are no legal
         or governmental proceedings pending to which the Company or any of its
         subsidiaries is a party or of which any property or assets of the
         Company or any of its subsidiaries is the subject which, if determined
         adversely to the Company or such subsidiary, would be reasonably likely
         to result in a Material Adverse Effect; and, to the best of the
         Company's knowledge, no such proceedings are threatened or contemplated
         by governmental authorities or threatened by others.

                  (i) Except circumstances which are not reasonably likely,
         individually or in the aggregate, to result in a Material Adverse
         Effect, neither the Company nor any of its subsidiaries (i) is in
         violation of its charter or by-laws, (ii) is in default, and no event
         has occurred which, with notice or lapse of time or both, would
         constitute such a default, in the due performance or observance of any
         term, covenant or condition contained in any indenture, mortgage, deed
         of trust, loan agreement or other agreement or instrument to which it
         is a party or by which it is bound or to which any of its properties or
         assets is subject or (iii) is in violation of any law, ordinance,
         governmental rule, regulation or court decree to which it or its
         property or assets may be subject or has failed to obtain any license,
<Page>
                                                                              12

         permit, certificate, franchise or other governmental authorization or
         permit relating to the ownership of its property or to the conduct of
         its business.

                  (j) Except as described in the Prospectus, there are no
         contracts, agreements or understandings between the Company and any
         person granting such person the right to require the Company to file a
         registration statement under the Securities Act with respect to any
         securities of the Company owned or to be owned by such person.

                  (k) Except as set forth in or contemplated by the Prospectus,
         (i) neither the Company nor any of its subsidiaries has sustained,
         since the date of the latest audited financial statements included in
         the Prospectus, any material loss or interference with its business
         from fire, explosion, flood or other calamity, whether or not covered
         by insurance, or from any labor dispute or court or governmental
         action, order or decree (a "Material Loss"); and, (ii) since such date,
         there has not been any change in the capital stock, short-term debt or
         long-term debt of the Company or any of its subsidiaries or any
         material adverse change, or any development reasonably likely to result
         in a material adverse change, in or affecting the business, general
         affairs, management, consolidated financial position, stockholders'
         equity, or results of operations of the Company and its subsidiaries
         considered as a whole.

                  (l) The financial statements (including the related notes and
         supporting schedules) incorporated by reference in the Prospectus (and
         any supplement thereto) present fairly the financial condition, the
         results of operations and the changes in financial position of the
         Company and its consolidated subsidiaries on the basis stated therein
         at the respective dates or for the respective periods to which they
         apply; such statements and related schedules and notes have been
         prepared in accordance with generally accepted accounting principles
         consistently applied, except as noted therein, throughout the periods
         involved; the supporting schedules, if any, incorporated by reference
         in the Prospectus present fairly in accordance with generally accepted
         accounting principles the information required to be stated therein;
         and the other financial and statistical information and data set forth
         or incorporated by reference in the Prospectus (and any supplement
         thereto) are, in all material respects, accurately presented and
         prepared on a basis consistent with such financial statements and the
         books and records of the Company.

                  (m) The pro forma financial statements of the Company and its
         consolidated subsidiaries and the related notes thereto in the
         Prospectus (and any supplement thereto), if any, have been prepared on
         a basis consistent with the historical financial statements of the
         Company and its consolidated subsidiaries, give effect to the
         assumptions used in the preparation thereof on a reasonable basis and
         in good faith and present fairly the transactions purported to be
         presented. Such pro forma financial statements have been prepared in
         accordance with the applicable requirements of Rule 11-02 of Regulation
         S-X promulgated by the Commission. The other pro forma financial and
         statistical information and data incorporated by reference in the
         Prospectus (and any supplement thereto) are, in all material respects,
         accurately presented and prepared on a basis consistent with the pro
         forma financial statements.

                  (n) Deloitte & Touche LLP (the "Accountants"), who have
         certified the financial statements of the Company and whose report is
         incorporated by reference in the Prospectus, are independent public
         accountants as required by the Securities Act; and the
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                                                                              13

         Accountants were independent accountants as required by the Securities
         Act during the periods covered by the financial statements on which
         they reported.

                  (o) The Company and its Significant Subsidiaries have good and
         marketable title in fee simple to all real property and good and
         marketable title to all personal property owned by them, in each case
         free and clear of all liens, encumbrances and defects, except such as
         are (i) described or referred to in the Prospectus or (ii) do not,
         individually or in the aggregate, affect the value of such property or
         interfere with the use made and proposed to be made of such property to
         such extent as might reasonably be expected to result in a Material
         Adverse Effect; and all assets held under lease by the Company and its
         Significant Subsidiaries are held by them under valid, subsisting and
         enforceable leases, with such exceptions as are not material to the
         Company and its subsidiaries considered as a whole, and such leases do
         not interfere with the use made and proposed to be made of such
         property and buildings by the Company and its Significant Subsidiaries
         to such extent as would be reasonably likely to result in a Material
         Adverse Effect.

                  (p) Each of the Company and its Significant Subsidiaries has
         such permits, licenses, consents, exemptions, franchises,
         authorizations and other approvals (each, an "Authorization") of, and
         has made all filings with and notices to, all governmental or
         regulatory authorities and self-regulatory organizations and all courts
         and other tribunals, including, without limitation, under any
         applicable environmental law, ordinance, rule, regulation, order,
         judgment, decree or permit, as are necessary to own, lease, license and
         operate its respective properties and to conduct its business, except
         where the failure to have any such Authorization or to make any such
         filing or notice would not have a Material Adverse Effect. Except for
         circumstances which are not reasonably likely to result in a Material
         Adverse Effect, (i) each such Authorization is valid and in full force
         and effect and each of the Company and its Significant Subsidiaries, as
         the case may be, is in compliance with all the terms and conditions
         thereof and with the rules and regulations of the authorities and
         governing bodies having jurisdiction with respect thereto; (ii) no
         event has occurred (including, without limitation, the receipt of any
         notice from any authority or governing body) which allows or, after
         notice or lapse of time or both, would allow, revocation, suspension or
         termination of any such Authorization or results or, after notice or
         lapse of time or both, would result in any other impairment of the
         rights of the holder of any such Authorization; and (iii) except as
         disclosed in the Prospectus, such Authorizations contain no
         restrictions that are burdensome to the Company or any of its
         Significant Subsidiaries.

                  (q) Since the date as of which information is given in the
         Prospectus and except as otherwise disclosed in the Prospectus, (i)
         neither the Company nor any of its Significant Subsidiaries has
         incurred any liability or obligation, direct or contingent, or entered
         into any transaction which liability, obligation or transaction is (A)
         not in the ordinary course of business and (B) material with respect to
         the Company and its subsidiaries considered as a whole, and (ii) the
         Company has not declared or paid any dividend on any of its capital
         stock except for dividends on the Common Stock in amounts per share
         that are consistent with past practice.

                  (r) The Company has all power and authority necessary to
         execute and deliver this Agreement and perform its obligations
         hereunder; this Agreement and the transactions contemplated hereby have
         been duly authorized by the Company; this Agreement has been
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                                                                              14

         duly executed and delivered by the Company, and this Agreement conforms
         in all material respects to the description thereof contained in the
         Prospectus.

                  (s) The Company has all power and authority necessary to
         execute and deliver the Purchase Contract Agreement and perform its
         obligations thereunder; the Purchase Contract Agreement and the
         transactions contemplated thereby have been duly authorized by the
         Company; the Purchase Contract Agreement has been duly executed and
         delivered by the Company and, assuming due authorization, execution and
         delivery by the Purchase Contract Agent, it constitutes a legally valid
         and binding agreement of the Company, enforceable against the Company
         in accordance with its terms, subject to the effects of bankruptcy,
         insolvency, fraudulent conveyance, reorganization, moratorium and other
         similar laws relating to or affecting creditors' rights generally,
         general equitable principles (whether considered in a proceeding in
         equity or at law) and an implied covenant of good faith and fair
         dealing; and the Purchase Contract Agreement conforms or will conform,
         as the case may be, in all material respects to the description thereof
         contained in the Prospectus.

