Exhibit 10.1
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$60,000,000
CREDIT AGREEMENT
AMONG
NEVADA POWER COMPANY,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
AND
MERRILL LYNCH CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT
Dated as of June 30, 2003
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MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
AS SOLE LEAD ARRANGER AND SOLE BOOKRUNNER
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................................................... 1
1.1 Defined Terms.................................................................................. 1
1.2 Other Definitional Provisions.................................................................. 14
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS....................................................................... 14
2.1 Revolving Credit Commitments................................................................... 14
2.2 Procedure for Revolving Loan Borrowing......................................................... 14
2.3 Fees, etc...................................................................................... 15
2.4 Termination or Reduction of Commitments........................................................ 15
2.5 Repayment of Loans; Evidence of Debt........................................................... 15
2.6 Optional Prepayments........................................................................... 16
2.7 Mandatory Prepayments.......................................................................... 16
2.8 Conversion and Continuation Options............................................................ 17
2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches...................................... 17
2.10 Interest Rates and Payment Dates............................................................... 18
2.11 Computation of Interest and Fees............................................................... 18
2.12 Inability to Determine Interest Rate........................................................... 18
2.13 Pro Rata Treatment and Payments................................................................ 19
2.14 Requirements of Law............................................................................ 20
2.15 Taxes.......................................................................................... 21
2.16 Indemnity...................................................................................... 23
2.17 Illegality..................................................................................... 23
2.18 Change of Lending Office....................................................................... 23
2.19 Replacement of Lenders under Certain Circumstances............................................. 24
SECTION 3. REPRESENTATIONS AND WARRANTIES........................................................................ 24
3.1 Financial Condition............................................................................ 24
3.2 No Change...................................................................................... 25
3.3 Corporate Existence; Compliance with Law....................................................... 25
3.4 Corporate Power; Authorization; Enforceable Obligations........................................ 25
3.5 No Legal Bar................................................................................... 25
3.6 No Material Litigation......................................................................... 26
3.7 No Default..................................................................................... 26
3.8 Ownership of Property; Liens................................................................... 26
3.9 Intellectual Property.......................................................................... 26
3.10 Taxes.......................................................................................... 26
3.11 Federal Regulations............................................................................ 26
3.12 Government Approval and Filings................................................................ 26
3.13 Labor Matters.................................................................................. 27
3.14 ERISA.......................................................................................... 27
3.15 Investment Company Act; Other Regulations...................................................... 27
3.16 Subsidiaries................................................................................... 27
3.17 Use of Proceeds................................................................................ 28
3.18 Environmental Matters.......................................................................... 28
3.19 Accuracy of Information, etc................................................................... 29
3.20 Bond Delivery Agreement; G&R Series F Mortgage Bond............................................ 29
3.21 Solvency....................................................................................... 30
SECTION 4. CONDITIONS PRECEDENT.................................................................................. 30
4.1 Conditions to Initial Loans.................................................................... 30
4.2 Conditions to Each Loan........................................................................ 31
SECTION 5. AFFIRMATIVE COVENANTS................................................................................. 31
5.1 Financial Statements........................................................................... 31
5.2 Certificates; Other Information................................................................ 32
5.3 Payment of Obligations......................................................................... 32
5.4 Conduct of Business and Maintenance of Existence, etc.......................................... 33
5.5 Maintenance of Property; Insurance............................................................. 33
5.6 Inspection of Property; Books and Records; Discussions......................................... 33
5.7 Notices........................................................................................ 33
5.8 Environmental Laws............................................................................. 34
5.9 Refinancing Securities......................................................................... 34
SECTION 6. NEGATIVE COVENANTS.................................................................................... 34
6.1 Consolidated Total Debt Ratio.................................................................. 34
6.2 Limitation on Indebtedness..................................................................... 35
6.3 Limitation on Liens............................................................................ 35
6.4 Limitation on Fundamental Changes.............................................................. 37
6.5 Limitation on Disposition of Property.......................................................... 37
6.6 Limitation on Restricted Payments.............................................................. 37
6.7 Limitation on Investments...................................................................... 38
6.8 Modifications of Instruments, etc.............................................................. 38
6.9 Limitation on Transactions with Affiliates..................................................... 38
6.10 Limitation on Sales and Leasebacks............................................................. 38
6.11 Limitation on Changes in Fiscal Periods........................................................ 38
6.12 Limitation on Negative Pledge Clauses.......................................................... 39
6.13 Limitation on Restrictions on Subsidiary Distributions......................................... 39
6.14 Limitation on Prepayments of and Modifications to Subordinated Debt............................ 39
6.15 Limitation on Lines of Business................................................................ 39
6.16 Limitation on Amendments to Other Documents.................................................... 39
6.17 Limitation on Hedge Agreements................................................................. 39
6.18 Limitations on Release from Liens.............................................................. 40
SECTION 7. EVENTS OF DEFAULT..................................................................................... 40
SECTION 8. THE ADMINISTRATIVE AGENT.............................................................................. 42
8.1 Appointment.................................................................................... 42
8.2 Delegation of Duties........................................................................... 42
8.3 Exculpatory Provisions......................................................................... 43
8.4 Reliance by the Administrative Agent........................................................... 43
8.5 Notice of Default.............................................................................. 43
8.6 Non-Reliance on Administrative Agent and Other Lenders......................................... 44
8.7 Indemnification................................................................................ 44
8.8 Agent in Its Individual Capacity............................................................... 45
8.9 Successor Administrative Agent................................................................. 45
8.10 The Arranger................................................................................... 45
SECTION 9. MISCELLANEOUS......................................................................................... 45
9.1 Amendments and Waivers......................................................................... 45
9.2 Notices........................................................................................ 46
9.3 No Waiver; Cumulative Remedies................................................................. 47
9.4 Survival of Representations and Warranties..................................................... 47
9.5 Payment of Expenses............................................................................ 47
9.6 Successors and Assigns; Participations and Assignments......................................... 48
9.7 Adjustments; Set-off........................................................................... 51
9.8 Counterparts................................................................................... 52
9.9 Severability................................................................................... 52
9.10 Integration.................................................................................... 52
9.11 GOVERNING LAW.................................................................................. 52
9.12 Submission To Jurisdiction; Waivers............................................................ 52
9.13 Acknowledgments................................................................................ 53
9.14 Confidentiality................................................................................ 53
9.15 Accounting Changes............................................................................. 54
9.16 WAIVERS OF JURY TRIAL.......................................................................... 54
SCHEDULES:
2.1 Commitments
3.2 Disclosed Matters
3.4 Consents, Authorizations, Filings and Notices
3.6 Material Litigation
3.7 Contractual Obligations
3.16 Subsidiaries
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
6.5 Scheduled Asset Sales
7(e)(ii) Certain Hedge Agreements
EXHIBITS:
A Form of Bond Delivery Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E-1 Form of Legal Opinion of Choate, Hall & Stewart
E-2 Form of Legal Opinion of Woodburn and Wedge
F Form of Revolving Credit Note
G Form of Exemption Certificate
H Form of Borrowing Notice
CREDIT AGREEMENT, dated as of June 30, 2003, among NEVADA
POWER COMPANY, a Nevada corporation (the "Borrower"), the several banks and
other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE FENNER &
SMITH, as sole lead arranger and sole bookrunner (in such capacity, the
"Arranger"), and MERRILL LYNCH CAPITAL CORPORATION, as administrative agent (in
such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make
available to the Borrower a revolving credit facility on the terms set forth
herein; and
WHEREAS, the Lenders are willing to make such credit facility
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the amount of such
Lender's Commitment then in effect or, if the Revolving Commitments have been
terminated, the amount of such Lender's Loans then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the sum of the Aggregate Exposures of all Lenders at
such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": (a) with respect to Base Rate Loans,
1.50%, and (b) with respect to Eurodollar Loans, 2.50%.
"Arranger": as defined in the preamble hereto.
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"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d) or (e) of Section 6.5) which yields gross proceeds to the
Borrower or any of its Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $1,000,000.
"Assignee": as defined in Section 9.6(c).
"Assignor": as defined in Section 9.6(c).
