Exhibit 10.3
===============================================================================
$100,000,000
TERM LOAN AGREEMENT
AMONG
SIERRA PACIFIC POWER COMPANY,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
▇▇▇▇▇▇ BROTHERS INC.,
AS ARRANGER
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS SYNDICATION AGENT
AND
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF OCTOBER 30, 2002
===============================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................... 1
1.1 Defined Terms............................................ 1
1.2 Other Definitional Provisions............................ 16
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................................. 16
2.1 Commitments.............................................. 16
2.2 Procedure for Borrowing.................................. 16
2.3 Repayment of Loans....................................... 17
2.4 Repayment of Loans; Evidence of Debt..................... 17
2.5 Fees, etc................................................ 18
2.6 Optional Prepayments..................................... 18
2.7 Mandatory Prepayments.................................... 18
2.8 Conversion and Continuation Options...................... 19
2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches 20
2.10 Interest Rates and Payment Dates......................... 20
2.11 Computation of Interest and Fees......................... 20
2.12 Inability to Determine Interest Rate..................... 21
2.13 Pro Rata Treatment and Payments.......................... 21
2.14 Requirements of Law...................................... 22
2.15 Taxes.................................................... 23
2.16 Indemnity................................................ 25
2.17 Illegality............................................... 25
2.18 Change of Lending Office................................. 26
SECTION 3. REPRESENTATIONS AND WARRANTIES.................................. 26
3.1 Financial Condition...................................... 26
3.2 No Change................................................ 27
3.3 Corporate Existence; Compliance with Law................. 27
3.4 Corporate Power; Authorization; Enforceable Obligations.. 28
3.5 No Legal Bar............................................. 28
3.6 No Material Litigation................................... 28
3.7 No Default............................................... 28
3.8 Ownership of Property; Liens............................. 28
3.9 Intellectual Property.................................... 28
3.10 Taxes.................................................... 29
3.11 Federal Regulations...................................... 29
3.12 Government Approval and Filings.......................... 29
3.13 Labor Matters............................................ 29
3.14 ERISA.................................................... 30
3.15 Investment Company Act; Other Regulations................ 30
3.16 Subsidiaries............................................. 30
3.17 Use of Proceeds.......................................... 30
3.18 Environmental Matters.................................... 30
3.19 Accuracy of Information, etc............................. 31
3.20 Bond Delivery Agreement; G&R Series C Mortgage Bond...... 32
i
Page
3.21 Solvency................................................. 32
SECTION 4. CONDITIONS PRECEDENT............................................ 32
4.1 Conditions to Loans...................................... 32
SECTION 5. AFFIRMATIVE COVENANTS........................................... 34
5.1 Financial Statements..................................... 34
5.2 Certificates; Other Information.......................... 35
5.3 Payment of Obligations................................... 36
5.4 Conduct of Business and Maintenance of Existence, etc.... 36
5.5 Maintenance of Property; Insurance....................... 37
5.6 Inspection of Property; Books and Records; Discussions... 37
5.7 Notices.................................................. 37
5.8 Environmental Laws....................................... 38
5.9 Termination of Existing Credit Agreement................. 38
SECTION 6. NEGATIVE COVENANTS.............................................. 38
6.1 Financial Condition Covenants............................ 38
6.2 Limitation on Indebtedness............................... 39
6.3 Limitation on Liens...................................... 40
6.4 Limitation on Fundamental Changes........................ 41
6.5 Limitation on Disposition of Property.................... 42
6.6 Limitation on Restricted Payments........................ 42
6.7 Limitation on Capital Expenditures....................... 43
6.8 Limitation on Investments................................ 43
6.9 Modifications of Instruments, etc........................ 44
6.10 Limitation on Transactions with Affiliates............... 44
6.11 Limitation on Sales and Leasebacks....................... 44
6.12 Limitation on Changes in Fiscal Periods.................. 44
6.13 Limitation on Negative Pledge Clauses.................... 44
6.14 Limitation on Restrictions on Subsidiary Distributions... 45
6.15 Limitation on Subordinated Debt.......................... 45
6.16 Limitation on Lines of Business.......................... 45
6.17 Limitation on Amendments to Other Documents.............. 45
6.18 Limitation on Hedge Agreements........................... 45
6.19 Limitations on Release from Liens........................ 45
SECTION 7. EVENTS OF DEFAULT............................................... 45
SECTION 8. THE AGENTS...................................................... 48
8.1 Appointment.............................................. 48
8.2 Delegation of Duties..................................... 48
8.3 Exculpatory Provisions................................... 48
8.4 Reliance by Agents....................................... 49
8.5 Notice of Default........................................ 49
8.6 Non-Reliance on Agents and Other Lenders................. 49
8.7 Indemnification.......................................... 50
8.8 Agent in Its Individual Capacity......................... 50
8.9 Successor Administrative Agent........................... 51
8.10 The Arranger; the Syndication Agent...................... 51
SECTION 9. MISCELLANEOUS................................................... 51
ii
Page
9.1 Amendments and Waivers................................... 51
9.2 Notices.................................................. 52
9.3 No Waiver; Cumulative Remedies........................... 53
9.4 Survival of Representations and Warranties............... 53
9.5 Payment of Expenses...................................... 53
9.6 Successors and Assigns; Participations and Assignments... 55
9.7 Adjustments; Set-off..................................... 58
9.8 Counterparts............................................. 58
9.9 Severability............................................. 58
9.10 Integration.............................................. 58
9.11 GOVERNING LAW............................................ 59
9.12 Submission To Jurisdiction; Waivers...................... 59
9.13 Acknowledgments.......................................... 59
9.14 Confidentiality.......................................... 60
9.15 [Reserved]............................................... 60
9.16 Accounting Changes....................................... 60
9.17 Delivery of Lender Addenda............................... 60
9.18 WAIVERS OF JURY TRIAL.................................... 60
iii
SCHEDULES:
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 ▇▇▇▇▇▇, Hall & ▇▇▇▇▇▇▇
E-2 Form of Legal Opinion of ▇▇▇▇▇▇▇▇ & Wedge
F Form of Term Note
G Form of Exemption Certificate
H Form of Lender Addendum
I Form of Borrowing Notice
TERM LOAN AGREEMENT, dated as of October 30, 2002, among
SIERRA PACIFIC 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"), ▇▇▇▇▇▇ BROTHERS INC., as advisor, sole lead
arranger and sole bookrunner (in such capacity, the "Arranger"), ▇▇▇▇▇▇
COMMERCIAL PAPER INC., as syndication agent (in such capacity, the "Syndication
Agent"), and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., 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 term loans on the terms set forth herein; and
WHEREAS, the Lenders are willing to make such term loans 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.
"Agents": the collective reference to the Syndication Agent
and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the amount of such Lender's
Commitment at such time and (b) thereafter, the aggregate principal amount of
such Lender's Loan outstanding at such time.
"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 Term Loan Agreement, as amended,
supplemented or otherwise modified from time to time.
2
"Applicable Margin": (a) with respect to Base Rate Loans,
6.50%, and (b) with respect to Eurodollar Loans, 7.50%.
"Arranger": as defined in the preamble hereto.
"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).
"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.
"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.
3
"Calculation Period": as defined in Section 6.6(b).
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person.
"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 ▇▇▇▇▇'▇ 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
4
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 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 October 31, 2002.
"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 a Loan on the Closing Date to the Borrower pursuant to Section 2.1 in a
principal amount not to exceed the amount set forth under the heading
"Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender. The original aggregate amount of the Commitments is
$100,000,000.
"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.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated October 2002 and furnished to the initial Lenders
in connection with the syndication of the Term Loan Facility.
"Consolidated EBITDA": of any Person for any period,
Consolidated Net Income of such Person and its Subsidiaries for such period
plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) Consolidated Interest Expense of such Person and its
Subsidiaries, amortization or write-off of debt discount and debt issuance costs
and commissions, discounts and other fees and charges associated with
Indebtedness, (c) depreciation and amortization expense, (d) amortization of
intangibles (including, but not limited to, goodwill) and organization costs,
(e) any extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets outside of
the ordinary course of business) and (f) any other non-cash charges (excluding
Disallowed Deferred Energy Expenses), and minus, to
5
the extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income (except to the extent deducted in
determining Consolidated Interest Expense), (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of business)
and (c) any other non-cash income, all as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such
period to (b) Consolidated Interest Expense of the Borrower and its
Subsidiaries for such period.