                  (t) The Corporate PIES have been duly executed and delivered
         by the Company (assuming due execution by the Purchase Contract Agent
         as attorney-in-fact for the holders thereof and due authentication by
         the Purchase Contract Agent), have been duly and validly issued and
         outstanding and constitute legally valid and binding obligations of the
         Company, entitled to the benefits of the Purchase Contract Agreement
         and enforceable against the Company in accordance with their terms,
         subject to the effects of bankruptcy, insolvency, fraudulent
         conveyance, reorganization, moratorium and other similar laws relating
         to or affecting creditors rights generally, general equitable
         principles (whether considered in a proceeding in equity or at law) and
         an implied covenant of good faith and fair dealing; and the Corporate
         PIES conform or will conform, as the case may be, in all material
         respects to the description thereof contained in the Prospectus.

                  (u) The Treasury PIES have been executed and delivered by the
         Company (assuming due execution by the Purchase Contract Agent as
         attorney-in-fact for the holders thereof and due authentication by the
         Purchase Contract Agent) and, upon substitution of the requisite number
         of Treasury Securities for the applicable Senior Notes as set forth in
         the Prospectus, will be duly and validly issued and outstanding and
         will constitute legally valid and binding obligations of the Company,
         entitled to the benefits of the Purchase Contract Agreement and
         enforceable against the Company in accordance with their terms, subject
         to the effects of bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting creditors rights generally, general equitable principles
         (whether considered in a proceeding in equity or at law) and an implied
         covenant of good faith and fair dealing; and the Treasury PIES will
         conform, when issued, to the description thereof contained in the
         Prospectus.

                  (v) The Company had all necessary corporate power and
         authority to execute and deliver the Indenture and had and continues to
         have all necessary corporate power and authority to perform its
         obligations thereunder; the Indenture and the transactions contemplated
         thereby have been duly authorized by the Company; the Indenture has
         been duly executed and delivered by the Company and, assuming due
         authorization, execution and delivery by the Trustee, it constitutes a
         legally valid and binding agreement of the Company, enforceable against
         the Company in accordance with its terms, subject to the
<Page>

                                                                              15

         effects of bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting creditors' rights generally, general equitable principles
         (whether considered in a proceeding in equity or at law) and an implied
         covenant of good faith and fair dealing; and the Indenture conforms or
         will conform, as the case may be, in all material respects to the
         description thereof contained in the Prospectus.

                  (w) The Senior Notes have been duly executed, authenticated,
         issued and delivered as contemplated by the Indenture against payment
         of the agreed consideration therefor, have been duly and validly issued
         and outstanding and constitute legally valid and binding obligations of
         the Company, entitled to the benefits of the Indenture and enforceable
         against the Company in accordance with their terms, subject to the
         effects of bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting creditors' rights generally, general equitable principles
         (whether considered in a proceeding in equity or at law) and an implied
         covenant of good faith and fair dealing; and the Senior Notes conform
         or will conform, as the case may be, in all material respects to the
         description thereof contained in the Prospectus.

                  (x) The Company has all necessary power and authority to
         execute and deliver the Pledge Agreement and perform its obligations
         thereunder; the Pledge Agreement and the transactions contemplated
         thereby have been duly authorized by the Company; the Pledge Agreement
         has been duly executed and delivered by the Company and, assuming due
         authorization, execution and delivery by the Purchase Contract Agent,
         the Securities Intermediary and the Collateral Agent, it constitutes a
         legally valid and binding agreement of the Company, enforceable against
         the Company in accordance with its terms, subject to the effects of
         bankruptcy, insolvency, fraudulent conveyance, reorganization,
         moratorium and other similar laws relating to or affecting creditors'
         rights generally, general equitable principles (whether considered in a
         proceeding in equity or at law) and an implied covenant of good faith
         and fair dealing; and the Pledge Agreement conforms or will conform, as
         the case may be, in all material respects to the description thereof
         contained in the Prospectus.

                  (y) The provisions of the Pledge Agreement are effective to
         create, in favor of the Collateral Agent for the benefit of the
         Company, a valid security interest under the New York UCC in the
         Pledged Senior Notes, the Pledged Treasury Portfolio Interest and the
         Pledged Treasury Securities, as the case may be, from time to time
         credited to the Collateral Account in accordance with the Pledge
         Agreement. For purposes of this opinion, capitalized terms used in this
         paragraph, which are not defined in this Agreement, shall have the
         meanings ascribed to such terms in the Pledge Agreement.

                  (z) The Company has all necessary power and authority to
         execute and deliver the Remarketing Agreement and perform its
         obligations thereunder; the Remarketing Agreement and the transactions
         contemplated thereby have been duly authorized by the Company and,
         assuming due authorization, execution and delivery by the Remarketing
         Agent, it constitutes a legally valid and binding agreement of the
         Company, enforceable against the Company in accordance with its terms,
         subject to the effect of bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting creditors' rights generally, general equitable principles
         (whether considered in a proceeding in equity or at law) and an implied
         covenant of good faith and fair dealing, and except with respect to the
         rights of indemnification and contribution hereunder, where enforcement
         hereof may be limited by federal or state securities laws or

<Page>

                                                                              16

         the policies underlying such laws; the Remarketing Agreement has been
         duly executed and delivered by the Company; and the Remarketing
         Agreement conforms or will conform, as the case may be, in all material
         respects to the description thereof contained in the Prospectus.

                  (aa) The unissued shares of common stock to be issued and sold
         by the Company upon settlement of the Purchase Contracts have been duly
         authorized and reserved for issuance and, when issued and delivered in
         accordance with the provisions of the Purchase Contracts, will be duly
         and validly issued, fully paid and non-assessable and will conform in
         all material respects to the description thereof contained in the
         Prospectus.

                  (bb) Except as described in the Prospectus, there are no
         preemptive or other rights to subscribe for or to purchase, nor is
         there any restriction on the voting or transfer of, any of the
         Corporate PIES, the Treasury PIES, the Purchase Contracts, the Senior
         Notes or any shares of Common Stock (collectively, the "Securities")
         pursuant to the Company's articles of incorporation or by-laws or any
         agreement or instrument, except such preemptive or other rights and/or
         restrictions as relate to the transactions contemplated by the Purchase
         Contract Agreement, the Pledge Agreement and the Indenture.

                  (cc) The execution, delivery and performance of this
         Agreement, the Purchase Contract Agreement, the Indenture and the
         Pledge Agreement (collectively, the "Transaction Agreements") and the
         consummation by the Company of the transactions contemplated hereby and
         thereby, including without limitation the Remarketing of the
         Remarketing Senior Notes (collectively, the "Transactions"), did not
         and will not, as the case may be, (i) conflict with or result in a
         breach or violation of any of the terms or provisions of, or constitute
         a default under, any indenture, mortgage, deed of trust, loan agreement
         or other agreement or instrument to which the Company or any of its
         subsidiaries is a party or by which the Company or any of its
         subsidiaries is bound or to which any of the properties or assets of
         the Company or any of its subsidiaries is subject, which would be
         reasonably likely to result in a Material Adverse Effect, (ii) result
         in any violation of the provisions of the charter or by-laws of the
         Company or any of its subsidiaries, (iii) result in any violation of
         any statute or any order, rule or regulation of any court or
         governmental agency or body having jurisdiction over the Company or any
         of its subsidiaries or any of their respective properties or assets,
         which would be reasonably likely to result in a Material Adverse Effect
         or (iv) require any material consent, approval, authorization or order
         of, or filing or registration with, any such court or governmental
         agency or body for the consummation of the Transactions, except for (A)
         the registration of the Remarketing Senior Notes in connection with the
         Remarketing under the Securities Act, if applicable, (B) the
         qualification of the Indenture under the Trust Indenture Act and (C)
         such consents, approvals, authorizations, registrations or
         qualifications as may be required under the Exchange Act and applicable
         state securities laws in connection with the Remarketing of the Senior
         Notes, if applicable.