"Available Revolving Commitment": as to any Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Commitment
then in effect over (b) such Lender's Loans then outstanding.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the prime
lending rate as set forth on the British Banking Association Telerate Page 5 (or
such other comparable page as may, in the opinion of the Administrative Agent,
replace such page for the purpose of displaying such rate), as in effect from
time to time. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefitted Lender": as defined in Section 9.7.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Bond Delivery Agreement": the Bond Delivery Agreement, dated
as of the Closing Date, between the Borrower and the Administrative Agent,
substantially in the form of Exhibit A.
"Borrower": as defined in the preamble hereto.
"Borrowing Notice": a notice from the Borrower, substantially
in the form of, and containing the information prescribed by, Exhibit I,
delivered to the Administrative Agent.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.
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"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2
by Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; and (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Change of Control": the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) shall become, or obtain rights (whether by means or warrants, options or
otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 20% of the
outstanding common stock of Resources; (b) Resources shall cease to own and
control, of record and beneficially, directly, 100% of each class of outstanding
Capital Stock of the Borrower free and clear of all Liens or (c) for any period
of 12 consecutive calendar months, a majority of the Board of Directors of
Resources shall no longer be composed of individuals (i) who were members of
said Board on the first day of such period, (ii) whose election or
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nomination to said Board was approved by individuals referred to in clause (i)
above constituting at the time of such election or nomination at least a
majority of said Board or (iii) whose election or nomination to said Board was
approved by individuals referred to in clauses (i) and (ii) above constituting
at the time of such election or nomination at least a majority of said Board.
"Closing Date": the date on which the conditions precedent set
forth in Section 4.1 shall have been satisfied, which date shall be not later
than June 30, 2003.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment": as to any Lender, the obligation of such Lender
to make Loans to the Borrower pursuant to Section 2.1 in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth under the
heading "Commitment" opposite such Lender's name on Schedule 2.1. The original
aggregate amount of the Commitments is $60,000,000.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.
"Consolidated Total Capitalization": at any date, the sum of
(a) Consolidated Total Debt at such date, plus (b) all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date (including
all preferred Capital Stock issued by the Borrower).
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries at
such date, determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Debt Ratio": at any date, the ratio of (a)
Consolidated Total Debt at such date to (b) Consolidated Total Capitalization at
such date.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Default": any of the events specified in Section 7, whether
or not any
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requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "Dispose" and "Disposed of" shall have correlative
meanings.
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any state,
local, municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has been, is
now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
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Eurodollar Base Rate
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1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"First Mortgage Bonds": obligations issued from time to time
under, and secured by, the First Mortgage Indenture.
"First Mortgage Indenture": the Indenture of Mortgage dated as
of October 1, 1953, from the Borrower to Deutsche Bank Trust Company Americas,
as trustee, as modified, amended or supplemented at any time or from time to
time by supplemental indentures.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"G&R Series F Mortgage Bond": the Borrower's General and
Refunding Mortgage Bond, Series F, due the Revolving Credit Termination Date,
issued to the Administrative Agent under the General and Refunding Mortgage
Indenture, in the principal amount of $60,000,000.
"General and Refunding Mortgage Indenture": the General and
Refunding Mortgage Indenture, dated as of May 1, 2001, between the Borrower and
The Bank of New York, as trustee, as the same may be amended, modified or
supplemented from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Granting Lender": as defined in Section 9.6(g).
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit), if to
induce the creation of such obligation of such other
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Person the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Hedge Agreements": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts or
similar arrangements entered into by the Borrower or its Subsidiaries providing
for protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies. The term "Hedge Agreements" shall in
any event include any forward energy purchase or sale contracts or similar
arrangements entered into by the Borrower or its Subsidiaries.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property or
services (other than trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such Property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above; and (i)
all obligations of the kind referred to in clauses (a) through (h) above secured
by (or for which the holder of such obligation has an existing right, contingent
or otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such
8
Person, whether or not such Person has assumed or become liable for the payment
of such obligation.
"Indemnified Liabilities": as defined in Section 9.5.
"Indemnitee": as defined in Section 9.5.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, technology, know-how and processes,
and all rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of July 2003 and August 2003 to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan, the
last day of each Interest Period applicable thereto and (c) as to any Loan, the
date of any repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two or three months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two or three months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(1)if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
date final payment is due on the Loans shall end on such due
date; and
(3) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period.
9
"Investments": as defined in Section 6.7.
"Lenders": as defined in the preamble hereto.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).
"Loan": as defined in Section 2.1.
"Loan Documents": this Agreement, the Bond Delivery Agreement
and the Revolving Credit Notes and any amendment, waiver, supplement or other
modification to any of the foregoing.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Material Environmental Amount": an amount or amounts payable
by the Borrower and/or any of its Subsidiaries, in the aggregate in excess of
$5,000,000, for: costs to comply with any Environmental Law; costs of any
investigation, and any remediation, of any Material of Environmental Concern;
and compensatory damages (including, without limitation damages to natural
resources), punitive damages, fines, and penalties pursuant to any Environmental
Law.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"Merrill Lynch Entity": any of Merrill Lynch Capital
Corporation or any of its Affiliates.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien
10
expressly permitted hereunder on any asset which is the subject of such Asset
Sale or Recovery Event (other than any Lien pursuant to a Security Document) and
other customary fees and expenses actually incurred in connection therewith and
net of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements) and (b) in connection with the issuance of any Capital
Stock or instruments or the incurrence of loans, the cash proceeds received from
such issuance or incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 2.15(a).
"Non-U.S. Lender": as defined in Section 2.15(d).
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise.
"Offering": as defined in Section 5.9.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 9.6(b).
"Payment Amounts": as defined in Section 7(e).
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
11
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Receivables Sale Documentation": collectively, (i) the
Receivables Purchase Agreement, dated as of October 29, 2002, among Nevada Power
Company, as Seller, and Nevada Power Receivables Finance Corporation, (ii) the
Sale and Servicing Agreement, dated as of October 29, 2002, among SRP
Receivables Finance Corporation, as Issuer, Nevada Power Receivables Finance
Corporation, as Seller, and Nevada Power Company, as Servicer, (iii) the Base
Indenture, dated as of October 29, 2002, among SRP Receivables Finance
Corporation, as Issuer, and Deutsche Bank Trust Company Americas, as Indenture
Trustee, (iv) the Series 2002-1 Indenture Supplement, dated as of October 29,
2002, among SRP Receivables Finance Corporation, as Issuer, Sierra Pacific
Resources, as Administrator, certain conduit purchasers, certain committed
purchasers, certain program managers, Lehman Commercial Paper Inc., as Master
Administrator, and Deutsche Bank Trust Company Americas, as Indenture Trustee,
(v) the Administration Agreement, between SRP Receivables Finance Corporation
and Sierra Pacific Resources, as Administrator, (vi) the Performance Guaranty,
dated as of October 29, 2002, made by Sierra Pacific Resources in favor of the
Indenture Trustee, (vii) the Collection Account Control Agreement, dated as of
October 29, 2002, between the SRP Receivables Finance Corporation, Deutsche Bank
Trust Company Americas, as Indenture Trustee and Deutsche Bank Trust Company
Americas, as Collection Account Securities Intermediary, (viii) the Lock-Box
Agreement, dated as of October 29, 2002, among Nevada Power Company, SRP
Receivables Finance Corporation, Deutsche Bank Trust Company Americas, as
Indenture Trustee, Deutsche Bank Trust Company Americas, as Lock-Box Bank and
EDS Information Services L.L.C., as Lock-Box Processor, (ix) the Lock-Box
Agreement, dated as of October 29, 2002, among Sierra Pacific Power Company, SRP
Receivables Finance Corporation, Deutsche Bank Trust Company Americas, as
Indenture Trustee, Deutsche Bank Trust Company Americas, as Lock-Box Bank and
EDS Information Services L.L.C., as Lock-Box Processor, (x) the Remittance
Account Agreement, dated at or about October 30, 2002, among the Bank, SRP
Receivables Finance Corporation, as Issuer, Nevada Power Company, as Servicer
and Deutsche Bank Trust Company Americas, as Indenture Trustee and (xi) the
Remittance Account Agreement, dated at or about October 30, 2002, among the
Bank, SRP Receivables Finance Corporation, as Issuer, Sierra Pacific Power
Company, as Servicer and Deutsche Bank Trust Company Americas, as Indenture
Trustee.