"Consolidated Interest Expense": of any Person for any period,
total interest expense (including that attributable to Capital Lease
Obligations) of such Person and its Subsidiaries for such period with respect to
all outstanding Indebtedness of such Person and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges owed
by such Person with respect to letters of credit and bankers' acceptance
financing and net costs of such Person under Hedge Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar distributions
and (c) the undistributed earnings of any Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.
"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.
6
"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 requirement for the giving of notice, the lapse of time, or both,
has been satisfied.
"Disallowed Deferred Energy Expenses": energy expenses of the
Borrower disallowed pursuant to any order from the Public Utilities Commission
of Nevada and reflected as a non-cash charge for such disallowed expense in the
financial statements of the Borrower.
"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.
7
"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%):
Eurodollar Base Rate
---------------------------------
1.00 - Eurocurrency Reserve Requirements
Notwithstanding the rate determined by any calculation pursuant to the foregoing
formula, the Eurodollar Rate shall not be less than 3.00% at any time.
"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.
"Existing Credit Agreement": the Credit Agreement dated as of
November 30, 2001, as amended, among the Borrower, the lenders party thereto
from time to time, Union Bank of California, N.A. as the administrative agent
and the other agents party thereto.
"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 Reference
Lender 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 December 1, 1940, from the Borrower to State Street Bank and Trust Company
(successor to The New England Trust Company), as trustee, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(successor to ▇▇▇ ▇. ▇▇▇▇▇▇), as co-Trustee, as modified, amended or
supplemented at any time or from time to time by supplemental indentures.
8
"FQ1", "FQ2 ", "FQ3", and "FQ4": when used with a numerical
year designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower. (e.g., FQ4 2002 means the
fourth fiscal quarter of the Borrower's 2002 fiscal year, which ends December
31, 2002).
"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 C Mortgage Bond": the Borrower's General and
Refunding Mortgage Bond, Series C, due October 30, 2005, issued to the
Administrative Agent under the General and Refunding Mortgage Indenture, in the
aggregate principal amount of $100,000,000.
"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.
"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 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
9
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 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 ▇▇▇ 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 each January, April, July and October to occur while such Loan is
outstanding and the final maturity
10
date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of
three months or shorter, the last day of such Interest Period, (c) as to any
Eurodollar Loan having an Interest Period longer than three months, each day
that is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) 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, three or six 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, three or six 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.
"Investments": as defined in Section 7.8.
"▇▇▇▇▇▇ Entity": any of ▇▇▇▇▇▇ Commercial Paper Inc. or any
of its affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit H, to be executed and
delivered by such Lender on the Closing Date as provided in Section 9.17.
"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).
11
"Loan": as defined in Section 2.1.
"Loan Documents": this Agreement, the Bond Delivery Agreement
and the Term Notes.
"Loan Percentage": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Closing Date, the percentage which the
aggregate principal amount of such Lender's Loan then outstanding constitutes of
the aggregate principal amount of the Loans then outstanding).
"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 Agents 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.
"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 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.
12
"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.
"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 Date": as defined in Section 6.6(b).
"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.
"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.
"Pro Forma Balance Sheet": as defined in Section 3.1(a).
"Projections": as defined in Section 5.2(c).
"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.
13
"Receivables Sale Documentation": collectively, (i) the
Receivables Purchase Agreement, dated as of October 29, 2002, among Sierra
Pacific Power Company, as Seller, and SPPC Receivables Finance Corporation, (ii)
the Sale and Servicing Agreement, dated as of October 29, 2002, among SRP
Receivables Finance Corporation, as Issuer, SPPC Receivables Finance
Corporation, as Seller, and Sierra Pacific Power Company, as Servicer, (ii) 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 ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇ 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 Guarantee, 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, ▇▇▇▇▇
Fargo Bank, N.A., 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.
"Reference Lender": Deutsche Bank, New York Office.
"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.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection
14
therewith that are not applied to prepay the Loans pursuant to Section 2.7(b) as
a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale, Purchase Price Refund
or Recovery Event in respect of which the Borrower has delivered a Reinvestment
Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Default or Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the Net
Cash Proceeds of an Asset Sale, Purchase Price Refund or Recovery Event to
acquire assets, rebuild, replace or repair properties, or make capital
improvements useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
assets, or rebuild, replace or repair properties, useful in the Borrower's
business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire assets, or rebuild, replace
or repair properties, useful in the Borrower's business with all or any portion
of the relevant Reinvestment Deferred Amount.
"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 ▇▇▇.▇▇. 4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments and (b) thereafter, the sum of
the aggregate unpaid principal amount of the 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.
15
"Responsible Officer": the chief executive officer, president,
senior vice-president, vice-president, chief financial officer or 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.
"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.
"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.
"Term Loan Facility": the Commitments and the Loans made
thereunder.
"Term Note": as defined in Section 2.4(e).
"Transferee": as defined in Section 9.15.
16
"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 Commitments. (a) Subject to the terms and conditions
hereof, the Lenders severally agree to make term loans (each, a "Loan") to the
Borrower on the Closing Date in an amount for each Lender not to exceed the
amount of the Commitment of such Lender. 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.
(b) The Loans shall be funded by each Lender to the Borrower
at a 3% discount; accordingly, the amount funded by each Lender to the Borrower
on the Closing Date shall be an amount equal to 97% of the stated principal
amount of such Loan.
2.2 Procedure for Borrowing. The Borrower shall deliver to the
Administrative Agent a Borrowing Notice (which Borrowing Notice must be received
by the Administrative Agent prior to 10:00 A.M., New York City time, one
Business Day prior to the anticipated Closing Date) requesting that the Lenders
make the Loans on the Closing Date. The Loans made on the Closing Date shall
initially be Base Rate Loans, and no Loan may be
17
converted into or continued as a Eurodollar Loan having an Interest Period in
excess of one month prior to the date which is 5 days after the Closing Date.
Upon receipt of such Borrowing Notice the Administrative Agent shall promptly
notify each Lender thereof. Not later than 12:00 Noon, New York City time, on
the Closing Date each Lender shall make available to the Administrative Agent at
the Funding Office an amount in immediately available funds equal to the Loan or
Loans to be made by such Lender. The Administrative Agent shall make available
to the Borrower the aggregate of the amounts made available to the
Administrative Agent by the Lenders, in like funds as received by the
Administrative Agent.
2.3 Repayment of Loans. The Loan of each Lender shall mature
in 12 consecutive quarterly installments, commencing on January 31, 2003, each
of which shall be in an amount equal to such Lender's Loan Percentage multiplied
by the amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
January 31, 2003, April 30, 2003, July 31,
2003, October 31, 2003,
January 31, 2004, April 30, 2004, July 31, 2004
and October 31, 2004................................. $ 250,000
January 31, 2005, April 30, 2005, July 31, 2005
and October 31, 2005................................. $24,500,000
2.4 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 stated principal amount of the Loan of such Lender
(without any reduction in respect of the discount at which the Loans were funded
on the Closing Date) in installments according to the amortization schedule set
forth in Section 2.3 (or on 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 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 Term 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 2.4(b) shall, to the extent permitted by
applicable law, be prima
18
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 Loan 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 promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing the Loan of
such Lender, substantially in the form of Exhibit F (a "Term Note"), with
appropriate insertions as to date and principal amount; provided, that delivery
of Term Notes shall not be a condition precedent to the occurrence of the
Closing Date or the making of the Loans on the Closing Date.
2.5 Fees, etc. (a) The Borrower agrees to pay to the Arranger
the fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Arranger.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent.
(c) Each prepayment in respect of the Loans (whether optional
or mandatory) on or prior to the second anniversary of the Closing Date shall be
accompanied by payment to the Administrative Agent, for the ratable account of
the Lenders, of a prepayment premium equal to (i) if such prepayment is made
prior to the first anniversary of the Closing Date, 2% of the principal amount
of such prepayment and (ii) if such prepayment is made on or after the first
anniversary of the Closing Date and prior to the second anniversary of the
Closing Date, 1% of the principal amount of such prepayment.
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 Loans shall be prepaid by
an amount equal to the amount of the Net Cash Proceeds of such incurrence. The
provisions of the paragraph do not constitute a consent to the incurrence of any
Indebtedness not permitted by Section 6.2.