                  (dd) Neither the Company nor any subsidiary is an "investment
         company" as defined, and subject to regulation, under the Investment
         Company Act of 1940, as amended, and the rules and regulations of the
         Commission thereunder (the "Investment Company Act").
<Page>

                                                                              17

                  (ee) The Company is a "holding company" under the Public
         Utility Holding Company Act of 1935, as amended (the "Holding Company
         Act"), but, pursuant to Section 3(a)(1) of the Holding Company Act, is
         exempt from all provisions of the Holding Company Act except Section
         9(a)(2) thereof.

                  Any certificate signed by any officer of the Company or any of
its subsidiaries and delivered to the Remarketing Agent or to counsel for the
Remarketing Agent in connection with the Remarketing shall be deemed a
representation and warranty by the Company to the Remarketing Agent as to the
matters covered thereby on the date of such certificate.

Section 4.        REIMBURSEMENT OF EXPENSES.

                  The Company agrees to pay the following expenses, whether or
not the Remarketing is consummated or this Agreement is terminated, promptly
upon receipt of a request therefor:

                        (1) the costs incident to the preparation and printing
                  of the Registration Statement, Prospectus and any Remarketing
                  Materials and any amendments or supplements thereto, including
                  all related registration and filing fees;

                        (2) the costs of distributing the Registration
                  Statement, Prospectus and any Remarketing Materials and any
                  amendments or supplements thereto;

                        (3) the fees and expenses of qualifying the Remarketing
                  Senior Notes under the securities laws of the several
                  jurisdictions as provided in Section 5(f) and of preparing,
                  printing and distributing a U.S. and, if necessary, a
                  Canadian, Blue Sky Memorandum (including related fees and
                  expenses of counsel to the Remarketing Agent);

                        (4) all other costs and expenses incident to the
                  performance of the obligations of the Company hereunder,
                  including the fees and expenses of the Company's counsel; and

                        (5) the fees and expenses of outside counsel to the
                  Remarketing Agent in connection with its duties hereunder.

Section 5.         FURTHER AGREEMENTS OF THE COMPANY.

                  The Company covenants and agrees as follows:

                  (a) (1) To use its reasonable best efforts to file with and
         cause to be declared effective by the Commission under the Securities
         Act, prior to fifth Business Day preceding the Initial Remarketing
         Date, an additional registration statement relating to the Remarketing
         Senior Notes in connection with the Remarketing, in a form approved by
         the Remarketing Agent, if in the opinion of counsel to the Remarketing
         Agent such additional registration statement is required in connection
         with the Remarketing under applicable law;

                           (2) to advise the Remarketing Agent, promptly after
                  it receives notice thereof, of the time when any amendment to
                  the Registration Statement has been filed or becomes effective
                  or any supplement to the Prospectus or any amended Prospectus
                  has been filed, in each such case excluding any documents
                  filed under
<Page>

                                                                              18

                  the Exchange Act and which are incorporated by reference
                  therein, and to furnish the Remarketing Agent with copies
                  thereof; PROVIDED, HOWEVER, that the Company shall not be
                  required to provide the Remarketing Agent with any such
                  reports or similar forms that have been filed with the
                  Commission by electronic transmission pursuant to EDGAR;

                           (3) to prepare the Prospectus for the Remarketing and
                  to timely file it with the Commission under the Securities Act
                  and to file promptly all reports and any definitive proxy or
                  information statements required to be filed by the Company
                  with the Commission pursuant to Section 13(a), 13(c), 14 or
                  15(d) of the Exchange Act subsequent to the date of the
                  Prospectus and for so long as the delivery of a prospectus is
                  required in connection with the offering or sale of the
                  Remarketing Senior Notes; and

                           (4) to advise the Remarketing Agent, promptly after
                  it receives notice thereof, of the issuance by the Commission
                  of any stop order or of any order preventing or suspending the
                  use of the Prospectus, of the suspension of the qualification
                  of any of the Remarketing Senior Notes for offering or sale in
                  any jurisdiction, of the initiation or threatening of any
                  proceeding for any such purpose, or of any request by the
                  Commission for the amending or supplementing of the
                  Registration Statement or the Prospectus or for additional
                  information; and, in the event of the issuance of any stop
                  order or of any order preventing or suspending the use of any
                  Prospectus or suspending any such qualification, to use
                  promptly its best efforts to obtain its withdrawal.

                  (b) To deliver to the Remarketing Agent in New York City such
         number of the following documents as the Remarketing Agent shall
         reasonably request at the times specified below: (i) conformed copies
         of the Registration Statement as originally filed with the Commission
         and each amendment thereto (in each case excluding exhibits other than
         this Agreement and the Indenture) promptly after such filing, (ii) the
         Prospectus and any amended or supplemented Prospectus promptly after
         the preparation and/or printing thereof, as applicable, but in no event
         later than the third Business Day prior to the Initial Remarketing
         Date, (iii) any document incorporated by reference in the Prospectus
         (excluding exhibits thereto) promptly after their filing with the
         Commission and (iv) any Remarketing Materials promptly after their
         preparation, if at all; and, if the delivery of a prospectus is
         required at any time in connection with the Remarketing and if, at such
         time, any event shall have occurred as a result of which the Prospectus
         as then amended or supplemented would include any untrue statement of a
         material fact or omit to state any material fact necessary in order to
         make the statements therein, in the light of the circumstances under
         which they were made when such Prospectus is delivered, not misleading,
         or if for any other reason in the opinion of counsel to the Company or
         the Remarketing Agent it shall be necessary during such same period to
         amend or supplement the Registration Statement or Prospectus or to file
         under the Exchange Act any document incorporated by reference in the
         Prospectus in order to comply with the Securities Act or the Exchange
         Act, to notify the Remarketing Agent and to file such document and to
         prepare and furnish without charge to the Remarketing Agent and to any
         dealer in Senior Notes as many copies as the Remarketing Agent may from
         time to time request of an
<Page>

                                                                              19

         amended or supplemented Prospectus which will correct such statement or
         omission or effect such compliance, promptly after their preparation
         and/or filing, if at all.

                  (c) To file promptly with the Commission any amendment to the
         Registration Statement, the Prospectus or any supplement to the
         Prospectus that may, in the judgment of the Company or the Remarketing
         Agent, be required by the Securities Act or requested by the
         Commission.

                  (d) Prior to filing with the Commission (i) any amendment to
         the Registration Statement or supplement to the Prospectus (excluding
         documents filed under the Exchange Act incorporated by reference) or
         (ii) any Prospectus pursuant to Rule 424 of the Securities Act, to
         furnish a copy thereof to the Remarketing Agent and counsel to the
         Remarketing Agent, and not to file any such amendment or supplement
         which shall be reasonably disapproved by the Remarketing Agent promptly
         after reasonable notice.

                  (e) As soon as practicable after the Effective Date, to make
         generally available to the Company's security holders and to deliver to
         the Remarketing Agent an earnings statement of the Company and its
         subsidiaries (which need not be audited) complying with Section 11(a)
         of the Securities Act (including, at the option of the Company, Rule
         158 of the Securities Act).

                  (f) Promptly from time to time to take such action as the
         Remarketing Agent may reasonably request to qualify any of the
         Remarketing Senior Notes for offer and sale under the securities laws
         of such jurisdictions as the Remarketing Agent may request and to
         comply with such laws so as to permit the continuance of sales and
         dealings therein in such jurisdictions for as long as may be necessary
         to complete the Remarketing; PROVIDED that, in connection therewith,
         the Company shall not be required to qualify as a foreign corporation
         or to file a general consent to service of process in any jurisdiction
         in which it is not so qualified or to submit to any requirements which
         it deems unduly burdensome.

                  (g) For a period of two years following the Effective Date or
         so long as any of the Senior Notes shall remain outstanding, whichever
         is shorter, to furnish to the Remarketing Agent copies of such
         materials furnished by the Company to the holders of any class of its
         capital stock and to furnish to the Remarketing Agent a copy of each
         annual or other report it shall be required to file with the Commission
         and such other information concerning the Company and its subsidiaries
         as the Remarketing Agent may reasonably request; PROVIDED, HOWEVER,
         that the Company shall not be required to provide the Remarketing Agent
         with any such reports or similar forms that have been filed with the
         Commission by electronic transmission pursuant to EDGAR.