"Receivables Sale Transaction": the transactions contemplated
by the Receivables Sale Documentation.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Borrower or any of its Subsidiaries.
12
"Refinancing Securities": as defined in Section 5.9.
"Register": as defined in Section 9.6(d).
"Regulation H": Regulation H of the Board as in effect from
time to time.
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Related Fund": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender or an affiliate of such investment advisor, by such
Lender or an Affiliate of such Lender.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg.Section 4043.
"Required Lenders": at any time, the holders of more than 50%
of the Total Commitments then in effect or, if the Commitments have been
terminated, the Total Loans then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Resources": Sierra Pacific Resources, a Nevada corporation.
"Responsible Officer": the chief executive officer, president,
senior vice-president, vice-president, chief financial officer, treasurer or
assistant treasurer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer or the treasurer of the Borrower.
"Restricted Payments": as defined in Section 6.6.
"Revolving Commitment Period": the period from and including
the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Note": as defined in Section 2.5(e).
"Revolving Credit Termination Date": the earlier of (a)
September 8, 2003 and (b) two Business Days after the date on which the Borrower
issues the Refinancing Securities.
"Revolving Percentage": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the Total
Commitments or, at any time after the
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Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Loans then outstanding constitutes of the
Total Loans then outstanding.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Security Documents": the collective reference to the Bond
Delivery Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any Property of any Person to secure the
obligations and liabilities of the Borrower under any Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"SPC": as defined in Section 9.6(g).
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subordinated Debt": as defined in Section 6.14.
"Transferee": as defined in Section 9.14.
"Total Commitments": at any time, the aggregate amount of the
Commitments then in effect.
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"Total Loans": at any time, the aggregate principal amount of
the Loans outstanding at such time.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
1.2 Other Definitional Provisions. (a)Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) All calculations of financial ratios set forth in
Section 6.1 shall be calculated to the same number of decimal places as the
relevant ratios are expressed in and shall be rounded upward if the number in
the decimal place immediately following the last calculated decimal place is
five or greater. For example, if the relevant ratio is to be calculated to the
hundredth decimal place and the calculation of the ratio is 5.126, the ratio
will be rounded up to 5.13.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. Subject to the terms
and conditions hereof, each Lender severally agrees to make revolving credit
loans ("Loans") to the Borrower from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
which does not exceed the amount of such Lender's Commitment. During the
Revolving Commitment Period the Borrower may use the Commitments by borrowing,
prepaying the Loans in whole or in part, and reborrowing, all in accordance with
the terms and conditions hereof. The Loans may from time to time be Eurodollar
Loans or Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.8.
2.2 Procedure for Revolving Loan Borrowing(a) . The
Borrower may borrow under the Commitments during the Revolving Commitment Period
on any Business Day,
15
provided that the Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 10:00
A.M., New York City time, (a) two Business Days prior to the requested Borrowing
Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the
requested Borrowing Date, in the case of Base Rate Loans), specifying (i) the
amount and Type of Loans to be borrowed, (ii) the requested Borrowing Date and
(iii) in the case of Eurodollar Loans, the respective amounts of each such Type
of Loan and the respective lengths of the initial Interest Period therefor. Each
borrowing under the Commitments shall be in an amount equal to (x) in the case
of Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if the then
aggregate Available Commitments are less than $1,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. Upon receipt of any such notice from the Borrower,
the Administrative Agent shall promptly notify each Lender thereof. Each Lender
will make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
2.3 Fees, etc. (a) The Borrower agrees to pay to the
Arranger on the Revolving Credit Termination Date a fee in an amount equal to
0.50% of each Lender's average daily Commitment, regardless of usage, in effect
on such date.
(b) The Borrower agrees to pay to the Administrative
Agent on August 29, 2003 a fee in an amount equal to 0.50% of the greater of the
Total Loans outstanding on such date and the Total Commitments in effect on such
date.
2.4 Termination or Reduction of Commitments. The Borrower
shall have the right, upon not less than two Business Days' notice to the
Administrative Agent, to terminate the Commitments or, from time to time, to
reduce the amount of the Commitments; provided that no such termination or
reduction of Commitments shall be permitted if, after giving effect thereto and
to any prepayments of the Loans made on the effective date thereof, the Total
Loans would exceed the Total Commitments. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Commitments then in effect.
2.5 Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the principal amount of each Loan of such Lender as
may be outstanding on the Revolving Credit Termination Date (or such earlier
date on which the Loans become due and payable pursuant to Section 7). The
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Loans from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in Section
2.10.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from the Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid
16
to such Lender from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 9.6(d), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Revolving Credit Note evidencing such Loan, the Type of such
Loan and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.5(c) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender (i) a promissory note of the Borrower evidencing the Revolving
Credit Loans of such Lender, substantially in the form of Exhibit F attached
hereto with appropriate insertions as to date and principal amount (a "Revolving
Credit Note").
2.6 Optional Prepayments. The Borrower may at any time
and from time to time prepay the Loans, in whole or in part, without premium or
penalty except as otherwise provided herein, upon irrevocable notice delivered
to the Administrative Agent at least three Business Days prior thereto in the
case of Eurodollar Loans and at least one Business Day prior thereto in the case
of Base Rate Loans, which notice shall specify the date and amount of such
prepayment, and whether such prepayment is of Eurodollar Loans or Base Rate
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.16. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid.
Partial prepayments of Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof.
2.7 Mandatory Prepayments. (a) If any Indebtedness shall
be incurred by the Borrower or any of its Subsidiaries (excluding any
Indebtedness incurred in accordance with Section 6.2 as in effect on the date of
this Agreement), then, on the date of such incurrence, the Commitments shall be
reduced by an amount equal to the amount of the Net Cash Proceeds of such
incurrence, and the Loans shall be prepaid to the extent, if any, that the
aggregate then outstanding principle amount thereof exceeds the Commitments as
so reduced. The provisions of the paragraph do not constitute a consent to the
incurrence of any Indebtedness not permitted by Section 6.2.
(b) If any Capital Stock shall be issued by the Borrower
(excluding any
17
Capital Stock issued to Resources and any capital contributions received by the
Borrower from Resources), then, on the date of such issuance, the Commitments
shall be reduced by an amount equal to 50% of the amount of the Net Cash
Proceeds of such issuance, and the Loans shall be prepaid to the extent, if any,
that the aggregate then outstanding principle amount thereof exceeds the
Commitments as so reduced. The provisions of the paragraph do not constitute a
consent to any Change of Control.
(c) The application of any prepayment pursuant to this
Section 2.7 shall be made, first, to Base Rate Loans and, second, to Eurodollar
Loans. Each prepayment of the Loans under this Section 2.7 shall be accompanied
by accrued interest to the date of such prepayment on the amount prepaid.
2.8 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to Base Rate Loans by
giving the Administrative Agent at least two Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may be made only on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent at least two Business Days' prior
irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no Base Rate Loan may be
converted into a Eurodollar Loan (i) when any Event of Default has occurred and
is continuing and the Administrative Agent has, or the Required Lenders have,
determined in its or their sole discretion not to permit such conversions or
(ii) after the date that is one month prior to the final scheduled maturity date
of the Loans. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) The Borrower may elect to continue any Eurodollar
Loan as such upon the expiration of the then current Interest Period with
respect thereto by giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that no Eurodollar Loan may be continued as such (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent has, or the Required Lenders have, determined in its or their sole
discretion not to permit such continuations or (ii) after the date that is one
month prior to the final scheduled maturity date of the Loans, and provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso, such Loans shall be converted automatically
to Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
2.9 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans and all selections of Interest Periods shall be in such amounts and be
made pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any
one time.