19
(b) If any Capital Stock shall be issued by the Borrower
(excluding any Capital Stock issued to Resources and any capital contributions
received by the Borrower from Resources), then, on the date of such issuance,
the Loans shall be prepaid by an amount equal to 50% of the amount of the Net
Cash Proceeds of such issuance. The provisions of the paragraph do not
constitute a consent to any Change of Control.
(c) If, on any date the Borrower or any of its Subsidiaries
shall receive Net Cash Proceeds from any Asset Sale or Recovery Event, then,
unless a Reinvestment Notice shall be delivered in respect thereof, on the date
of receipt by the Borrower or any of its Subsidiaries of such Net Cash Proceeds,
the Loans shall be prepaid by an amount equal to the amount of such Net Cash
Proceeds; provided, that, notwithstanding the foregoing, (i) the aggregate Net
Cash Proceeds of Asset Sales that may be excluded from the foregoing requirement
pursuant to a Reinvestment Notice shall not exceed $5,000,000 in any fiscal year
of the Borrower and (ii) on each Reinvestment Prepayment Date the Loans shall be
prepaid by an amount equal to the Reinvestment Prepayment Amount with respect to
the relevant Reinvestment Event. The provisions of this paragraph do not
constitute a consent to the consummation of any Disposition not permitted by
Section 6.5.
(d) 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 three 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
20
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.
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 in effect for such day.
(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 in effect for such day.
(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.
21
(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 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. The amount of each principal prepayment of the Loans shall be
applied to reduce the then remaining installments of the Loans pro rata based
upon the then remaining principal amount thereof. Amounts prepaid on account of
the Loans may not be reborrowed.
(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
22
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
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
23
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 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
24
income taxes) imposed on any Agent or any Lender as a result of a present or
former connection between such 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
such 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 any Agent or any
Lender hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such 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
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 Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
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
25
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
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
26
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 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 Agents and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
each Agent and each Lender that:
3.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at June 30, 2002 (including the notes
27
thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect (as if such events had
occurred on such date) to (i) the Loans to be made on the Closing Date and the
use of proceeds thereof and (ii) the payment of fees and expenses in connection
with the foregoing. The Pro Forma Balance Sheet has been prepared based on the
best information available to the Borrower as of the date of delivery thereof,
and presents fairly on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at June 30, 2002, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
(b) The audited consolidated balance sheets of the Borrower as
at December 31, 2000 and December 31, 2001 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 date, 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 June 30, 2002, and the related
unaudited consolidated statements of income and cash flows for the 6-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 6-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 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,
2001 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, 2001, except as disclosed in
the Borrower's Form 10-K for the fiscal year ended December 31, 2001 and Form
10-Q for the fiscal quarters ended March 31, 2002 and June 30, 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.
28
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 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
29
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 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.
The California Public Utilities Commission has issued an order, which remains in
full force and effect, exempting the Borrower from any requirement to obtain the
consent of the California Public Utilities Commission in connection with any
financing transaction or granting of a security interest. 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.
30
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 and the public utility laws and
regulations of California administered by the California Public Utilities
Commission (as to which the Borrower has received an exemptive order which
remains in full force and effect)).
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.
(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, except as disclosed on Schedule
3.16.
3.17 Use of Proceeds. The proceeds of the Loans shall be used
to refinance existing indebtedness of the Borrower.
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
31
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 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, the Confidential
Information Memorandum 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 (or, in the case of the
32
Confidential Information Memorandum, as of the date of this Agreement), 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, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Agents 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 C 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 C Mortgage Bond and proceeds thereof, and, when
perfected by delivery of the G&R Series C 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 C 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 C 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 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 Loans. The agreement of each Lender to make
the 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:
33
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized officer
of the Borrower, (ii) the Bond Delivery Agreement, executed and delivered by a
duly authorized officer of the Borrower and (iii) a Lender Addendum executed and
delivered by each Lender and accepted by the Borrower.
(b) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the Borrower for the 2000 and 2001 fiscal years and
(iii) unaudited interim consolidated financial statements of the Borrower for
each fiscal month and quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clause (ii) of this
paragraph as to which such financial statements are available; and such
financial statements shall not, in the reasonable judgment of the Lenders,
reflect any material adverse change in the consolidated financial condition of
the Borrower, as reflected in the financial statements or projections contained
in the Confidential Information Memorandum.
(c) Approvals. All governmental and third party approvals
(including, without limitation, any required approvals and/or exemptive orders
of the Public Utilities Commission of Nevada, the California Public Utilities
Commission and any relevant Federal regulatory bodies) necessary in connection
with the transactions contemplated herein, the issuance and pledging of the G&R
Series C 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.
(d) 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.
(e) 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 Agents), 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.
(f) Five-Year Projections. The Lenders shall have received
satisfactory five-year projections for fiscal years 2002-2006 and a satisfactory
written analysis of the business and prospects of the Borrower and its
Subsidiaries for the period from the Closing Date through the final maturity
date of the Loans.
(g) 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.
34
(h) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, special
counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit E-1; and
(ii) the legal opinion of ▇▇▇▇▇▇▇▇ & 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.
(i) G&R Series C 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 C
Mortgage Bond; a "Company Order" requesting authentication of the G&R Series C
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 C Mortgage Bond. The G&R Series C Mortgage Bond shall have been duly
issued and delivered to the Administrative Agent.
(j) 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 Closing Date as if made on and
as of the Closing Date.
(k) No Default. No Default or Event of Default shall have
occurred and be continuing on the Closing Date or after giving effect to the
Loans requested to be made on the Closing Date.
The borrowing of the Loans by the Borrower hereunder on the
Closing Date shall constitute a representation and warranty by the Borrower as
of the Closing Date that the conditions contained in Section 4.1(j) and (k) have
been satisfied. The Administrative Agent shall notify the Lenders promptly of
the occurrence of the Closing Date.
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 any Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Agent and each
Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such year and the related audited consolidated statements of
income and of cash flows for such year, setting forth in each case in
comparative
35
form the figures as of the end of and for the previous year, reported on without
a "going concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by Deloitte & Touche LLP or other independent
certified public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, 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);
all such financial statements to be complete and correct in
all material respects and to 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 each Agent and
each Lender, or, in the case of clause (f), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate (it being understood that
such certificate shall be limited to the items that independent certified public
accountants are permitted to cover in such certificates pursuant to their
professional standards and customs of the profession);
(b) 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) in the case of quarterly or annual financial statements, 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 fiscal quarter
or fiscal year of the Borrower, as the case may be;
(c) as soon as available, and in any event no later than 90
days after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the following fiscal
year, and the related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as available,
36
significant revisions, if any, of such budget and projections with respect to
such fiscal year (collectively, the "Projections"), which Projections shall in
each case be accompanied by a certificate of a Responsible Officer stating that
such Projections are based on reasonable estimates, information and assumptions
and that such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, 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 Forms 10-K and 10-Q containing the financial statements
delivered pursuant to Section 5.1(a) and (b) shall satisfy the requirement in
this Section 5.2(c));
(e) 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;
(f) 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
(g) 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 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 to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
37
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 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.
38
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 Termination of Existing Credit Agreement. Not later than
three days after the Closing Date, deliver evidence satisfactory to the
Administrative Agent that the Existing Credit Agreement shall have been
terminated, all amounts thereunder shall have been paid in full and all Liens
and security interests granted in connection therewith shall have been
terminated.