                  (h) To request, not later than 15 calendar days nor more than
         30 calendar days prior to the Initial Remarketing Date, that the
         Depositary notify its Participants holding Corporate PIES or Separated
         Senior Notes of the impending Initial Remarketing.

                  Section 6. CONDITIONS TO THE REMARKETING AGENT'S OBLIGATIONS.

                  The obligations of the Remarketing Agent hereunder are subject
to (i) the accuracy, on and as of the date when made, of the representations and
warranties of the Company contained herein or in any certificates of any officer
of the Company delivered pursuant hereto, (ii) the
<Page>

                                                                              20

performance by the Company of the covenants set forth in Section 5 hereof and
its other obligations hereunder and (iii) each of the following additional
conditions:

                  (a) The Prospectus shall have been filed with the Commission
         pursuant to Section 5(a) hereof; no stop order suspending the
         effectiveness of the Registration Statement or any part thereof or
         suspending the qualification of the Indenture, shall have been issued
         and no proceeding for that purpose shall have been initiated or
         threatened by the Commission; and any request of the Commission for
         inclusion of additional information in the Registration Statement or
         the Prospectus or otherwise shall have been complied with.

                  (b) The Remarketing Agent shall not have discovered and
         disclosed to the Company on or prior to the Remarketing Date that the
         Registration Statement, the Prospectus or the Remarketing Materials or
         any amendment or supplement thereto contains any untrue statement of a
         fact which, in the opinion of counsel to the Remarketing Agent, is
         material or omits to state any fact which, in the opinion of such
         counsel, is material and is required to be stated therein or is
         necessary to make the statements therein not misleading and the Company
         shall not have filed an amendment or supplement to the Registration
         Statement or otherwise acted to correct the matter so disclosed.

                  (c) All corporate proceedings and other legal matters incident
         to the authorization, form and validity of this Agreement, the
         Indenture, the Remarketing Senior Notes, the Prospectus, the
         Registration Statement, the Remarketing Materials and all other legal
         matters relating to this Agreement and the transactions contemplated
         hereby, including satisfaction of relevant conditions of applicable
         law, shall be reasonably satisfactory in all material respects to
         counsel to the Remarketing Agent, and the Company shall have furnished
         to such counsel all documents and information that they may reasonably
         request to enable them to pass upon such matters.

                  (d) The Company, the Purchase Contract Agent, the Collateral
         Agent and the Trustee shall have performed their respective obligations
         in connection with the Initial Remarketing, any Subsequent Remarketing
         or, if applicable, Final Remarketing, in each case pursuant to the
         Stock Purchase Agreement, the Pledge Agreement, the Indenture and this
         Agreement, including, without limitation, by providing the Remarketing
         Agent with timely and accurate notice of the aggregate principal amount
         of the Remarketing Senior Notes to be remarketed pursuant to the
         Purchase Contract Agreement, the Pledge Agreement and the Indenture.

                  (e) Woodburn and Wedge, Nevada counsel to the Company, shall
         have furnished to the Remarketing Agent its written opinion, addressed
         to the Remarketing Agent and dated the Remarketing Settlement Date, in
         form and substance satisfactory to the Remarketing Agent, to the effect
         that:

                           (i) The Company and each of its Significant
                  Subsidiaries have been duly incorporated and are validly
                  existing as corporations in good standing under the laws of
                  the State of Nevada, except where the failure to be in good
                  standing would not have a Material Adverse Effect.

                           (ii) The Company has all power and authority
                  necessary to execute and deliver each of the Transaction
                  Agreements, to perform its obligations thereunder
<Page>

                                                                              21

                  and to issue the Securities; and the Company has duly
                  authorized, executed and delivered each of the Transaction
                  Agreements.

                           (iii) The execution, delivery and performance of the
                  Transaction Agreements and the consummation by the Company of
                  the Transactions, did not and will not, as the case may be,
                  (i) result in any violation of the provisions of the charter
                  or by-laws of the Company or any of its subsidiaries, (ii)
                  result in any violation of any Nevada statute or any order,
                  rule or regulation of any Nevada court or governmental agency
                  or body having jurisdiction over the Company or any of its
                  subsidiaries or any of their respective properties or assets,
                  which would be reasonably likely to result in a Material
                  Adverse Effect, or (iv) require any material consent,
                  approval, authorization or order of, or filing or registration
                  with, any such court or governmental agency or body for the
                  consummation of the Transactions, except for such consents,
                  approvals, authorizations, registrations or qualifications as
                  may be required under Nevada securities laws in connection
                  with the Remarketing of the Senior Notes, if applicable.

                           (iv) The Corporate PIES have been duly executed and
                  delivered by the Company (assuming due execution by the
                  Purchase Contract Agent as attorney-in-fact for the holders
                  thereof and due authentication by the Purchase Contract Agent)
                  and have duly and validly issued and outstanding.

                           (v) The Treasury PIES have been duly executed and
                  delivered by the Company (assuming due execution by the
                  Purchase Contract Agent as attorney-in-fact for the holders
                  thereof and due authentication by the Purchase Contract Agent)
                  and, upon substitution of the requisite number of Treasury
                  Securities for the applicable Senior Notes as set forth in the
                  Purchase Contract Agreement, and will be duly and validly
                  issued and outstanding.

                           (vi) The Senior Notes have been duly executed and
                  delivered and have been duly and validly issued and
                  outstanding.

                           (vii) The unissued shares of Common Stock to be
                  issued and sold by the Company upon settlement of the Purchase
                  Contracts have been duly authorized and reserved for issuance
                  and, when issued, sold and delivered, against payment, in
                  accordance with the provisions of the Purchase Contracts, will
                  be duly and validly issued, fully paid and non-assessable and
                  will conform to the description thereof contained in the
                  Prospectus.

                           The opinion of such counsel may be limited to the
         extent the matters set forth therein are governed by or relate to the
         law of the State of Nevada or instruments governed thereby, or relate
         to the State of Nevada or agencies thereof.

                  (f) Choate, Hall and Stewart, counsel to the Company, shall
         have furnished to the Remarketing Agent a written opinion, addressed to
         the Remarketing Agent and dated the Remarketing Settlement Date, in
         form and substance satisfactory to the Remarketing Agent, to the effect
         that:
<Page>

                                                                              22

                           (i) The Company and each of its Significant
                  Subsidiaries have been duly incorporated and are validly
                  existing as corporations in good standing under the laws of
                  the State of Nevada, are duly qualified to do business and are
                  in good standing as foreign corporations in each jurisdiction
                  in which their respective ownership or lease of property or
                  the conduct of their respective businesses requires such
                  qualification and have all corporate power and authority
                  necessary to own or hold their respective properties and
                  conduct the businesses in which they are engaged, except where
                  the failure to so qualify or to be in good standing would not
                  have a Material Adverse Effect.

                           (ii) The Company has all power and authority
                  necessary to execute and deliver each of the Transaction
                  Agreements, to perform its obligations thereunder and to issue
                  the Securities; and the Company has duly authorized, executed
                  and delivered each of the Transaction Agreements.

                           (iii) The execution, delivery and performance of the
                  Transaction Agreements and the consummation by the Company of
                  the Transactions, did not and will not, as the case may be,
                  (i) conflict with or result in a breach or violation of any of
                  the terms or provisions of, or constitute a default under, any
                  indenture, mortgage, deed of trust, loan agreement or other
                  agreement or instrument to which the Company or any of its
                  subsidiaries is a party or by which the Company or any of its
                  subsidiaries is bound or to which any of the properties or
                  assets of the Company or any of its subsidiaries is subject,
                  which would be reasonably likely to result in a Material
                  Adverse Effect, (ii) result in any violation of the provisions
                  of the charter or by-laws of the Company or any of its
                  subsidiaries, (iii) result in any violation of any statute or
                  any order, rule or regulation of any court or governmental
                  agency or body having jurisdiction over the Company or any of
                  its subsidiaries or any of their respective properties or
                  assets, which would be reasonably likely to result in a
                  Material Adverse Effect or (iv) require any material consent,
                  approval, authorization or order of, or filing or registration
                  with, any such court or governmental agency or body for the
                  consummation of the Transactions, except for such consents,
                  approvals, authorizations, registrations or qualifications
                  which have been obtained and are in full force and effect.