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2.10 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest for each day
on which it is outstanding at a rate per annum equal to the Base Rate in effect
for such day plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of
any Loan shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all outstanding Loans (whether or not overdue) shall
bear interest (to the extent legally permitted) at a rate per annum that is
equal to the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this Section plus 2% and (ii) if all or a portion of any
interest payable on any Loan or any fee or other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to
the rate then applicable to Base Rate Loans plus 2%, in each case, with respect
to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.11 Computation of Interest and Fees. (a) Interest and
fees payable pursuant hereto shall be calculated on the basis of a 360-day year
for the actual days elapsed, except that, with respect to Base Rate Loans on
which interest is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.10(a).
2.12 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar
19
Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice
from the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly reflect the
cost to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right to convert
Loans to Eurodollar Loans.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing
by the Borrower from the Lenders hereunder and any reduction of the Commitments
of the Lenders shall be made pro rata according to the respective Loan
Percentages of the Lenders.
(b) Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Loans shall be made pro
rata according to the respective outstanding principal amounts of the Loans then
held by the Lenders.
(c) All payments (including prepayments) to be made by
the Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 12:00 Noon, New York City time, on any Business Day shall be deemed to
have been on the next following Business Day. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(d) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such Lender
is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a
20
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans, on demand, from the Borrower.
(e) Unless the Administrative Agent shall have been
notified in writing by the Borrower prior to the date of any payment due to be
made by the Borrower hereunder that the Borrower will not make such payment to
the Administrative Agent, the Administrative Agent may assume that the Borrower
is making such payment, and the Administrative Agent may, but shall not be
required to, in reliance upon such assumption, make available to the Lenders
their respective pro rata shares of a corresponding amount. If such payment is
not made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.14 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to this
Agreement or any Eurodollar Loan made by it,
or change the basis of taxation of payments
to such Lender in respect thereof (except
for Non-Excluded Taxes covered by Section
2.15 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or
similar requirement against assets held by,
deposits or other liabilities in or for the
account of, advances, loans or other
extensions of credit by, or any other
acquisition of funds by, any office of such
Lender that is not otherwise included in the
determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender reasonably deems to be material, of making,
converting into, continuing or
21
maintaining Eurodollar Loans, or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this Section, it
shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount reasonably deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a written
request therefor, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such corporation for such
reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.15 Taxes. (a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent's or such
Lender's having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or any Other Taxes are required to be
withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement; provided, however, that the Borrower shall
not be required to increase any such amounts payable to any Lender with respect
to any Non-Excluded Taxes (i) that are attributable to such Lender's failure to
comply with the requirements of paragraph (d) or (e) of this Section or (ii)
that are United
22
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph (a).
(b) In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for the account of the relevant Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement substantially in the form of
Exhibit G and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
23
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
2.16 Indemnity. The Borrower agrees to indemnify each
Lender for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans after
the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
Eurodollar market. A certificate as to any amounts payable pursuant to this
Section submitted to the Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2.17 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 2.16.
2.18 Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.14,
2.15(a) or 2.17 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and
24
its lending office(s) to suffer no economic, legal or regulatory disadvantage,
and provided, further, that nothing in this Section shall affect or postpone any
of the obligations of any Borrower or the rights of any Lender pursuant to
Section 2.14, 2.15(a) or 2.17.
2.19 Replacement of Lenders under Certain Circumstances.
The Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.14 or 2.15 or gives a
notice of illegality pursuant to Section 2.17 or (b) defaults in its obligation
to make Loans hereunder, with a replacement financial institution; provided that
(i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall have taken
no action under Section 2.18 so as to eliminate the continued need for payment
of amounts owing pursuant to Section 2.14 or 2.15 or to eliminate the illegality
referred to in such notice of illegality given pursuant to Section 2.17, (iv)
the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.16 (as though Section 2.16 were applicable) if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 9.6 (provided that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein), (viii) the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.14 or 2.15, as the case may be, in respect of any
period prior to the date on which such replacement shall be consummated, and
(ix) any such replacement shall not be deemed to be a waiver of any rights that
the Borrower, the Administrative Agent or any other Lender shall have against
the replaced Lender.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:
3.1 Financial Condition. (a) The audited consolidated
balance sheets of the Borrower as at December 31, 2001 and December 31, 2002 and
the related consolidated statements of income and of cash flows for the fiscal
years ended on such dates, reported on by and accompanied by an unqualified
report from Deloitte & Touche LLP, present fairly the consolidated financial
condition of the Borrower as at such dates, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended. The unaudited consolidated balance sheet of the Borrower as at March 31,
2003, and the related unaudited consolidated statements of income and cash flows
for the 3-month period ended on such date, present fairly the consolidated
financial condition of the Borrower as at such date, and the consolidated
results of its operations and its consolidated cash flows for the 3-month period
then ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein). The Borrower and its Subsidiaries do not have any
25
material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from December 31, 2002 to and including the date hereof there
has been no Disposition by the Borrower or any of its Subsidiaries of any
material part of its business or Property.
3.2 No Change. Since December 31, 2002, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect, except as set forth on Schedule 3.2.
3.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable
Obligations. The Borrower has the corporate power and authority, and the legal
right, to make, deliver and perform the Loan Documents and to borrow hereunder.
The Borrower has taken all necessary corporate action to authorize the
execution, delivery and performance of the Loan Documents and to authorize the
borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents, except
consents, authorizations, filings and notices described in Schedule 3.4, which
consents, authorizations, filings and notices have been obtained or made and are
in full force and effect. Each Loan Document has been duly executed and
delivered on behalf of the Borrower. This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.5 No Legal Bar. The execution, delivery and
performance of this Agreement and the other Loan Documents, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any Contractual Obligation of the Borrower or any of its Subsidiaries
and will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of
Law or any such Contractual Obligation (other than the Liens created by the
Security Documents). No Requirement of Law or Contractual Obligation applicable
to the Borrower or any of its
26
Subsidiaries could reasonably be expected to have a Material Adverse Effect.
3.6 No Material Litigation. No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Borrower, threatened by or against the Borrower or
any of its Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect, except as set forth on Schedule 3.6.
3.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect, except as set forth on Schedule 3.7. No Default or Event of
Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower
and its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other Property, and none of such Property is subject to any Lien except
as permitted by Section 6.3.
3.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Borrower know of any valid basis for any such claim. The
use of Intellectual Property by the Borrower and its Subsidiaries does not
infringe on the rights of any Person in any material respect.
3.10 Taxes. Each of the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its Property and all other taxes, fees or other charges imposed on it or
any of its Property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or its Subsidiaries, as the case may be);
and no tax Lien has been filed, and, to the knowledge of the Borrower, no claim
is being asserted, with respect to any such tax, fee or other charge.
3.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
3.12 Government Approval and Filings. The Public Utilities
Commission of Nevada has duly and validly issued an order authorizing the
Borrower to enter into this
27
Agreement and the other Loan Documents and to take all actions contemplated
hereby or thereby or in connection herewith or therewith, and such order remains
in full force and effect in the form issued. No other authorization, approval,
order, decree, ruling or other action by, or notice to or filing with, any
Governmental Authority is required for the due execution, delivery and
performance by the Borrower of this Agreement or any of the other Loan
Documents.
3.13 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Requirement
of Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect if not paid have been paid or accrued
as a liability on the books of the Borrower or the relevant Subsidiary.
3.14 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
3.15 Investment Company Act; Other Regulations. The
Borrower is not an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not subject to regulation under any Requirement of
Law (other than Regulation X of the Board) which limits its ability to incur
Indebtedness (other than public utility laws and regulations of Nevada
administered by the Public Utilities Commission of Nevada.
3.16 Subsidiaries. (a) The Subsidiaries listed on Schedule
3.16 constitute all the Subsidiaries of the Borrower at the date hereof.
Schedule 3.16 sets forth as of the Closing Date the name and jurisdiction of
incorporation of each Subsidiary and, as to each Subsidiary, the percentage of
each class of Capital Stock owned by the Borrower.
28
(b) There are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments of any nature
relating to any Capital Stock of the Borrower or any Subsidiary.
3.17 Use of Proceeds. The proceeds of the Loans shall be
used for general corporate purposes.