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 any Agent
hereunder, the Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Consolidated Total Debt Ratio. Permit the Consolidated
Total Debt Ratio on any date during any period set forth below to exceed the
ratio set forth below opposite such period:
Consolidated
Period Total Debt Ratio
------ ----------------
FQ4 2002; FQ1 2003;
FQ2 2003; FQ3 2003 and .650 to 1.0
FQ4 2003
FQ1 2004; FQ2 2004; .625 to 1.0
FQ3 2004 and FQ4 2004
FQ1 2005 and each fiscal .600 to 1.0
quarter thereafter
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to be
less than the ratio set forth below opposite such fiscal quarter:
39
Consolidated
Period Interest Coverage Ratio
------ -----------------------
FQ4 2002; FQ1 2003 1.75 to 1.0
FQ2 2003; FQ3 2003; 2.50 to 1.0
FQ4 2003
FQ1 2004; FQ2 2004; 2.75 to 1.0
FQ3 2004
FQ4 2004 and each fiscal 3.00 to 1.0
quarter thereafter
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 C Mortgage Bond;
(b) Indebtedness of the Borrower to any Subsidiary;
(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 $100,000,000 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), (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 $75,000,000) and (iv) the Indebtedness permitted by Section 6.2(i)
(such securities issued pursuant to this clause (iv) to be in an aggregate
principal amount not exceeding $80,000,000);
(h) Subordinated notes issued by a Subsidiary to the Borrower
in connection with the Receivables Sale Transaction;
40
(i) Any refinancing of the Borrower's obligations in respect
of the Washoe County Nevada Water Facilities Refunding Revenue Bonds (Sierra
Pacific Power Company Project) Series 2001 outstanding on the date hereof in an
aggregate principal amount of $80,000,000, provided that the maturity date of
any such refinancing shall not be earlier than October 30, 2006;
(j) Indebtedness pursuant to the Existing Credit Agreement or
consisting of securities issued pursuant to the General and Refunding Mortgage
Indenture that are pledged to secure Indebtedness pursuant to the Existing
Credit Agreement; provided that such Indebtedness shall be paid in full in
accordance with Section 5.9; and
(k) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $50,000,000 at any one time outstanding.
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 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
41
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 "transition property" arising pursuant to Section
843 of the California Public Utility Code for the benefit of holders of rate
reduction bonds issued pursuant to a valid financing order of the California
Public Utilities Commission;
(m) 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);
(n) Liens on securities issued under the General and Refunding
Mortgage Indenture and permitted by Section 6.2(j) securing the obligations
described in Section 6.2(j);
(o) Liens created pursuant to the Receivables Sale
Documentation; or
(p) 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.
42
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;
(f) the Disposition of certain parcels of land listed on
Schedule 6.5; and
(g) any Recovery Event, provided, that the requirements of
Section 2.7(c) are complied with in connection therewith.
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;
(b) so long as after giving effect to the making of such
Restricted Payment no Default or Event of Default would be continuing, the
Borrower may pay cash dividends to Resources on any date (a "Payment Date") in
an amount (the "Restricted Amount") not exceeding the sum of (i) the amount
payable by Resources on such Payment Date in respect of interest on Indebtedness
of Resources and in respect of payment obligations on account of Resources'
premium income equity securities and (ii) the amount of general and
administrative expenses of Resources (but not any Subsidiary of Resources)
payable on or within 30 days after such Payment Date; provided that the
Restricted Amount shall not exceed $90,000,000 in the aggregate for the first
twelve months following the Closing Date, $80,000,000 in the aggregate for the
second twelve months following the Closing Date and $60,000,000 in the aggregate
for the third twelve months following the Closing Date.
(c) so long as after giving effect to the making of such
Restricted Payment no Default or Event of Default would be continuing, the
Borrower may pay cash dividends to Resources on any Payment Date in an amount
which, when aggregated with the amount of cash dividends paid by the Borrower to
Resources from and after the Closing Date and prior to such Payment Date
(including dividends paid pursuant to Section 6.6(b) and Section 6.6(d)), does
not
43
exceed the sum of (i) 50% of cumulative Consolidated Net Income for the period
commencing with the fiscal quarter ending [September 30, 2002] and ending with
the fiscal quarter most recently ended prior to such Payment Date (such period,
"Calculation Period") plus (ii) the aggregate amount of cash received by the
Borrower from Resources as equity contributions in respect of common stock
during such Calculation Period; and
(d) so long as after giving effect to the making of such
Restricted Payment no Default or Event of Default would be continuing, the
Borrower may make Restricted Payments in an aggregate amount not to exceed
$10,000,000 during the term of this Agreement.
6.7 Limitation on Capital Expenditures. Make or commit to make
any Capital Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding the following
amounts in each of the following fiscal years:
Fiscal Year Amount
----------- ------
2002 $105,000,000
2003 $132,000,000
2004 and each fiscal year $115,000,000
thereafter
provided, that (i) up to 50% of any such amount referred to above, if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital Expenditures
made pursuant to this clause (a) during any fiscal year shall be deemed made,
first, in respect of amounts permitted for such fiscal year as provided above
and second, in respect of amounts carried over from the prior fiscal year
pursuant to subclause (i) above and (b) Capital Expenditures made with the
proceeds of any Reinvestment Deferred Amount.
6.8 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;
44
(e) Investments in assets useful in the Borrower's business
made by the Borrower or any of its Subsidiaries with the proceeds of any
Reinvestment Deferred Amount; and
(f) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost) not to exceed $5,000,000 during the term of
this Agreement.
6.9 Modifications of Instruments, etc. Amend or modify (a) its
certificate of incorporation (other than to reflect the redemption of the class
A preferred stock issued by the Borrower and the elimination of the covenants
directly related thereto) 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.
6.10 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.
6.11 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.
6.12 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.
6.13 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.
45
6.14 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.
6.15 Limitation on 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 Term 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)).
6.16 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.
6.17 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.
6.18 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.
6.19 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
46
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 or 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 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 $10,000,000; or
47
(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 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
48
(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 AGENTS
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes each 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 such 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, no Agent shall 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 any Agent.
8.2 Delegation of Duties. Each 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 such duties. No Agent shall 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
49
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agents 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 Agents 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 Agents. Each 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 such Agent. The Agents may deem and treat the payee of any
Term Note as the owner thereof for all purposes unless such Term 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. Each 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. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such 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 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 Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents 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
50
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 Agents 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 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.
51
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. The Syndication Agent may, at
any time, by notice to the Lenders and the Administrative Agent, resign as
Syndication Agent hereunder, whereupon the duties, rights, obligations and
responsibilities of the Syndication Agent hereunder shall automatically be
assumed by, and inure to the benefit of, the Administrative Agent, without any
further act by the Syndication Agent, the Administrative Agent or any Lender.
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 Syndication Agent. Neither the Arranger
nor the Syndication Agent, in their respective capacities as such, shall have no
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 Agents 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 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
52
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 C 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;
(iv) amend, modify or waive any provision of Section 2.13
without the consent of each Lender directly affected
thereby; or
(v) amend, modify or waive any provision of Section 9.6
without the consent of each Lender.
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 Agents and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Agents 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 C 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 Agents, as follows
and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or on Schedule I to the
Lender Addendum to which such Lender is a party or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment
53
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: Sierra Pacific Power Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
[Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇]
Telecopy: (775) 834-____
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Syndication Agent: ▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: __________________
Telecopy: ______________
Telephone: _______________
The Administrative Agent: ▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the syndication of the Term Loan Facility and the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the G&R Series C 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
54
and thereby, including, without limitation, the reasonable fees and
disbursements and other charges of counsel to the Administrative Agent and the
charges of Intralinks, (b) to pay or reimburse each Lender and the Agents for
all their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the G&R Series C 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 and other charges of
in-house counsel) to each Lender and of counsel to the Agents, (c) to pay,
indemnify, or reimburse each Lender and the Agents for, and hold each Lender and
the Agents 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 C Mortgage Bond, supplement or modification of, or any waiver or
consent under or in respect of, this Agreement, the G&R Series C 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 C
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 the Term Loan Facility. 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 ___________ (Telephone No._____________) (Fax No. ______________), 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
55
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 Agents, 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 Agents and each Lender.
(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 Agents 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
56
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 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 Term Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Term Note, shall be effective only
upon appropriate entries with respect thereto being made in the Register (and
each Term Note shall expressly so provide). Any assignment or transfer of all or
part of a Loan evidenced by a Term Note shall be registered on the Register only
upon surrender for registration of assignment or transfer of the Term Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Term Notes in the same aggregate principal amount
shall be issued to the designated Assignee, and the old Term 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 ▇▇▇▇▇▇ 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
57
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 Term Notes, of the
assigning Lender) a new applicable Term 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 Term Note, to the order of the Assignor in an amount
equal to the applicable Loan, as the case may be, retained by it hereunder. Such
new Term Note or Term Notes shall be dated the Closing Date and shall otherwise
be in the form of the Term Note or Term 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 Term Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests in Loans and Term Notes,
including, without limitation, any pledge or assignment by a Lender of any Loan
or Term 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
58
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 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 or of a Lender Addendum 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 Agents, the Arranger and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or
59
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:
(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 ▇▇▇ 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 Agents 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 Agents and the Lenders or among the Borrower and the
Lenders.