                           (iv) Assuming due authorization, execution and
                  delivery of the Purchase Contract Agreement by the Purchase
                  Contract Agent, the Purchase Contract Agreement constitutes a
                  legally valid and binding agreement of the Company,
                  enforceable against the Company in accordance with its terms,
                  subject to the effects of bankruptcy, insolvency, fraudulent
                  conveyance, reorganization, moratorium and other similar laws
                  relating to or affecting creditors' rights generally, general
                  equitable principles (whether considered in a proceeding in
                  equity or at law) and an implied covenant of good faith and
                  fair dealing; the Purchase Contract Agreement is not required
                  to be qualified as an indenture under the Trust Indenture Act;
                  and the Purchase Contract Agreement conforms or will conform,
                  as the case may be, in all material respects to the
                  description thereof contained in the Prospectus.
<Page>

                                                                              23

                           (v) The Corporate PIES have been duly executed and
                  delivered by the Company (assuming due execution by the
                  Purchase Contract Agent as attorney-in-fact for the holders
                  thereof and due authentication by the Purchase Contract
                  Agent), have duly and validly issued and outstanding, and
                  constitute valid and binding obligations of the Company,
                  entitled to the benefits of the Purchase Contract Agreement
                  and enforceable against the Company in accordance with their
                  terms, subject to the effects of bankruptcy, insolvency,
                  fraudulent conveyance, reorganization, moratorium and other
                  similar laws relating to or affecting creditors rights
                  generally, general equitable principles (whether considered in
                  a proceeding in equity or at law) and an implied covenant of
                  good faith and fair dealing; and the Corporate PIES conform or
                  will conform, as the case may be, in all material respects to
                  the description thereof contained in the Prospectus.

                           (vi) The Treasury PIES have been duly executed and
                  delivered by the Company (assuming due execution by the
                  Purchase Contract Agent as attorney-in-fact for the holders
                  thereof and due authentication by the Purchase Contract Agent)
                  and, upon substitution of the requisite number of Treasury
                  Securities for the applicable Senior Notes as set forth in the
                  Purchase Contract Agreement, will be duly and validly issued
                  and outstanding, and will constitute valid and binding
                  obligations of the Company, entitled to the benefits of the
                  Purchase Contract Agreement and enforceable against the
                  Company in accordance with their terms, subject to the effects
                  of bankruptcy, insolvency, fraudulent conveyance,
                  reorganization, moratorium and other similar laws relating to
                  or affecting creditors rights generally, general equitable
                  principles (whether considered in a proceeding in equity or at
                  law) and an implied covenant of good faith and fair dealing;
                  and the Treasury PIES conform or will conform, as the case may
                  be, if issued, in all material respects to the description
                  thereof contained in the Prospectus.

                           (vii) Assuming due authorization, execution and
                  delivery of the Indenture by the Trustee, the Indenture
                  constitutes a legally valid and binding agreement of the
                  Company, enforceable against the Company in accordance with
                  its terms, subject to the effects of bankruptcy, insolvency,
                  fraudulent conveyance, reorganization, moratorium and other
                  similar laws relating to or affecting creditors' rights
                  generally, general equitable principles (whether considered in
                  a proceeding in equity or at law) and an implied covenant of
                  good faith and fair dealing; the Indenture has been duly
                  qualified under the Trust Indenture Act; and the Indenture
                  conforms or will conform, as the case may be, in all material
                  respects to the description thereof contained in the
                  Prospectus.

                           (viii) The Senior Notes have been duly executed,
                  authenticated, issued and delivered as contemplated by the
                  Indenture against payment of the agreed consideration
                  therefor, have been duly and validly issued and outstanding
                  and constitute legally valid and binding obligations of the
                  Company, entitled to the benefits of the Indenture and
                  enforceable against the Company in accordance with their
                  terms, subject to the effects of bankruptcy, insolvency,
                  fraudulent conveyance, reorganization, moratorium and other
                  similar laws relating to or affecting creditors' rights
                  generally, general equitable principles (whether considered in
                  a proceeding in equity or at law) and an implied covenant of
                  good faith and fair dealing; and the
<Page>

                                                                              24

                  Senior Notes conform or will conform, as the case may be, in
                  all material respects with the description thereof contained
                  in the Prospectus.

                           (ix) Assuming due authorization, execution and
                  delivery of the Pledge Agreement by the Purchase Contract
                  Agent, the Securities Intermediary and the Collateral Agent,
                  the Pledge Agreement constitutes a legally valid and binding
                  agreement of the Company, enforceable against the Company in
                  accordance with its terms, subject to the effects of
                  bankruptcy, insolvency, fraudulent conveyance, reorganization,
                  moratorium and other similar laws relating to or affecting
                  creditors' rights generally, general equitable principles
                  (whether considered in a proceeding in equity or at law) and
                  an implied covenant of good faith and fair dealing; and the
                  Pledge Agreement conforms or will conform, as the case may be,
                  in all material respects to the description thereof contained
                  in the Prospectus.

                           (x) Assuming due authorization, execution and
                  delivery of the Remarketing Agreement by the Remarketing
                  Agent, the Remarketing Agreement constitutes a legally valid
                  and binding agreement of the Company, enforceable against the
                  Company in accordance with its terms, subject to the effects
                  of bankruptcy, insolvency, fraudulent conveyance,
                  reorganization, moratorium and other similar laws relating to
                  or affecting creditors' rights generally, general equitable
                  principles (whether considered in a proceeding in equity or at
                  law) and an implied covenant of good faith and fair dealing,
                  and except with respect to the rights of indemnification and
                  contribution under the Remarketing Agreement, where
                  enforcement hereof may be limited by federal or state
                  securities laws or the policies underlying such laws; and the
                  Remarketing Agreement conforms or will conform, as the case
                  may be, in all material respects to the description thereof
                  contained in the Prospectus.

                           (xi) The provisions of the Pledge Agreement are
                  effective to create, in favor of the Collateral Agent for the
                  benefit of the Company, a valid security interest under the
                  Uniform Commercial Code as in effect on the date of such
                  opinion in the State of New York (the "New York UCC") in the
                  Pledged Senior Notes, the Pledged Treasury Portfolio Interest
                  and the Pledged Treasury Securities, as the case may be, from
                  time to time credited to the Collateral Account in accordance
                  with the Pledge Agreement. For purposes of this opinion,
                  capitalized terms used in this paragraph, which are not
                  defined in this Agreement, shall have the meanings ascribed to
                  such terms in the Pledge Agreement.

                           (xii) The unissued shares of Common Stock to be
                  issued and sold by the Company upon settlement of the Purchase
                  Contracts have been duly authorized and reserved for issuance
                  and, when issued, sold and delivered, against payment, in
                  accordance with the provisions of the Purchase Contracts, will
                  be duly and validly issued, fully paid and non-assessable and
                  will conform to the description thereof contained in the
                  Prospectus.

                           (xiii) Except as described in the Prospectus, there
                  are no preemptive or other rights to subscribe for or to
                  purchase, nor is there any restriction on the voting or
                  transfer of, any of the Securities pursuant to the Company's
                  articles of incorporation or by-laws or any agreement or
                  instrument, except such preemptive or
<Page>

                                                                              25

                  other rights and/or restrictions as relate to the transactions
                  contemplated by the Purchase Contract Agreement, the Pledge
                  Agreement and the Indenture.