3.18 Environmental Matters. Other than exceptions to any
of the following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) The Borrower and its Subsidiaries: (i) are, and
within the period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; (ii) hold all Environmental
Permits (each of which is in full force and effect) required for any of their
current or intended operations or for any property owned, leased, or otherwise
operated by any of them; (iii) are, and within the period of all applicable
statutes of limitation have been, in compliance with all of their Environmental
Permits; and (iv) reasonably believe that: each of their Environmental Permits
will be timely renewed and complied with, without material expense; any
additional Environmental Permits that may be required of any of them will be
timely obtained and complied with, without material expense; and compliance with
any Environmental Law that is or is expected to become applicable to any of them
will be timely attained and maintained, without material expense.
(b) Materials of Environmental Concern are present at,
on, under, in, or about any real property now or formerly owned, leased or
operated by the Borrower or any of its Subsidiaries, or at any other location
(including, without limitation, any location to which Materials of Environmental
Concern have been sent for re-use or recycling or for treatment, storage, or
disposal) which could not reasonably be expected, individually or in the
aggregate, to (i) give rise to liability of the Borrower or any of its
Subsidiaries under any applicable Environmental Law or otherwise result in costs
to the Borrower or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect, or (ii) interfere with the Borrower's or any of
its Subsidiaries' continued operations, or (iii) materially adversely affect the
fair saleable value of any real property owned or leased by the Borrower or any
of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Borrower or any of its
Subsidiaries is, or to the knowledge of the Borrower or any of its Subsidiaries
will be, named as a party that is pending or, to the knowledge of the Borrower
or any of its Subsidiaries, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has
entered into or agreed
29
to any consent decree, order, or settlement or other agreement, or is subject to
any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum for dispute resolution, relating to
compliance with or liability under any Environmental Law.
(f) Neither the Borrower nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities of any
kind, fixed or contingent, known or unknown, under any Environmental Law or with
respect to any Material of Environmental Concern.
3.19 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished to the Administrative Agent or the
Lenders or any of them, by or on behalf of the Borrower for use in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, contained as of the date such statement, information, document or
certificate was so furnished, any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements contained
herein or therein not misleading. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. There is no fact known to the Borrower that could reasonably be
expected to have a Material Adverse Effect that has not been expressly disclosed
herein, in the other Loan Documents or in any other documents, certificates and
statements furnished to the Administrative Agent and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
3.20 Bond Delivery Agreement; G&R Series F Mortgage Bond.
(a) The Bond Delivery Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable security interest in any right, title and interest of the
Borrower in the G&R Series F Mortgage Bond and proceeds thereof, and, when
perfected by delivery of the G&R Series F Mortgage Bond to the Administrative
Agent for the benefit of the Lenders, the Lien granted pursuant to the Bond
Delivery Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest, if any, of the Borrower in such G&R
Series F Mortgage Bond and the proceeds thereof, as security for the
Obligations, in each case prior and superior in right to any other Person.
(b) The G&R Series F Mortgage Bond has been duly and
validly issued and is entitled to the security and benefits of the General and
Refunding Mortgage Indenture; is secured equally and ratably with, and only
with, all other securities issued and outstanding under the General and
Refunding Mortgage Indenture; is secured by direct and valid, duly perfected
Liens on and security interests in the Mortgaged Property (as defined in the
General and Refunding Mortgage Indenture), subject only to the prior Lien of the
First Mortgage Indenture and to Permitted Liens (as such term is defined in the
General and Refunding Mortgage Indenture); and constitutes collateral security
for the obligations of the Borrower as purported to be provided in
30
the General and Refunding Mortgage Indenture and herein.
3.21 Solvency. The Borrower is, and after giving effect to
the incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith will be and will continue to be, Solvent.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of each
Lender to make the initial Loan requested to be made by it hereunder is subject
to the satisfaction, prior to or concurrently with the making of such Loan on
the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized officer
of the Borrower and each Person on Schedule 2.1 and (ii) the Bond Delivery
Agreement, executed and delivered by a duly authorized officer of the Borrower.
(b) Approvals. All governmental and third party approvals
(including, without limitation, any required approvals of the Public Utilities
Commission of Nevada and any relevant Federal regulatory bodies) necessary in
connection with the transactions contemplated herein, the issuance and pledging
of the G&R Series F Mortgage Bond and the continuing operations of the Borrower
and its Subsidiaries shall have been obtained and be in full force and effect;
and the Administrative Agent shall have received evidence satisfactory to it
that the foregoing have been accomplished.
(c) Related Agreements. The Administrative Agent shall
have received (in a form reasonably satisfactory to the Administrative Agent),
true and correct copies, certified as to authenticity by the Borrower, such
documents or instruments as may be reasonably requested by the Administrative
Agent, including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which the Borrower may be a party.
(d) Fees. The Lenders, the Administrative Agent and the
Arranger shall have received all fees required to be paid, and all expenses for
which invoices have been presented (including reasonable fees, disbursements and
other charges of counsel to the Administrative Agent), on or before the Closing
Date. All such amounts will be paid with proceeds of Loans made on the Closing
Date and will be reflected in the funding instructions given by the Borrower to
the Administrative Agent on or before the Closing Date.
(e) Closing Certificate. The Administrative Agent shall
have received a certificate of the Borrower, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
(f) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Choate, Hall & Stewart,
special counsel to the Borrower and its
Subsidiaries, substantially in the form of
Exhibit
31
E-1; and
(ii) the legal opinion of Woodburn and Wedge,
Nevada counsel to the Borrower and its
Subsidiaries, substantially in the form of
Exhibit E-2;
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(g) G&R Series F Mortgage Bond Documents. The
Administrative Agent shall have received copies of the following documents (all
as defined in the General and Refunding Mortgage Indenture): either a
supplemental indenture or an "Officer's Certificate" setting forth the terms of
the G&R Series F Mortgage Bond; a "Company Order" requesting authentication of
the G&R Series F Mortgage Bond by the trustee under the General and Refunding
Mortgage Indenture; and all legal opinions provided in connection with the
issuance of the G&R Series F Mortgage Bond. The G&R Series F Mortgage Bond shall
have been duly issued and delivered to the Administrative Agent.
4.2 Conditions to Each Loan. The agreement of each Lender
to make any Loan requested to be made by it on any date (including, without
limitation, the initial Loan) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower in or pursuant to the Loan
Documents shall be true and correct on and as of the date of such Loans as if
made on such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on the date of such Loans or after giving effect to
the Loans requested to be made on such date.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such extension of credit that the
conditions contained in Section 4.2(a) and (b) have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitment is
in effect or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, the Borrower shall and shall cause each of its
Subsidiaries to:
5.1 Financial Statements. Furnish to the Administrative
Agent as soon as available, but in any event not later than 45 days after the
end of the quarter ending June 30, 2003, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the figures as of
the end of and for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments) (it being understood
32
that the delivery of the Form 10-Q for the relevant quarter shall satisfy the
delivery requirement with respect to the financial statements in this Section
5.1); all such financial statements shall be complete and correct in all
material respects and shall be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the case
may be, and disclosed therein).
5.2 Certificates; Other Information. Furnish to the
Administrative Agent and each Lender, or, in the case of clause (e), to the
relevant Lender:
(a) concurrently with the delivery of any financial
statements pursuant to Section 5.1, (i) a certificate of a Responsible Officer
stating that, to the best of such Responsible Officer's knowledge, the Borrower
and each of its Subsidiaries during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition, contained in
this Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as specified in
such certificate and (ii) a Compliance Certificate containing all information
and calculations necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein as of the
last day of the applicable fiscal quarter of the Borrower;
(b) within 45 days after the end of the quarter ending
June 30, 2003, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such fiscal
quarter and for the period from the beginning of the then current fiscal year to
the end of such fiscal quarter, as compared to the portion of the projections
covering such periods and to the comparable periods of the previous year (it
being understood that the delivery of the management's discussion and analysis
sections of the Form 10-Q containing the financial statements delivered pursuant
to Section 5.1 shall satisfy the requirement in this Section 5.2(b));
(c) within five days after the same are sent, copies of
all financial statements and reports that the Borrower sends to the holders of
any class of its debt securities or public equity securities and, within five
days after the same are filed, copies of all financial statements and reports
that the Borrower may make to, or file with, the SEC;
(d) promptly after obtaining knowledge thereof: (i) any
development, event, or condition that, individually or in the aggregate with
other developments, events or conditions, could reasonably be expected to result
in the payment by the Borrower and its Subsidiaries, in the aggregate, of a
Material Environmental Amount; and (ii) any notice that any governmental
authority may deny any application for an Environmental Permit sought by, or
revoke or refuse to renew any Environmental Permit held by, the Borrower, which
could reasonably be expected to have a Material Adverse Effect; and
(e) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before
33
maturity or before they become delinquent, as the case may be, all its material
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence,
etc. (a) (i) Preserve, renew and keep in full force and effect its corporate
existence and (ii) take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 6.4 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations and Requirements of Law, except (x) to the extent
that failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (y) as described on Schedule 3.7.