60
9.14 Confidentiality. Each of the Agents 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, agents, 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 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.
9.15 [Reserved].
9.16 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.
9.17 Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.
9.18 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS 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.
61
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.
SIERRA PACIFIC POWER COMPANY
By: __________________________
Name:
Title:
▇▇▇▇▇▇ BROTHERS INC.,
as Arranger
By: __________________________
Name:
Title:
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Syndication Agent
By: __________________________
Name:
Title:
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
By: __________________________
Name:
Title:
SCHEDULE 3.2
DISCLOSED MATTERS
None.
lxii
SCHEDULE 3.4
CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES
1. Order of the Public Utilities Commission of Nevada dated September 21, 2001,
Docket No. 01-6028.
2. Decision ▇▇-▇▇-▇▇▇ of the California Public Utilities Commission dated March
16, 2000.
lxiii
SCHEDULE 3.6
MATERIAL LITIGATION
1. In early May of ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Corporation, Enron Power Marketing, Inc. ("Enron"), ▇. ▇▇▇▇ & Company, National
Fuel Marketing Company, Nexen Marketing, Reliant Canada Incorporated, Reliant
Energy Services Incorporated and Retex, Inc. Reliant Energy Services, Inc. and
several smaller suppliers notified the Borrower that they would be terminating
their power and gas deliveries to the Borrower under the Western Systems Power
Pool Agreement ("WSPPA"). On September 30, 2002, El Paso Merchant Energy Group
notified the Borrower that it was terminating its power deliveries to the
Borrower under the WSPAA. Each of these terminating suppliers has asserted, or
has indicated that it will assert, a claim against the Borrower for liquidated
damages. See Schedule 3.7.
2. Enron Power Marketing, Inc. v. Nevada Power Company and Sierra
Pacific Power Company (In re Enron Corp., et al., Case No. 01-16034). On June 5,
2002, Enron filed suit against the Borrower in its bankruptcy case in the
Bankruptcy Court for the Southern District of New York asserting claims for
liquidated damages related to the termination of its power supply agreement with
the Borrower of $93.5 million. Enron's claim is subject to the Borrower's
defense that such claim is already at issue in the Borrower's Federal Energy
Regulatory Commission ("FERC") proceeding against Enron under Section 206 of the
Federal Power Act challenging the contract prices of the terminated power supply
agreement. In connection with the lawsuit filed by Enron in the Bankruptcy
Court, Enron has filed a motion to require the Borrower promptly to pay the full
amount of their claim pending the final resolution of the lawsuit.
3. Sierra Pacific Power Company v. Public Utilities Commission of
Nevada. On August 22, 2002, the Borrower filed a lawsuit in the First Judicial
District Court of the State of Nevada in and for ▇▇▇▇▇▇ City seeking judicial
review of the May 28, 2002 decision of the Public Utilities Commission of Nevada
(the "PUCN") denying the recovery of $53.1 million of the Borrower's deferred
energy costs incurred on behalf of its customers in 2001.
4. In September 1994, Region VII of the United States Environmental
Protection Agency ("the EPA") notified the Borrower that it was being named as a
potentially responsible party ("PRP") regarding past improper handling of
Polychlorinated Biphenyls by PCB Treatment, Inc., located in Kansas City, Kansas
and Kansas City, Missouri (the "Sites"). The EPA is requesting that the Borrower
voluntarily pay an undefined, pro rata share of the ultimate clean-up costs at
the Sites. A number of the largest PRP's formed a steering committee (the
"Committee"), which is chaired by the Borrower. The responsibility of the
Committee is to direct clean-up activities, determine appropriate cost
allocation, and pursue actions against recalcitrant parties, if necessary. The
EPA issued an administrative order on consent requiring signatories to perform
certain investigative work at the Sites. The Site evaluations have been
completed. The EPA is developing an allocation formula to allocate the
remediation costs. The Borrower has recorded a preliminary liability for the
Sites of $650,000 of which approximately $136,000 has been spent
lxiv
through June 30, 2002. Once evaluations are completed, the Borrower will be in a
better position to estimate and record the ultimate liabilities for the Sites.
lxv
SCHEDULE 3.7
CONTRACTUAL OBLIGATIONS
Each of the below-listed parties has exercised its respective contractual right
to terminate gas and/or electric deliveries to the Borrower under the Western
Systems Power Pool Agreement:
(1) Coral Energy Canada
(2) El Paso Merchant Energy Group
(3) Enron North America Corporation
(4) Enron Power Marketing, Inc.
(5) ▇. ▇▇▇▇ & Company
(6) National Fuel Marketing Company
(7) Nexen Marketing
(8) Reliant Canada Incorporated
(9) Reliant Energy Services Incorporated
(10) Retex, Inc.
lxvi
SCHEDULE 3.16
SUBSIDIARIES
STATES IN WHICH QUALIFIED
COMPANY STATE OF INCORPORATION AS A FOREIGN CORPORATION
------- ---------------------- -------------------------
SPPC Receivables Finance Delaware Nevada
Corporation
▇▇▇▇▇ Pine Company Nevada N/A
▇▇▇▇▇ Pine Investment Co. Nevada N/A
▇▇▇▇▇ Pine Investment Co. LLC Nevada N/A
Sierra Pacific Power Capital Delaware (business trust) N/A
Trust I
SPPC Funding LLC Delaware California, Nevada
GPSF-B Delaware N/A
Each of the Subsidiaries listed on this Schedule 3.16 are wholly-owned
subsidiaries of the Borrower.
lxvii
SCHEDULE 6.2(d)
EXISTING INDEBTEDNESS
A. TAX-EXEMPT ISSUES
Humboldt County, Nevada Variable Rate
Demand Pollution Control Refunding
Revenue Bonds (Sierra Pacific Power
Company Project) Series 1987.......................................................... $39,500,000
Washoe County, Nevada Variable Rate
Demand Gas Facilities
Revenue Bonds (Sierra Pacific Power
Company Project) Series 1987.......................................................... $17,500,000
Washoe County, Nevada Variable Rate
Demand Gas and Water Facilities
Refunding Revenue Bonds (Sierra Pacific
Power Company Project) Series 1987.................................................... $45,000,000
Humboldt County, Nevada
Pollution Control Refunding
Revenue Bonds (Sierra Pacific
Power Company Project) Series 1992A................................................... $10,250,000
Humboldt County, Nevada
Pollution Control Refunding
Revenue Bonds (Sierra Pacific
Power Company Project) Series 1992B................................................... $ 1,000,000
Washoe County, Nevada
Gas Facilities Revenue Bonds
(Sierra Pacific Power Company
Project) Series 1990.................................................................. $20,000,000
Washoe County, Nevada Variable Rate
Demand Water Facilities
Revenue Bonds (Sierra Pacific Power
Company Project) Series 1987.......................................................... $75,000,000
Washoe County, Nevada
Gas Facilities Revenue Bonds
(Sierra Pacific Power Company
Project) Series 1992.................................................................. $21,200,000
A. TAX-EXEMPT ISSUES
Washoe County, Nevada
Water Facilities Refunding
Revenue Bonds (Sierra Pacific
Power Company Project) Series 1993A................................................... $ 9,800,000
Washoe County, Nevada Gas and
Water Facilities Refunding
Revenue Bonds (Sierra Pacific
Power Company Project) Series 1993B................................................... $30,000,000
Washoe County, Nevada Water
Facilities Refunding Revenue
Bonds (Sierra Pacific Power
Company Project) Series 2001.......................................................... $80,000,000
B. MEDIUM-TERM NOTES
-----------------
6.95% Series A due 2022............................................................... $37,000,000
7.875% Series A due 2022.............................................................. $46,000,000
8.61% Series A due 2022............................................................... $27,000,000
7.10% Series B due 2023............................................................... $32,500,000
7.14% Series B due 2023............................................................... $25,500,000
6.81% Series C due 2006............................................................... $10,000,000
6.82% Series C due 2006............................................................... $ 5,000,000
6.83% Series C due 2006............................................................... $ 5,000,000
6.81% Series C due 2006............................................................... $10,000,000
6.65% Series C due 2006............................................................... $ 7,000,000
6.62% Series C due 2006............................................................... $13,000,000
5.59% Series D due 2003............................................................... $13,000,000
5.50% Series D due 2003............................................................... $ 5,000,000
C. ADDITIONAL INDEBTEDNESS OF BORROWER
A. On April 9, 1999, a subsidiary of Borrower (SPPC Funding LLC)
issued its 6.40% Notes, Series 1999-1 due 2009 to
California Industrial and Economic Development Bank Special
Purpose Trust SPPC-1, the outstanding balance of which as
of August 31, 2002 was $9,404,715. This Note is secured by
a security interest in certain Transition Property of
Borrower, to the extent that such Transition Property is
deemed not to have been transferred from Borrower to SPPC
Funding LLC.