                           (xiv) The Registration Statement on Form S-3 (File
                  No. 333-72160) was declared effective under the Securities Act
                  at 10:00 a.m. on November 7, 2001, and the Indenture was
                  qualified under the Trust Indenture Act at May 3, 2000 at
                  10:00 a.m. (Washington, D.C. time) and the Prospectus was
                  filed with the Commission pursuant to Rule 424(b)(1) under
                  the Securities Act on the date specified in such opinion on
                  the date specified therein; and no stop order suspending the
                  effectiveness of the Registration Statement has been issued
                  and, to the best knowledge of such counsel, no proceeding
                  for that purpose is pending or threatened by the Commission.

                           (xv) The Registration Statement, the Prospectus
                  and the documents incorporated by reference therein (other
                  than the financial statements and related schedules therein,
                  as to which we express no opinion), when they became
                  effective or were filed with the Commission, as the case may
                  be, complied as to form in all material respects with the
                  requirements of the Securities Act or the Exchange Act, as
                  applicable, and the Trust Indenture Act; and the Indenture
                  conforms in all material respects to the requirements of the
                  Trust Indenture Act.

                           (xvi) The statements made in the Prospectus under the
                  captions "Description of Debt Securities," "Description of the
                  Common Stock," "Description of Stock Purchase Contracts and
                  Stock Purchase Units," "Prospectus Supplement Summary--The
                  Offering," "Description of the PIES, "Description of the
                  Purchase Contracts," "Certain Provisions of the Purchase
                  Contracts, the Purchase Contract Agreement and the Pledge
                  Agreement," and "Description of the Senior Notes", insofar as
                  they purpose to constitute summaries of certain terms of
                  documents referred to therein, and considered together,
                  constitute accurate summaries of the terms of such documents
                  in all material respects.

                           (xvii) The statements in the Prospectus Supplement
                  under the captions "United States Federal Income Tax
                  Consequences" and "Certain ERISA Considerations", insofar as
                  they purport to constitute summaries of matters of United
                  States federal statutes or regulations or legal conclusions
                  with respect thereto, constitute accurate summaries of the
                  matters described therein in all material respects.

                           (xviii) The Company is not an "investment company"
                  within the meaning of, and subject to regulation, under the
                  Investment Company Act.

                           (xix) The Company is a "holding company" under the
                  Holding Company Act, but, pursuant to Section (3)(a)(1) of the
                  Holding Company Act, is exempt from all provisions of the
                  Holding Company Act except Section 9(a)(2) thereof.

                           (xx) To the best knowledge of such counsel, there are
                  no contracts or other documents which are required by the
                  Securities Act to be described in the Prospectus or filed as
                  exhibits to the Registration Statement which have not been so
                  described or filed as required.
<Page>

                                                                              26

                           (xxi) To the best knowledge of such counsel and
                  except as set forth in the Prospectus, there are no legal or
                  governmental proceedings pending to which the Company or any
                  of its subsidiaries is a party or of which any property or
                  assets of the Company or any of its subsidiaries is the
                  subject which, if determined adversely to the Company or such
                  subsidiary, would be reasonably likely to result in a Material
                  Adverse Effect; and, to the best knowledge of such counsel,
                  no such proceedings are overtly threatened or contemplated by
                  governmental authorities or threatened by others.

                           (xxii) To the best knowledge of such counsel and
                  except as set forth in the Prospectus, there are no contracts,
                  agreements or understandings between the Company and any
                  person granting such person the right to require the Company
                  to file a registration statement under the Securities Act with
                  respect to any securities of the Company owned or to be owned
                  by such person or to require the Company to include such
                  securities in the securities registered pursuant to the
                  Registration Statement or in any securities being registered
                  pursuant to any other registration statement filed by the
                  Company under the Securities Act.

                  In addition, the opinion of such counsel shall state that
         nothing has come to the attention of such counsel which lead such
         counsel to believe that the Registration Statement (except for the
         financial statements and financial data included or incorporated by
         reference therein, as to which such counsel need express no belief), as
         of the Effective Date, contained any untrue statement of a material
         fact or omitted to state a material fact required to be stated therein
         or necessary in order to make the statements therein not misleading, or
         that the Prospectus (except as stated above), as of the Remarketing
         Settlement Date, includes any untrue statement of a material fact or
         omits to state a material fact required to be stated therein or
         necessary in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading.

                  The opinion of such counsel may rely, as to all matters of law
         of the State of Nevada, on the opinion of Woodburn and Wedge.

                  (g) On the Remarketing Settlement Date, the Company shall have
         caused to be furnished to the Remarketing Agent a letter addressed to
         the Remarketing Agent and dated such date, in form and substance
         satisfactory to the Remarketing Agent, of Deloitte & Touche LLP or such
         other firm of nationally recognized independent public accountants
         satisfactory to the Remarketing Agent, containing statements and
         information of the type ordinarily included in accountants' "comfort
         letters" with respect to certain financial information contained in the
         Prospectus and the Remarketing Materials.

                  (h) The Company shall have furnished to the Remarketing Agent
         a certificate, dated the Remarketing Settlement Date, of its President
         or any Vice President and a principal financial or accounting officer
         of the Company, stating that:

                           (i) the representations and warranties of the Company
                  contained in this Agreement are true and correct as of the
                  Remarketing Settlement Date, and the Company performed all
                  covenants and obligations and satisfied all conditions
                  required of it under this Agreement;
<Page>

                                                                              27

                           (ii) no stop order suspending the effectiveness of
                  the Registration Statement or of any part thereof shall have
                  been issued, and no proceedings for that purpose shall have
                  been instituted or, to the knowledge of the Company, shall be
                  contemplated by the Commission;

                           (iii) since the respective dates as of which
                  information is given in the Prospectus other than as set forth
                  in the Prospectus (exclusive of any amendments or supplements
                  thereto subsequent to the date of this Agreement), (A) there
                  has not occurred any change or any development that might have
                  a Material Adverse Effect, (B) there has not been any change
                  in the capital stock, the short-term debt, or the long-term
                  debt of the Company or any of its subsidiaries that might have
                  a Material Adverse Effect, (C) neither the Company nor any of
                  its subsidiaries has incurred any material liability or
                  obligation, direct or contingent and (D) a Material Loss has
                  not occurred; and

                           (iv) they have examined the Registration Statement
                  and the Prospectus and, in their opinion (A) as of the
                  Effective Date, the Registration Statement and Prospectus did
                  not include any untrue statement of a material fact and did
                  not omit to state a material fact required to be stated
                  therein or necessary to make the statements therein not
                  misleading, and (B) since the Effective Date no event has
                  occurred which should have been set forth in a supplement or
                  amendment to the Registration Statement or the Prospectus and
                  which has not been so set forth.

                  (i) Without the prior written consent of the Remarketing
         Agent, the Indenture shall not have been amended in any manner, that,
         in the reasonable judgment of the Remarketing Agent, materially changes
         the nature of the Remarketing Senior Notes or the Remarketing
         Procedures.

                  (j) Except as disclosed in the Prospectus (exclusive of any
         amendment or supplements thereto subsequent to the date of this
         Agreement), neither the Company nor any of its subsidiaries shall have
         sustained since the date of the latest audited financial statements
         incorporated by reference into the Prospectus (A) any loss or
         interference with its business from fire, explosion, flood or other
         calamity, whether or not covered by insurance, or from any labor
         dispute or court and/or governmental action, order or decree and (B)
         since such date there shall not have been any change or any development
         reasonably likely to result in a change in of affecting the business,
         general affairs, management, condition (financial or otherwise),
         stockholders' equity or results of operations of the Company and its
         subsidiaries, the effect of which, in any such case described in clause
         (A) or (B), is, in the judgment of the Remarketing Agent, so material
         (with respect to the Company and its subsidiaries taken as a whole) and
         adverse as to make it impracticable or inadvisable to proceed with the
         Remarketing on the terms and in the manner contemplated in the
         Prospectus, the Remarketing Materials, the Indenture and this
         Agreement.