5.5 Maintenance of Property; Insurance. (a) Keep all
Property and systems useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
5.6 Inspection of Property; Books and Records;
Discussions. (a) Keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and activities
and (b) permit representatives of any Lender (at such Lender's expenses, except
during the continuation of an Event of Default) to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
5.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, that in
either case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower
or any of its Subsidiaries in which the amount involved is $5,000,000 or more
and not covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable
34
Event with respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any Multiemployer
Plan or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and
(e) any development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to take
with respect thereto.
5.8 Environmental Laws. (a) Comply in all material
respects with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
5.9 Refinancing Securities. (a) Prepare as soon as
practicable a registration statement under the Securities Act of 1933, as
amended or an offering memorandum covering debt instruments of the Borrower (the
"Refinancing Securities") to be issued in a public offering or private placement
(the "Offering") and (b) consummate such Offering in an amount at least equal to
the Total Commitments then in effect and on such terms and conditions (including
interest rate, yield, redemption prices and dates) as the Arranger, after
consultation and good faith negotiation with the Borrower, may in its
commercially reasonable judgment determine to be reasonable for the Borrower in
light of prevailing circumstances and market conditions and the financial
condition and prospects of the Borrower. The indenture, board resolution,
officer's certificate or other document or instrument establishing the
Refinancing Securities shall be in a form containing terms and conditions
customary and appropriate for securities of the same type as the Refinancing
Securities, modified as appropriate to reflect the financial condition and
prospects of the Borrower and its Subsidiaries, and in form and substance
reasonably satisfactory to the Borrower and the Arranger.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitment is
in effect or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
6.1 Consolidated Total Debt Ratio. Permit the
Consolidated Total Debt Ratio
35
on any date to exceed .65 to 1.00.
6.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower pursuant to any Loan
Document or pursuant to the G&R Series F Mortgage Bond;
(b) Indebtedness of the Borrower (i) to any Subsidiary or
(ii) to its Affiliates; provided, however, that in the case of clause (ii), the
aggregate principal amount of such Indebtedness shall not exceed $10,000,000 at
any one time outstanding;
(c) Indebtedness (including, without limitation, Capital
Lease Obligations) secured by Liens permitted by Section 6.3(g) in an aggregate
principal amount not to exceed $10,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and
listed on Schedule 6.2(d) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount thereof or any
shortening of the maturity of any principal amount thereof);
(e) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of the
Borrower;
(f) Indebtedness consisting of letters of credit issued
for the Borrower's account for purposes of supporting the Borrower's obligations
now or hereafter owing to gas, electric power or other energy suppliers in an
aggregate principal amount not to exceed $20,000,000 at any one time
outstanding;
(g) Indebtedness consisting of securities issued pursuant
to the General and Refunding Mortgage Indenture that are pledged to secure (i)
claims against the Borrower relating to the Borrower's obligations existing on
the Closing Date pursuant to terminated agreements with gas, electric power and
other energy suppliers (such securities issued pursuant to this clause (i) to be
in an aggregate principal amount not to exceed $200,000,000 at any one time
outstanding), (ii) the Borrower's obligations in respect of letters of credit
permitted pursuant to Section 6.2(f) (such securities issued pursuant to this
clause (ii) to be in an aggregate principal amount not to exceed $20,000,000 at
any time outstanding) and (iii) obligations of the Borrower and its Subsidiaries
in connection with the Receivables Sale Transaction (such securities issued
pursuant to this clause (iii) to be in an aggregate principal amount not
exceeding $125,000,000); and
(h) Subordinated notes issued by a Subsidiary to the
Borrower in connection with the Receivables Sale Transaction.
6.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on
36
the books of the Borrower or its Subsidiaries, as the case may be, in conformity
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or that are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(f) Liens in existence on the date hereof listed on
Schedule 6.3(f), securing Indebtedness permitted by Section 6.2(d), provided
that no such Lien is spread to cover any additional Property after the Closing
Date and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any
other Subsidiary incurred pursuant to Section 6.2(c) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other than the
Property financed by such Indebtedness, (iii) the amount of Indebtedness secured
thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease
entered into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased;
(j) Liens of (i) the First Mortgage Indenture securing
Indebtedness outstanding on the Closing Date and (ii) the General and Refunding
Mortgage Indenture;
(k) Liens on First Mortgage Bonds issued as collateral
for pollution control or gas or water facility revenue bonds issued for the
benefit of the Borrower or its Subsidiaries (and related rights and interests)
to secure obligations of the Borrower or such Subsidiaries for the benefit of
the holders of such bonds, provided that such bonds are not secured by any other
assets or Properties of the Borrower or its Subsidiaries;
(l) Liens on securities issued under the General and
Refunding Mortgage Indenture and permitted by Section 6.2(g) securing the
obligations described in Section 6.2(g);
37
(m) Liens created pursuant to the Receivables Sale
Documentation; or
(n) Liens not otherwise permitted by this Section 6.3 so
long as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined, in the case of each such Lien, as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Borrower and all
Subsidiaries) $10,000,000 at any one time.
6.4 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to the Borrower.
6.5 Limitation on Disposition of Property. Dispose of any
of its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in
the ordinary course of business;
(b) the sale of inventory in the ordinary course of
business;
(c) the sale or issuance of any Subsidiary's Capital
Stock to the Borrower;
(d) the Disposition of assets pursuant to the Receivables
Sale Transaction;
(e) the Disposition of other assets having a fair market
value not to exceed $1,000,000 in the aggregate for any fiscal year of the
Borrower; and
(f) the Disposition of certain parcels of land listed on
Schedule 6.5.
6.6 Limitation on Restricted Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of Resources, the Borrower
or any Subsidiary, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary (collectively,
"Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower; and
(b) the Borrower may make payments in respect of trust
preferred securities
38
of the Borrower's Subsidiaries in existence on the Closing Date.
6.7 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence
of Indebtedness permitted by Section 6.2(b) and (e);
(d) loans and advances to employees of the Borrower or
any Subsidiaries of the Borrower in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in an
aggregate amount the Borrower and Subsidiaries of the Borrower not to exceed
$1,000,000 at any one time outstanding; and
(e) Investments by the Borrower in its Subsidiaries in an
aggregate amount (valued at cost) not to exceed $5,000,000 during the term of
this Agreement.
6.8 Modifications of Instruments, etc. Amend or modify
(a) its certificate of incorporation or (b) the General and Refunding Mortgage
Indenture or (c) the First Mortgage Indenture, in each case in any manner
determined by the Administrative Agent to be adverse to the Lenders.
6.9 Limitation on Transactions with Affiliates. Except as
provided in the last sentence of this Section, enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of
Property, the rendering of any service or the payment of any management,
advisory or similar fees, with any Affiliate (other than the Borrower) unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of business of the Borrower or such Subsidiary, as the case may
be, and (c) upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate. This Section 6.10
shall not apply to transactions between the Borrower and its Subsidiaries in
connection with the Receivables Sale Transaction.
6.10 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
6.11 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
39
6.12 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that (a) prohibits or limits
the ability of the Borrower or any of its Subsidiaries (other than the
Receivables Sale Transaction) to create, incur, assume or suffer to exist any
Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, to secure the Obligations, other than (i) this Agreement and the other
Loan Documents, (ii) any agreements governing any purchase money Liens or
Capital Lease Obligations otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the assets financed
thereby) and (iii) any restriction in effect on the date hereof or (b) contains
covenants more restrictive than the covenants in this Section 6, unless the
Borrower offers to amend this Agreement, concurrently with the effectiveness of
such other agreement, to provide covenants under this Agreement equivalent to
the more restrictive covenants under such other agreement.