B. 8% General and Refunding Mortgage Bonds, Series A, due June 1,
2008 in the aggregate principal amount of $320,000,000.
2
C. Credit Agreement dated as of November 30, 2001, among Sierra
Pacific Power Company, Union Bank of California, N.A., as
sole Bookrunner and Administrative Agent, ▇▇▇▇▇ Fargo
Bank, N.A., as Syndication Agent, Bank One, N.A., BNP
Paribas and Mellon Bank, N.A., as Co-Documentation Agents,
the Lenders party thereto from time to time, and Union
Bank of California, N.A. and ▇▇▇▇▇ Fargo Bank, N.A., as
Co-Lead Arrangers relating to $150 million credit
facility. The credit facility is secured by the
Borrower's General and Refunding Mortgage Bond, Series B,
due November 28, 2002, in the principal amount of $150
million.
D. Amendment No. 1 to the Credit Agreement dated as of November
30, 2001, among Sierra Pacific Power Company, Union Bank
of California, N.A., as sole Bookrunner and Administrative
Agent, ▇▇▇▇▇ Fargo Bank, N.A., as Syndication Agent, Bank
One, N.A., BNP Paribas and Mellon Bank, N.A., as
Co-Documentation Agents, the Lenders party thereto from
time to time, and Union Bank of California, N.A. and ▇▇▇▇▇
Fargo Bank, N.A., as Co-Lead Arrangers relating to $150
million credit facility, dated June 25, 2002.
E. Lease dated January 30, 1986 between the Borrower and
▇▇▇▇▇▇▇▇ Associates Limited Partnership relating to the
Borrower's corporate headquarters building.
F. Letter of Amendment dated May 18, 1987 to Lease dated
January 30, 1986 between the Borrower and ▇▇▇▇▇▇▇▇
Associates Limited Partnership relating to the Borrower's
corporate headquarters building.
3
SCHEDULE 6.3(f)
EXISTING LIENS
I. PLEDGED SECURITIES
A. TAX-EXEMPT ISSUES. The Borrower has entered into financing
agreements with Washoe County and Humboldt County, Nevada pursuant to which
those counties have issued tax-exempt bonds to fund various Borrower-sponsored
projects. The Borrower's obligations under each such financing agreement are
secured by First Mortgage Bonds issued under the Borrower's Indenture of
Mortgage dated as of December 1, 1940, as supplemented and amended (the "First
Mortgage Indenture") and pledged to the relevant tax-exempt bond trustee. The
First Mortgage Indenture imposes a lien on substantially all of Borrower's
property. In addition, the Counties have granted to the Trustee in each
transaction a security interest in Borrower's obligations to the County under
the relevant financing agreement. The following is a list of the tax-exempt
financings and the series of the Borrower's First Mortgage Bonds securing such
obligations:
FIRST MORTGAGE
TAX-EXEMPT ISSUE PRINCIPAL AMOUNT BOND SECURITY
---------------- ---------------- --------------
Humboldt County, Nevada Variable Rate $39,500,000 6.55% Series AA due 2013
Demand Pollution Control Refunding
Revenue Bonds (Sierra Pacific Power
Company Project) Series 1987
Washoe County, Nevada Variable Rate $17,500,000 6.65% Series BB due 2017
Demand Gas Facilities
Revenue Bonds (Sierra Pacific Power
Company Project) Series 1987
Washoe County, Nevada Variable Rate $45,000,000 6.30% Series DD due 2014
Demand Gas and Water Facilities
Refunding Revenue Bonds (Sierra Pacific
Power Company Project) Series 1987
Humboldt County, Nevada $10,250,000 6.30% Series EE due 2022
Pollution Control Refunding
Revenue Bonds (Sierra Pacific
Power Company Project) Series 1992A
4
FIRST MORTGAGE
TAX-EXEMPT ISSUE PRINCIPAL AMOUNT BOND SECURITY
---------------- ---------------- --------------
Humboldt County, Nevada $ 1,000,000 6.35% Series FF due 2012
Pollution Control Refunding
Revenue Bonds (Sierra Pacific
Power Company Project) Series 1992B
Washoe County, Nevada $20,000,000 6.55% Series GG due 2020
Gas Facilities Revenue Bonds
(Sierra Pacific Power Company
Project) Series 1990
Washoe County, Nevada Variable Rate $75,000,000 6.65% Series HH due 2017
Demand Water Facilities
Revenue Bonds (Sierra Pacific Power
Company Project) Series 1987
Washoe County, Nevada $21,200,000 6.70% Series II due 2032
Gas Facilities Revenue Bonds
(Sierra Pacific Power Company
Project) Series 1992
Washoe County, Nevada $ 9,800,000 5.90% Series JJ due 2023
Water Facilities Refunding
Revenue Bonds (Sierra Pacific
Power Company Project) Series 1993A
Washoe County, Nevada Gas and $30,000,000 5.90% Series KK due 2023
Water Facilities Refunding
Revenue Bonds (Sierra Pacific
Power Company Project) Series 1993B
B. MEDIUM-TERM NOTES. The Borrower has issued Medium-Term Notes under a
Collateral Trust Indenture dated as of June 1, 1992 between the Borrower and
Bankers Trust Company, as Trustee. Each series of Medium-Term Notes is secured
by a separate First Mortgage Bond of the Borrower issued pursuant to the
Borrower's First Mortgage Indenture. The following Medium-Term Notes of the
Borrower are currently outstanding:
FIRST MORTGAGE
TITLE OF MEDIUM-TERM NOTES PRINCIPAL AMOUNT BOND SECURITY
-------------------------- ---------------- --------------
6.95% Series A Medium-Term Notes $37,000,000 12% Series CC due 2022
due 2022
7.875% Series A Medium-Term Notes $46,000,000 12% Series CC due 2022
due 2022
5
FIRST MORTGAGE
TITLE OF MEDIUM-TERM NOTES PRINCIPAL AMOUNT BOND SECURITY
-------------------------- ---------------- --------------
8.61% Series A Medium-Term Notes $27,000,000 12% Series CC due 2022
due 2022
7.10% Series B Medium-Term Notes $32,500,000 10% Series LL due 2033
due 2023
7.14% Series B Medium-Term Notes $25,500,000 10% Series LL due 2033
due 2023
6.81%Series C Medium-Term Notes $10,000,000 9% Series MM due 2035
due 2006
6.82% Series C Medium-Term Notes $ 5,000,000 9% Series MM due 2035
due 2006
6.83% Series C Medium-Term Notes $ 5,000,000 9% Series MM due 2035
due 2006
6.81% Series C Medium-Term Notes $10,000,000 9% Series MM due 2035
due 2006
6.65% Series C Medium-Term Notes $ 7,000,000 9% Series MM due 2035
due 2006
6.62% Series C Medium-Term Notes $13,000,000 9% Series MM due 2035
due 2006
5.59% Series D Medium-Term Notes $13,000,000 9% Series NN due 2037
due 2003
5.50% Series D Medium-Term Notes $ 5,000,000 9% Series NN due 2037
due 2003
II. ADDITIONAL MORTGAGES
A. On April 9, 1999, a subsidiary of Borrower (SPPC Funding LLC) issued
its 6.40% Notes, Series 1999-1 due 2009 to California Industrial and Economic
Development Bank Special Purpose Trust SPPC-1, the outstanding balance of which
as of August 31, 2002 was $9,404,715. This Note is secured by a security
interest in certain Transition Property of Borrower, to the extent that such
Transition Property is deemed not to have been transferred from Borrower to SPPC
Funding LLC.