                  (k) Between the Remarketing Date to, and including, the
         Remarketing Settlement Date, (i) no downgrading shall have occurred in
         the rating accorded the Company's or any of the Company's subsidiaries'
         debt securities or preferred stock by any "nationally recognized
         statistical rating organization," as that term is defined by the
         Commission for purposes of Rule 436(g)(2) of the Securities Act and
         (ii) no such
<Page>

                                                                              28

         organization shall have publicly announced, or privately informed the
         Company, that it has under surveillance or review, with possible
         negative implications, its rating of any of the Company's or any of the
         Company's subsidiaries' debt securities or preferred stock.

                  (l) Between the Remarketing Date to, and including, the
         Remarketing Settlement Date, there shall not have occurred any of the
         following: (i) trading in securities generally on the New York Stock
         Exchange, the American Stock Exchange, the NASDAQ or the
         over-the-counter market, or trading in any securities of the Company on
         any exchange or in the over-the-counter market, shall have been
         suspended or the settlement of such trading generally shall have been
         materially disrupted or minimum prices shall have been established on
         any such exchange or such market by the Commission, by such exchange or
         by any other regulatory body or governmental authority having
         jurisdiction, (ii) a banking moratorium shall have been declared by
         Federal or state authorities or a material disruption in commercial
         banking or securities settlement or clearance services in the United
         States, (iii) the United States shall have become engaged in
         hostilities, there shall have been an escalation in hostilities
         involving the United States, there shall have been a declaration of a
         national emergency or war by the United States, or an act of terrorism
         shall have been committed against the United States or any of its
         nationals or properties or (iv) there shall have occurred a calamity or
         crisis or such a material adverse change in general domestic or
         international economic, political or financial conditions, including
         without limitation as a result of terrorist activities, or the effect
         of international conditions on the financial markets in the United
         States shall be such, as to make it, in the judgment of the Remarketing
         Agent, impracticable or inadvisable to proceed with the Remarketing on
         the terms and in the manner contemplated in the Prospectus, the
         Remarketing Materials, the Indenture and this Agreement.

                  All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Remarketing Agent.

                  Section 7. INDEMNIFICATION AND CONTRIBUTION.

                  (a) The Company shall indemnify and hold harmless the
Remarketing Agent, its officers, employees and each of its directors and each
person, if any, who controls the Remarketing Agent within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to the Remarketing), to which
the Remarketing Agent, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in (A) the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (B) any blue sky application or other document prepared or executed
by the Company (or based upon any written information furnished by the Company)
filed in any jurisdiction specifically for the purpose of qualifying any or all
of the Remarketing Senior Notes under the securities laws of any state or other
jurisdiction (such application, document or information being hereinafter called
a "Blue Sky Application"), (ii) the omission or alleged omission to state in the
Registration Statement, the Prospectus, or in any amendment or supplement
thereto or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by the Remarketing
Agent in connection with, or relating
<Page>

                                                                              29

in any manner to, the Remarketing Senior Notes, and which is included as part of
or referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (PROVIDED that, the
Company shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failure to act undertaken or omitted to be taken by the Remarketing Agent
through its gross negligence or willful misconduct), and shall reimburse the
Remarketing Agent and each such officer, employee, director or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by the Remarketing Agent, officer, employee, director or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Prospectus or in any
Remarketing Materials, or in any such amendment or supplement, in reliance upon
and in conformity with the written information concerning the Remarketing Agent
furnished to the Company by the Remarketing Agent specifically for inclusion
therein which information is specifically identified to the Company in a letter
sent by the Remarketing Agent, and PROVIDED, FURTHER, that the Company shall not
be liable to indemnify the Remarketing Agent or any person who controls the
Remarketing Agent on account of any such loss, liability, claim, damage or
expense arising out of any such defect or alleged defect in any Prospectus if a
copy of the Prospectus (exclusive of any documents incorporated by reference
therein) shall not have been given or sent by the Remarketing Agent with or
prior to the written confirmation of the sale in connection with the Remarketing
involved to the extent that (i) the Prospectus would have cured such defect or
alleged defect and (ii) sufficient quantities of the Prospectus were timely made
available to the Remarketing Agent. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to the
Remarketing Agent or to any officer, employee or controlling person of the
Remarketing Agent.

                  (b) The Remarketing Agent shall indemnify and hold harmless
the Company, its officers and employees, each of its directors, and each person,
if any, who controls the Company within the meaning of the Securities Act from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, in any Blue Sky Application or in the
Remarketing Materials or (ii) the omission or alleged omission to state in the
Registration Statement, the Prospectus or in any amendment or supplement
thereto, in any Blue Sky Application or in the Remarketing Materials, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with the written information furnished to the
Company by the Remarketing Agent specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the
<Page>

                                                                              30

Remarketing Agent may otherwise have to the Company or any such director,
officer, employee or controlling person.

                  (c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has
been materially prejudiced by such failure and, PROVIDED, FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 7.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that,
if the defendants (including impleaded parties) in any such action include both
the indemnified party and the indemnifying party (or parties) and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party (or parties),
the indemnified party shall have the right to select separate counsel to assert
such legal defenses and to participate otherwise in the defense of such action
on behalf of such indemnified party. The indemnifying party shall bear the
reasonable fees and expenses of outside counsel retained by the indemnified
party if (i) the indemnified party shall have retained such counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel (in
addition to one local counsel), representing the indemnified parties under
Section 7(a) or 7(b), as the case may be, who are parties to such action), (ii)
the indemnifying party shall have elected not to assume the defense of such
action, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the commencement of the action, or (iv) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. Notwithstanding the foregoing
sentence, an indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent (such consent not to be
unreasonably withheld), but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any
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                                                                              31

such action, the indemnifying party shall indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.

                  (d) If the indemnification provided for in this Section 7
shall for any reason be unavailable or insufficient to hold harmless an
indemnified party under Section 7(a) or 7(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Remarketing Agent on the other
from the Remarketing or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Remarketing Agent on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Remarketing Agent on the other with respect to the
Remarketing shall be deemed to be in the same proportion as the total proceeds
from the Remarketing (before deducting expenses) bear to the total fees received
by the Remarketing Agent with respect to the Remarketing. The relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Remarketing Agent,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Remarketing Agent agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 7(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7(d), the Remarketing Agent shall not be required to contribute any
amount in excess of its fees under Section 5 exceeds the amount of any damages
which the Remarketing Agent has otherwise paid or become liable to pay by reason
of any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

                  Section 8. RESIGNATION AND REMOVAL OF THE REMARKETING AGENT.

                  The Remarketing Agent may resign and be discharged from its
duties and obligations hereunder by giving 60 days' prior written notice to the
Company, the Depositary and the Trustee. The Company may remove the Remarketing
Agent by giving 60 days' prior written notice to the removed Remarketing Agent,
the Depositary and the Trustee upon any of the following events:

                  (i) the Remarketing Agent becomes involved as a debtor in a
         bankruptcy, insolvency or similar proceeding;
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                                                                              32

                  (ii) the Remarketing Agent shall not be among the ten
         underwriters with the largest volume underwritten in dollars, on a lead
         managed basis, of U.S. domestic debt securities during the twelve-month
         period ended as of the last calendar quarter preceding the Remarketing
         Date;

                  (iii) the Remarketing Agent shall be subject to one or more
         legal restrictions preventing the performance of its obligations
         hereunder;

                  (iv) the Remarketing Agent shall determine that, because there
         has occurred an event of the kind described under Section 6(k), 6(l) or
         6(m) using its commercially reasonable efforts, the Remarketing Agent
         would be unable to consummate the Remarketing on the terms and in the
         manner contemplated in the Prospectus and the Remarketing Materials; or

                  (v) the Company shall determine in its sole discretion that
         the Remarketing Agent, using its commercially reasonable efforts, would
         be unable to consummate the Remarketing on the terms and in the manner
         contemplated herein and in the Indenture and the Stock Purchase
         Agreement.

If any Remarketing Agent resigns or is removed, the Company shall use its best
efforts to appoint a successor Remarketing Agent and enter into a remarketing
agreement, as described in the preceding sentence, as soon as reasonably
practicable. The provisions of Sections 4, 7 and 8 shall survive the resignation
or removal of any Remarketing Agent pursuant to this Agreement.