6.13 Limitation on Restrictions on Subsidiary
Distributions. Other than the Receivables Sale Transaction, enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary to (a) make Restricted Payments in respect of any
Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the
Borrower or any other Subsidiary, (b) make Investments in the Borrower or any
other Subsidiary or (c) transfer any of its assets to the Borrower or any other
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents and (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement that
has been entered into in connection with the Disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary.
6.14 Limitation on Prepayments of and Modifications to
Subordinated Debt. (a) Optionally prepay, optionally retire, optionally redeem,
optionally purchase, optionally defease, optionally exchange, or make any
mandatory prepayment or any mandatory repurchase of any debt subordinated to the
prior payment of the Loans and the other obligations under the Loan Documents
("Subordinated Debt") or (b) amend, supplement or otherwise modify any
documentation governing any Subordinated Debt (other than (i) amendments to such
Subordinated Debt which reduce the interest rate or extend the maturity thereof
and (ii) waivers of compliance by the Borrower with any of the terms or
conditions of such Subordinated Debt (except those terms or conditions which by
their terms are for the benefit of the Lenders)).
6.15 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or that are reasonably related thereto.
6.16 Limitation on Amendments to Other Documents. Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the Receivables Sale Documentation in any manner that could
reasonably be expected to have a Material Adverse Effect.
6.17 Limitation on Hedge Agreements. Enter into any Hedge
Agreement other than Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes, to protect against changes in
interest rates, commodity prices (including energy prices) or foreign exchange
rates.
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6.18 Limitations on Release from Liens. Cause the Liens of
the General and Refunding Mortgage Indenture and related security documents,
upon any assets, to be released, except in connection with the Disposition of
such assets; provided that within 180 days after any such release, the Borrower
will either (a) Dispose of such assets or (b) subject such assets again to the
Lien of the General and Refunding Mortgage Indenture.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms hereof; or the Borrower shall fail to
pay any interest on any Loan, or any other amount payable hereunder or under any
other Loan Document, within five days after any such interest or other amount
becomes due in accordance with the terms hereof or thereof; or
(b) Any representation or warranty made or deemed made by
the Borrower herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made or furnished; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section 5.4(a),
Section 5.7(a), Section 5.9 or Section 6; or
(d) The Borrower shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days; or
(e) (i) The Borrower or any of its Subsidiaries shall (A)
default in making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto; or (B) default in making
any payment of any interest on any such Indebtedness beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness
was created; or (C) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or to become subject to a mandatory offer to
purchase by the obligor thereunder or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; or (ii) the Borrower or
any of its Subsidiaries shall, other than in respect of those Hedge Agreements
listed on Schedule 7(e)(ii) (A) default in making any payment of any amount
owing to a counterparty under any Hedge Agreement beyond the period of grace, if
any, provided in such Hedge Agreement; or (B) default in the observance or
performance of any other agreement or condition
41
relating to any such Hedge Agreement or contained in such Hedge Agreement or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the counterparty under such Hedge
Agreement to cause, with the giving of notice if required, the Borrower or such
Subsidiary to make a termination payment, payment of liquidated damages or
similar payment under such Hedge Agreement (collectively, "Payment Amounts");
provided, that a default, event or condition described in clause (i) or (ii) of
this paragraph (e) shall not at any time constitute an Event of Default unless,
at such time, one or more defaults, events or conditions of the type described
in clauses (i) and (ii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness and/ or Payment Amounts the outstanding
principal amount of which exceeds in the aggregate $20,000,000; or
(f) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against the Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of its Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of
the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders shall be likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such
42
event or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected to
have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving for the Borrower and
its Subsidiaries taken as a whole a liability (not paid or fully covered by
insurance as to which the relevant insurance company has acknowledged coverage)
of $10,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or
(i) Any of the Security Documents or the General and
Refunding Mortgage Indenture (or any security documents executed in connection
therewith) shall cease, for any reason to be in full force and effect, or the
Borrower or any Affiliate of the Borrower shall so assert, or any Lien created
by any of the Security Documents or the General and Refunding Mortgage Indenture
(or any security documents executed in connection therewith) shall cease to be
enforceable and of the same effect and priority purported to be created thereby;
or
(j) Any Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents shall
immediately become due and payable, and (B) if such event is any other Event of
Default, with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same shall immediately
become due and payable.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Lender
under this Agreement and the other Loan Documents, and each Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
8.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to
43
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
8.3 Exculpatory Provisions. Neither any Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
8.4 Reliance by the Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any instrument, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Revolving Credit Note as the owner thereof for all purposes unless such
Revolving Credit Note shall have been transferred in accordance with Section 9.6
and all actions required by such Section in connection with such transfer shall
have been taken. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, if so specified by this Agreement, all Lenders or any other instructing
group of Lenders specified by this Agreement) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
8.5 Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Administrative Agent shall have received notice
from a Lender or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent shall receive such a
notice, the
44
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or, if
so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
8.6 Non-Reliance on Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither any of the
Administrative Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of the Borrower or any affiliate of the Borrower, shall be
deemed to constitute any representation or warranty by any Agent to any Lender.
Each Lender represents to the Administrative Agent that it has, independently
and without reliance upon any Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Borrower and its affiliates and made
its own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon any
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower and its affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any affiliate of
the Borrower that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
8.7 Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), for, and to save each Agent
harmless from and against, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final
45
and nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.
8.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
8.9 Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 10 days' notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring Agent's
resignation as Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
8.10 The Arranger. The Arranger, in its capacity as such,
shall not have any duties or responsibilities, and shall incur no liability,
under this Agreement and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 9.1. The Required Lenders and the Borrower may, or (with the written
consent of the Required Lenders) the Administrative Agent and the Borrower may,
from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Borrower hereunder or
46
thereunder or (b) waive, on such terms and conditions as may be specified in the
instrument of waiver, any of the requirements of this Agreement or the other
Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall:
(i) forgive the principal amount or extend the
final scheduled date of maturity of any
Loan, extend the scheduled date of any
amortization payment in respect of any Loan,
reduce the stated rate of any interest or
fee payable hereunder or extend the
scheduled date of any payment thereof, or
increase the amount or extend the expiration
date of any Commitment of any Lender, in
each case without the consent of each Lender
directly affected thereby;
(ii) amend, modify or waive any provision of this
Section or reduce any percentage specified
in the definition of Required Lenders,
consent to the assignment or transfer by the
Borrower of any of its rights and
obligations under this Agreement and the
other Loan Documents or release the G&R
Series F Mortgage Bond, in whole or in part,
each case without the consent of all
Lenders;
(iii) amend, modify or waive any provision of
Section 8 or any other provision affecting
the rights of any Agent without the consent
of any Agent directly affected thereby; or
(iv) amend, modify or waive any provision of
Section 2.13 without the consent of each
Lender directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Borrower, the Lenders and the Administrative Agent shall
be restored to their former position and rights hereunder and under the other
Loan Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon. Any
such waiver, amendment, supplement or modification shall be effected by a
written instrument signed by the parties required to sign pursuant to the
foregoing provisions of this Section; provided, that delivery of an executed
signature page of any such instrument by facsimile transmission shall be
effective as delivery of a manually executed counterpart thereof. The
Administrative Agent, as holder of the G&R Series F Mortgage Bond, will not
consent to any amendment or other modification of the General and Refunding
Mortgage Indenture that requires the consent of holders of all securities issued
thereunder, without the consent of each Lender.