B. General and Refunding Mortgage Indenture, dated as of May 1, 2001,
as supplemented by the First Supplemental Indenture dated as of May 1, 2001 (as
amended and supplemented to the date hereof, the "G&R Indenture"), imposes a
lien on substantially all
6
properties owned by the Borrower located in the State of Nevada, which lien, as
to such properties, is junior, subject and subordinate to the lien of First
Mortgage Indenture.
C. On April 8, 2002, the Borrower issued and delivered its General and
Refunding Mortgage Bond, Series B, due November 28, 2002, in the principal
amount of $150 million to secure the Credit Agreement dated as of November 30,
2001, among Sierra Pacific Power Company, Union Bank of California, N.A., as
sole Bookrunner and Administrative Agent, ▇▇▇▇▇ Fargo Bank, N.A., as Syndication
Agent, Bank One, N.A., BNP Paribas and Mellon Bank, N.A., as Co-Documentation
Agents, the Lenders party thereto from time to time, and Union Bank of
California, N.A. and ▇▇▇▇▇ Fargo Bank, N.A., as Co-Lead Arrangers relating to
$150 million credit facility.
III. CASH MANAGEMENT ACTIVITIES
▇. ▇▇▇▇▇ Fargo Bank, N.A. has a lien in the principal amount of
approximately $3 million on certain of the Borrower's deposit accounts,
instruments, investment accounts and investment properties (including cash, cash
equivalents and marketable securities), in each case solely to secure the
Borrower's cash management activities.
7
SCHEDULE 6.5
SCHEDULED ASSET SALES
In addition to the properties listed below, the Borrower anticipates
selling approximately $5,000,000 of miscellaneous property by the end of the
First Quarter of 2003.
I.
LEGAL DESCRIPTION:
Assessor Parcel Number ▇▇▇-▇▇▇-▇▇
EXPLANATION:
The following described property in Washoe County, Nevada as conveyed to the
Truckee River General Electric Company from Reno Power, Light and Water Company
item number 11 of the deed recorded July 7, 1922, File No. 25829, Records of
Washoe County, Nevada.
LAND DESCRIPTION:
A portion of 115 Acres more or less of the ▇▇▇/▇ ▇▇ ▇▇▇.▇▇, ▇▇▇▇, ▇▇▇▇ described
as beginning at the section corner common to Sections 9, 10, 15 and 16, T19N,
R18E and running thence along the section line between Sections 9 and 16,
N88(degree) 54'W, 1640.8 feet; Thence S12(degree) 52'W, 76.47 feet; Thence
S71(degree) 13'W, 208.56 feet; Thence S24(degree)14'W, 362.34 feet; Thence
S40(degree) 55'W, 495.0 feet; Thence S7(degree) 24'E, 514.8 feet; Thence
S26(degree) 30'E, 1342.54 feet; Thence S88(degree) 03'E, 1584.59 feet; Thence
S88(degree) 03'E, 1584.59 feet to the quarter corner between Sections 15 and 16;
Thence N1(degree) 45'E, 2581.78 feet to the point of beginning and being a
fractional part of the NE 1/4 of Sec. 16, T19N, R18E. Excepting therefrom 9.963
acres conveyed on April 30, 1915 to Central Pacific Railway Company and subject
to an easement of the same date to the above Company for right of way across a
portion of the described property.
Containing 40.05 acres more or less
APPRAISED VALUE: $180,000.00
Date of Appraisal: May 3, 2002
II.
LEGAL DESCRIPTION:
8
Assessor Parcel Number ▇▇▇-▇▇▇-▇▇
EXPLANATION:
The following 3 described properties in Washoe County, Nevada compose a single
Assessor Parcel Number.
LAND DESCRIPTION:
(1) Conveyed to the Truckee River General Electric Company from
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, an unmarried person, the following portions of the deed
recorded July 13, 1900, Book 21, Page 265, Records of Washoe County, Nevada.
The Southeast 1/4 of the ▇▇▇▇▇▇▇▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇,
MDB&M.
The Northwest1/4of the ▇▇▇▇▇▇▇▇▇▇/▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇. ▇▇▇▇, MDB&M.
Also that portion of the Southwest 1/4 of the ▇▇▇▇▇▇▇▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇,
▇▇▇▇, MDB&M lying on the Southeast side of the Truckee River.
(2) Conveyed to the Truckee River General Electric Company from County
Treasurer of Washoe County, ▇.▇. ▇▇▇▇, by deed recorded March 1, 1952, File No.
203885, Book 286, Page 163, Records of Washoe County, Nevada.
That certain lot or parcel of land situated in said County and described as the
Fractional part of the S 1/2 of ▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇.
MDB&M, and comprising 10.81 acres.
(3) Conveyed to the Truckee River General Electric Company from
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ by Deed
CONTAINING 93.83 ACRES MORE OR LESS
APPRAISED VALUE: $330,000.00
Date of Appraisal: May 3, 2002
III.
LEGAL DESCRIPTION:
APN ▇▇▇-▇▇▇-▇▇
9
EXPLANATION:
The following described property in Washoe County, Nevada as shown on Parcel
Map for Sierra Pacific Power Company recorded January 12, 2001, File No.
2515252, Official Records of Washoe County, Nevada.
LAND DESCRIPTION:
Parcel 1 of Parcel Map 3734 Official Records of Washoe County
CONTAINING 51.79 ACRES
APPRAISED VALUE: $155,370.00
Date of Appraisal: June 12, 2002
IV.
LEGAL DESCRIPTION:
APN ▇▇▇-▇▇▇-▇▇
EXPLANATION:
The following described property in Washoe County, Nevada as shown on Parcel
Map for Sierra Pacific Power Company recorded January 12, 2001, File No.
2515252, Official Records of Washoe County, Nevada.
LAND DESCRIPTION:
Parcel 2 of Parcel Map 3734 Official Records of Washoe County
CONTAINING 7.89 ACRES
APPRAISED VALUE: $23,670.00
Date of Appraisal: June 12, 2002
V.
LEGAL DESCRIPTION:
10
APN ▇▇▇-▇▇▇-▇▇
EXPLANATION:
The following described property in Washoe County, Nevada as conveyed to Sierra
Pacific Power Company from ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇▇▇▇▇▇▇, husband and
wife, by deed recorded September 17, 1987, File No. 1192527, Book 261, Page
107, Official Records of Washoe County, Nevada.
LAND DESCRIPTION:
Being all that portion of the SW 1/4 of the SW 1/4 of Section 14, Township 19
North, Range 18 East, MDBM, described as follows:
Bounded on the North by the Southerly line of the parcel conveyed to
Sierra Pacific Power Company, by deed recorded September 6, 1930, in
Book 83, Page 497, Deed Records; on the East by the parcel conveyed to
▇. ▇▇▇▇▇▇ by deed recorded January 21, 1926, in Book 28, Page 185, Deed
Records; on the South by the South line of said Section 14 and on the
West by the West line of said Section14.
CONTAINING 1.0 ACRE
APPRAISED VALUE: $80,000.00
Date of Appraisal: June 12, 2002
VI.
LEGAL DESCRIPTION:
APN ▇▇▇-▇▇▇-▇▇, 03, 05, 07, and ▇▇▇-▇▇▇-▇▇ in Nevada County APN ▇▇▇-▇▇▇-▇▇ and
▇▇▇-▇▇▇-▇▇, 06 in Sierra County
EXPLANATION:
The following described property in Nevada County, California and Sierra County,
California as conveyed to Sierra Pacific Power Company from Hobart Estate
Company, ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President and ▇.▇. ▇▇▇▇▇▇▇▇▇, Secretary by deed
recorded December 7, 1940, File No. 4017, Book 64, Page 341, Records of Nevada
County, California and by deed recorded December 6, 1940, File No. 13149, Book
39, Page 157, Records of Sierra County, California.
LAND DESCRIPTION:
11
All real property owned by the said party of the first part in Sections 2, 3, 4,
5, and 9 Township 18 North, Range 15 East, and Sections 33, 34 and 35, Township
19 North, Range 15 East MDB&M, and all water rights incidental or appurtenant
thereto and any and all rights which the said party of the first part may have
to impound or store water thereon: and all right, title, estate and interest
which the said party of the first part may have in and to that certain private
telephone line from Independence Lake to Hobart ▇▇▇▇▇ and all rights and
easements which the said party of the first part may have to maintain and use
the said telephone line.