                  Section 9. DEALING IN THE REMARKETING SENIOR NOTES.

                  The Remarketing Agent, when acting as a Remarketing Agent or
in its individual or any other capacity, may, to the extent permitted by law,
buy, sell, hold and deal in any of the Remarketing Senior Notes, including in
connection with the Remarketing. The Remarketing Agent may exercise any vote or
join in any action which any beneficial owner of Remarketing Senior Notes may be
entitled to exercise or take pursuant to the Indenture with like effect as if it
did not act in any capacity hereunder. The Remarketing Agent, in its individual
capacity, either as principal or agent, may also engage in or have an interest
in any financial or other transaction with the Company as freely as if it did
not act in any capacity hereunder.

                  Section 10. REMARKETING AGENT'S PERFORMANCE; DUTY OF CARE.

                  (a) The duties and obligations of the Remarketing Agent shall
be determined solely by the express provisions of this Agreement, and, to the
extent the Remarketing Procedures are set forth elsewhere, in the Indenture and
the Purchase Contract Agreement. No implied covenants or obligations of or
against the Remarketing Agent shall be read into this Agreement, the Indenture
or the Purchase Contract Agreement.

                  (b) In the absence of bad faith on the part of the Remarketing
Agent, the Remarketing Agent may conclusively rely upon any document furnished
to it, which purports to conform to the requirements of this Agreement, the
Indenture or the Purchase Contract Agreement as to the truth of the statements
expressed in any of such documents. The Remarketing Agent shall be protected in
acting upon any document or communication reasonably believed by it to have been
signed, presented or made by the proper party or parties. The Remarketing Agent,
acting under this
<Page>

                                                                              33

Agreement, shall incur no liability to the Company or to any holder of
Remarketing Senior Notes in its individual capacity or as Remarketing Agent for
any action or failure to act, on its part in connection with a Remarketing or
otherwise (including, but not limited to, in respect of the settlement of any
Successful Remarketing that is delayed, incomplete or abandoned for any reason),
except if such liability is judicially determined to have resulted from the
gross negligence or willful misconduct on its part.

                  (c) If at any time during the term of this Agreement, any
Event of Default (as defined in the Indenture) under the Indenture, or any event
that with the passage of time or the giving of notice or both would become on
Event of Default under the Indenture, has occurred and is continuing under the
Indenture, then the obligations and duties of the Remarketing Agent under this
Agreement shall be suspended until such default or event has been cured. The
Company will cause the Trustee and the Purchase Contract Agent to give the
Remarketing Agent notice of all such defaults and events of which such Trustee,
agent or administrator is aware.

                  (d) The Remarketing Agent may purchase Remarketing Senior
Notes for its own account. However, under no circumstances, shall the
Remarketing Agent or the Company be obligated to purchase any Senior Notes in
connection with a Remarketing.

                  (e) The right of each Holder of Senior Notes to have its
Senior Notes remarketed, pursuant to the Indenture, will be limited, however, to
the extent that (i) the Remarketing Agent conducts a Remarketing pursuant to the
terms of this Agreement, (ii) the Remarketing Agent is 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 Agent and (iv) the
Remarketing may not commence or be consummated pursuant to applicable law.

                  Section 11. MERGER CONSOLIDATION, SALE OR CONVEYANCE.

                  (a) 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 Remarketing Agent, all
the obligations of the Company with respect to this Agreement, and the Company
or the successor or transferee Person, as the case may be, (i) shall be a
Corporation organized and existing under the laws of one of the states in the
United States and (ii) shall not, immediately after such consolidation or merger
or sale, lease or conveyance, be in default in the performance or any covenant
or condition hereunder. The Company shall deliver to the Remarketing Agent an
Officers' Certificate (as defined in the Original Indenture) and an Opinion of
Counsel (as defined in the Original Indenture), each stating that such
consolidation, merger sale, lease or conveyance and such supplemental agreement
comply with this Agreement and that all conditions precedent to the consummation
of any such consolidation, or merger, or any sale, lease or conveyance have been
met.

                  (b) Upon any consolidation or merger, or any sale, lease or
conveyance of all or substantially all of the assets of the Company in
accordance with Section 11(a), 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
<Page>

                                                                              34

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.

                  (c) Nothing in this Agreement shall be deemed to prevent or
restrict; (a) any consolidation or merger after the consummation of which the
Company would be the surviving or resulting entity or any conveyance or other
transfer or lease of any part of the properties of the Company which does not
constitute the entirety, or substantially the entirety, thereof; or (b) the
approval by the Company of, or the consent by the Company to, any consolidation
or merger to which any Restricted Subsidiary (as defined in the Original
Indenture) or any other subsidiary or affiliate of the Company may be a party or
any conveyance, transfer or lease by any Subsidiary (as defined in the Original
Indenture) or any such other subsidiary or affiliate of any of its assets.

                  Section 12. TERMINATION.

                  This Agreement shall terminate as to the Remarketing Agent on
the effective date of the resignation or removal of the Remarketing Agent
pursuant to Section 10. In addition, the obligations of the Remarketing Agent
hereunder may be terminated by it by notice given to the Company prior to 10:00
a.m. (New York City time) on the Remarketing Date if, prior to that time, any of
the events described in Section 6(k), 6(l) or 6(m) shall have occurred.

                  Section 13. NOTICES.

                  All requests and notices hereunder shall be in writing, and:

                  (a) if to the Remarketing Agent, shall be delivered or sent by
         mail, or facsimile transmission to Lehman Brothers Inc., 101 Hudson
         St., Jersey City, New Jersey 07302, Attention: Syndicate Department
         (Fax: (201) 545-2618), with copy to, in the case of any notice pursuant
         to Section 7(c), to Lehman Brothers Inc., 101 Hudson St., Jersey City,
         New Jersey 07302, General Counsel's Office (Fax: (201-321-2207);
<Page>

                                                                              35

                  with a copy to Simpson Thacher & Bartlett, 425 Lexington
         Avenue, New York, New York 10017, Attention: John D. Lobrano, Esq.
         (Fax: (212) 455-2502);

                  (b) if to the Company shall be delivered or sent by mail or
         facsimile transmission to Sierra Pacific Resources, 6100 Neil Road,
         Reno, Nevada 89511, Attention: Mr. Richard K. Atkinson (Fax: (775)
         834-5462).

                  with a copy to Choate, Hall and Stewart, Exchange Place, 53
         State Street, Boston, Massachusetts 02109, Attention: William C.
         Rogers, Esq. (Fax: (617) 248-4000);

or such other address and fax number as specified in writing by one party hereto
to another. Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof.

                  Section 14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT.

                  This Agreement shall inure to the benefit of and be binding
upon the Remarketing Agent, the Company and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (x) the representations, warranties, indemnity and
contribution agreements and other agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the officers and
employees of the Remarketing Agent and the person or persons, if any, who
control the Remarketing Agent within the meaning of Section 15 of the Securities
Act and (y) the indemnity and contribution agreements of the Remarketing Agent
contained in Section 7 of this Agreement shall be deemed to be for the benefit
of directors, officers and employees of the Company and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing
contained in this Agreement is intended or shall be construed to give any
person, other than the persons referred to herein, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.

                  Section 15. SURVIVAL.

                  The respective indemnities, representations, warranties and
agreements of the Company and the Remarketing Agent contained in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the Remarketing and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.

                  Section 16. GOVERNING LAW.

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

                  Section 17. COUNTERPARTS.

                  This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
<Page>

                                                                              36

                  Section 18. HEADINGS.

                  The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

                  Section 19. 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.
<Page>

                                                                              37

                  If the foregoing correctly sets forth the agreement between
the Company and the Remarketing Agent, please indicate your acceptance in the
space provided for that purpose below.

                                    Very truly yours,

                                    SIERRA PACIFIC RESOURCES

                                    By:
                                        -----------------------------------
                                         Name:
                                         Title:

Accepted:

LEHMAN BROTHERS INC.

BY:
    --------------------------------------
           AUTHORIZED REPRESENTATIVE

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