9.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrower and the Administrative
Agent,
47
as follows and (b) in the case of the Lenders, to its address as set forth in
the Register or, in the case of a Lender which becomes a party to this Agreement
pursuant to an Assignment and Acceptance, in such Assignment and Acceptance or
(c) in the case of any party, to such other address as such party may hereafter
notify to the other parties hereto:
The Borrower: Nevada Power Company
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Attention: Richard K. Atkinson
Telecopy: (702) 367-5869
Telephone: (702) 367-5630
The Administrative Agent: Merrill Lynch Capital Corporation
4 World Financial Center
New York, New York 10080
Attention:
Telecopy:
Telephone:
provided that any notice, request or demand to or upon the any Agent or any
Lender shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
9.5 Payment of Expenses. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all their reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement,
the G&R Series F Mortgage Bond, and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges of
counsel to the Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all their costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the G&R
Series F Mortgage Bond, the other Loan Documents and any other documents
prepared in connection herewith or therewith, including, without limitation, the
fees and disbursements of counsel (including the allocated fees and
disbursements
48
and other charges of in-house counsel) to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, or reimburse each Lender and the
Administrative Agent for, and hold each Lender and the Administrative Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, the G&R Series F Mortgage
Bond, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, the G&R Series F Mortgage Bond, the other Loan
Documents and any such other documents, and (d) to pay, indemnify or reimburse
each Lender, each Agent, their respective affiliates, and their respective
officers, directors, trustees, employees, advisors, agents and controlling
persons (each, an "Indemnitee") for, and hold each Indemnitee harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the G&R Series F Mortgage
Bond, the other Loan Documents and any such other documents, including, without
limitation, any of the foregoing relating to the use of proceeds of the Loans or
the violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower any of its Subsidiaries or any of
the Properties and the fees and disbursements and other charges of legal counsel
in connection with claims, actions or proceedings by any Indemnitee against the
Borrower hereunder (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee. No Indemnitee shall be
liable for any damages arising from the use by unauthorized persons of
Information or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by such persons or
for any special, indirect, consequential or punitive damages in connection with
this Agreement. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries so to
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee. All amounts due under this Section shall be payable not later than
30 days after written demand therefor. Statements payable by the Borrower
pursuant to this Section shall be submitted to Kelly Langley (Telephone No.
775-834-5643) (Fax No. 775-834-5462), at the address of the Borrower set forth
in Section 9.2, or to such other Person or address as may be hereafter
designated by the Borrower in a notice to the Administrative Agent. The
agreements in this Section shall survive repayment of the Loans and all other
amounts payable hereunder.
9.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Administrative Agent, all future holders of
the Loans and their respective successors and assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent and each Lender.
49
(b) Any Lender may, without the consent of the Borrower,
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to Section
9.1. The Borrower agrees that if amounts outstanding under this Agreement and
the Loans are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
9.7(a) as fully as if such Participant were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of Sections
2.14, 2.15 and 2.16 with respect to its participation in the Commitments and the
Loans outstanding from time to time as if such Participant were a Lender;
provided that, in the case of Section 2.15, such Participant shall have complied
with the requirements of said Section, and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof or, with the consent of the Administrative
Agent (which, in each case, shall not be unreasonably withheld or delayed), to
an additional bank, financial institution or other entity (an "Assignee") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit D, executed by
such Assignee and such Assignor (and, where the consent of the Administrative
Agent is required pursuant to the foregoing provisions, by the Administrative
Agent) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that no such assignment to an Assignee
(other than any Lender or any affiliate thereof or any Related Fund) shall be in
an aggregate principal amount of less than $1,000,000 (other than in the case of
an assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and
50
Acceptance, have the rights and obligations of a Lender hereunder with
Commitments and/or Loans as set forth therein, and (y) the Assignor thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and obligations under this
Agreement, such Assignor shall cease to be a party hereto, except as to Section
2.14, 2.15 and 9.5 in respect of the period prior to such effective date). For
purposes of the minimum assignment amounts set forth in this paragraph, multiple
assignments by two or more Related Funds shall be aggregated.
(d) The Administrative Agent shall, on behalf of the
Borrower, maintain at its address referred to in Section 9.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment of,
and principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Revolving Credit
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Revolving Credit Note,
shall be effective only upon appropriate entries with respect thereto being made
in the Register (and each Revolving Credit Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Revolving Credit
Note shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Revolving Credit Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Revolving Credit Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Revolving Credit Notes shall be
returned by the Administrative Agent to the Borrower marked "canceled". The
Register shall be available for inspection by the Borrower or any Lender (with
respect to any entry relating to such Lender's Loans) at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor and an Assignee (and, in any case where the consent of
any other Person is required by Section 9.6(c), by each such other Person)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (payable by the Assignor or Assignee, as agreed between
such parties) (treating multiple, simultaneous assignments by two or more
Related Funds as a single assignment) (except that no such registration and
processing fee shall be payable (y) in connection with an assignment by or to a
Merrill Lynch Entity or (z) in the case of an Assignee which is already a Lender
or is an affiliate or Related Fund of a Lender or a Person under common
management with a Lender), the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Borrower. On or prior to
such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the applicable
Revolving Credit Notes, of the assigning Lender) a new applicable Revolving
Credit Note to the order of such Assignee in an amount equal to the applicable
Loans, assumed or acquired by it pursuant to such Assignment and Acceptance and,
if the Assignor has retained a Loan, as the case may be, upon request, a new
Revolving Credit Note, to the order of the Assignor in an amount equal to the
applicable Loan, as the case may be, retained by it hereunder.
51
Such new Revolving Credit Note or Revolving Credit Notes shall be dated the
Closing Date and shall otherwise be in the form of the Revolving Credit Note or
Revolving Credit Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Revolving Credit Notes relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests in Loans and
Revolving Credit Notes, including, without limitation, any pledge or assignment
by a Lender of any Loan or Revolving Credit Note to any Federal Reserve Bank in
accordance with applicable law.
(g) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any state thereof. In
addition, notwithstanding anything to the contrary in this Section 9.6(g), any
SPC may (A) with notice to, but without the prior written consent of, the
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender, or with the prior written consent of the Borrower and the Administrative
Agent (which consent shall not be unreasonably withheld) to any financial
institutions providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans, and (B) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC; provided that non-public
information with respect to the Borrower may be disclosed only with the
Borrower's consent which will not be unreasonably withheld. This paragraph (g)
may not be amended without the written consent of any SPC with Loans outstanding
at the time of such proposed amendment.
9.7 Adjustments; Set-off. (a) If any Lender (a
"Benefitted Lender") shall at any time receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other
52
Lender's Obligations, such Benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Obligations, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to or
the Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon any amount becoming due and payable by
the Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
9.8 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.
9.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan
Documents represent the entire agreement of the Borrower, the Administrative
Agent, the Arranger and the Lenders with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by the Arranger, any Agent or any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
53
(a) submits for itself and its Property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
9.13 Acknowledgments. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, any Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Arranger, the Administrative Agent and the Lenders, on
one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Arranger, the Administrative Agent and the Lenders or among the
Borrower and the Lenders.
9.14 Confidentiality. Each of the Administrative Agent and
the Lenders agrees to keep confidential all non-public information provided to
it by the Borrower pursuant to this Agreement that is designated by the Borrower
as confidential; provided that nothing herein shall prevent any Agent or any
Lender from disclosing any such information (a) to the Arranger, any Agent, any
other Lender or any affiliate of any thereof, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee that agrees to comply with the
provisions of this Section or substantially equivalent provisions, (c) to any of
its employees, directors, Administrative Agent, attorneys, accountants and other
professional advisors, (d) to any financial institution that is a direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
54
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section), (e) upon the request or demand of any Governmental
Authority having jurisdiction over it, (f) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar proceeding,
(h) that has been publicly disclosed other than in breach of this Section, (i)
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender or (j) in connection with the exercise of any
remedy hereunder or under any other Loan Document. Notwithstanding anything
herein to the contrary, any party to this Agreement (and any employee,
representative, or other agent of any party to this Agreement) may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure. However, any such information
relating to the tax treatment or tax structure is required to be kept
confidential to the extent necessary to comply with any applicable federal or
state securities laws.
9.15 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Change had not occurred. "Accounting Change"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
9.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
NEVADA POWER COMPANY
By:
---------------------------------
Name:
Title:
MERRILL LYNCH CAPITAL
CORPORATION
By:
---------------------------------
Name:
Title:
SCHEDULE 2.1
COMMITMENTS
Lender Commitment
- ---------------------------------- -----------
Merrill Lynch Capital Corporation $60,000,000
-----------
-----------
TOTAL $60,000,000
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