FAIR MARKET VALUE: $22,000,000.00
12
SCHEDULE 7(e)(ii)
HEDGING OBLIGATIONS
Each of the below-listed parties has exercised its respective contractual right
to terminate gas and/or electric deliveries to the Borrower under the Western
Systems Power Pool Agreement:
(1) Coral Energy Canada
(2) El Paso Merchant Energy Group
(3) Enron North America Corporation
(4) Enron Power Marketing, Inc.
(5) ▇. ▇▇▇▇ & Company
(6) National Fuel Marketing Company
(7) Nexen Marketing
(8) Reliant Canada Incorporated
(9) Reliant Energy Services Incorporated
(10) Retex, Inc.
13
EXHIBIT A
===============================================================================
BOND DELIVERY AGREEMENT
Between
SIERRA PACIFIC POWER COMPANY
and
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
As Administrative Agent
Dated as of October 30, 2002
RELATING TO
$100,000,000 GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES C, DUE OCTOBER 31, 2005
OF
SIERRA PACIFIC POWER COMPANY
===============================================================================
THIS BOND DELIVERY AGREEMENT, made and entered into as of October 30,
2002 (the "Agreement"), by and between SIERRA PACIFIC POWER COMPANY, a
corporation duly organized and existing under the laws of the State of Nevada
(the "Company"), and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., in its capacity as
Administrative Agent under the Term Loan Agreement defined below (the "Agent").
W I T N E S S E T H:
WHEREAS, the Company has entered into the Term Loan Agreement, dated as
of October 30, 2002 (as amended, supplemented, restated or otherwise modified
from time to time, the "Term Loan Agreement"), among the Company, the Agent, the
lenders party thereto from time to time (the "Lenders") and others; and
WHEREAS, pursuant to the Term Loan Agreement, the Lenders have agreed
to make Loans (as defined in the Term Loan Agreement) to the Company, and it is
a condition precedent to the obligation of the Lenders that the Company execute
and deliver this Agreement and deliver the Bond (as defined below) to the Agent
pursuant hereto; and
WHEREAS, to secure the repayment of the Obligations incurred pursuant
to the Term Loan Agreement, the Company has issued and hereby delivers to the
Agent, for its benefit and the ratable benefit of the Lenders under the Term
Loan Agreement, a General and Refunding Mortgage Bond, Series C, due October 31,
2005, No. C-1, in the principal amount of $100,000,000 (the "Bond"), issued
under that certain General and Refunding Mortgage Indenture, dated as of May 1,
2001, between the Company and The Bank of New York, as trustee (the "Trustee"),
as heretofore or hereafter supplemented, modified or amended from time to time
(the "Indenture").
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to enter into the Term Loan Agreement and to make Loans to the
Company thereunder, the Company does hereby, subject to the terms hereof,
covenant and agree with the Agent, as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 1.1. The Company hereby represents and warrants that:
(a) It is a corporation duly incorporated and in good standing under
the laws of the State of Nevada, is not in violation of any provisions of its
Articles of Incorporation or its by-laws, has corporate power to enter into and
to perform its obligations under this Agreement, has duly authorized the
execution and delivery of this Agreement by proper corporate action, and neither
this Agreement nor the obligations on its part herein contained contravene or
constitute a default under any agreement, instrument or indenture or any
provision of its Articles of Incorporation or its by-laws or any other
requirement of law;
1
(b) When delivered to the Agent hereunder, the Bond will have been duly
and validly authorized, authenticated, issued and delivered and will constitute
the legally valid and binding obligation of the Company, entitled to the
benefits as provided by the Indenture; and
(c) The Company expects that the performance by it of its
obligations hereunder will result in a financial benefit to it.
ARTICLE II
DELIVERY OF THE BOND
SECTION 2.1. The Company hereby delivers the Bond to the Agent, fully
registered in the name of the Agent, to secure payment of the principal of the
Loans to the Company made pursuant to the Term Loan Agreement and all interest
thereon and fees, costs, expenses and other amounts payable by the Company
thereunder (all such interest, fees, costs, expenses and other amounts, the
"Interest and Other Amounts").
SECTION 2.2. The Bond is delivered by the Company, and such delivery is
acknowledged and accepted by the Agent, upon and subject to the following terms
and conditions:
(a) NO TRANSFER OF BOND; EXCEPTION. Except as required to effect an
assignment to a successor-in-interest as Administrative Agent under the Term
Loan Agreement, the Agent shall not sell, assign or transfer the Bond held by
it. The Company may take such actions as it shall deem to be desirable,
including the placing of a legend on such Bond in substantially the following
form:
"This Bond is not transferable except to a successor
to the Administrative Agent under the Term Loan Agreement
referred to herein."
and the issuance of stop transfer instructions to the Trustee and any registrar
under the Indenture, to effect compliance with this restriction.
(b) RELEASE OF BOND UPON TERMINATION OF TERM LOAN AGREEMENT. It is the
intent of this Agreement that the Agent shall at all times (during the term of
this Agreement) hold, as security for the payment of the principal of the Loans
and all Interest and Other Amounts, a face amount of the Bond equal to the
aggregate initial principal amount of the Loans under the Term Loan Agreement,
it being understood and agreed that the actual amount of principal payable in
respect of the Bond on any date of determination shall be its face amount or
such lesser amount as shall be equal to the aggregate principal amount of the
Loans outstanding under the Term Loan Agreement on such date (including, without
limitation, all Loans made pursuant to the Term Loan Agreement on such date).
Accordingly, the Agent agrees to surrender the Bond to the Company when all of
the principal of the Loans made pursuant to the Term Loan Agreement shall have
been indefeasibly paid in full in cash, all accrued and unpaid Interest and
Other Amounts payable pursuant to the Term Loan Agreement shall have been
indefeasibly paid in full in cash, and the Term Loan Agreement shall have been
terminated.
2
(c) VOTING OF THE BOND. The Agent, as holder of the Bond, shall attend
or be represented by proxy at any meeting of bondholders under the Indenture as
to which it is entitled to vote under the Indenture. Either at such meeting, or
otherwise where approval or consent of holders of securities of the Company is
sought without a meeting, the Agent shall vote the Bond, or shall consent with
respect thereto, proportionately with what the signer of a Bondholder's
Certificate, as defined below, reasonably believes was the vote or consent of
the holders of all securities issued and outstanding under the Indenture (other
than the Bond).
For purposes of this Section 2.2(c), "Bondholder's Certificate" means a
certificate signed by the temporary Chairman, the temporary Secretary, the
permanent Chairman, the permanent Secretary, or an Inspector of Votes at any
meeting or meetings of securityholders under the Indenture, or by the Trustee in
the case of consents of such securityholders which are sought without a meeting,
which states what the signer thereof reasonably believes was the proportionate
votes or consents of the holders of all securities (other than the Bond)
outstanding under the Indenture and counted for the purposes of determining
whether such securityholders have approved or consented to the matter put before
them.
The provisions of this Section 2.2(c) relating to voting or consent
with respect to the Bond shall not apply, and the Agent may vote or consent with
respect to the Bonds without restriction in accordance with the terms of the
Indenture, if either (i) there shall have occurred and be continuing an Event of
Default under the Indenture or an "Event of Default" under the Term Loan
Agreement or (ii) the matter with respect to which the vote or consent is taken
is a matter which, under the terms of the Indenture, requires the approval or
consent of the holders of all securities then outstanding and affected by such
matter.
SECTION 2.3. To the extent, if any, of the Company's right, title and
interest in the Bond, the Company hereby grants to the Agent, for the ratable
benefit of the Lenders, a security interest in all such right, title and
interest. The Agent shall have, in respect of such security interest, all rights
of a secured party under Article 9 of the Uniform Commercial Code in effect in
the State of New York.
ARTICLE III
TERM; TERMINATION
SECTION 3.1. This Agreement shall remain in full force and effect until
terminated in accordance with this Article III and shall not be affected,
modified or impaired by the happening from time to time of any event, including,
without limitation, any of the following, whether or not with notice to, or
consent of, the Company:
(a) the extension of the time for payment of any principal of or
interest on the Loans made pursuant to the Term Loan Agreement or any Interest
and Other Amounts payable thereunder or of the time for performance of any other
obligation, covenant or agreement under the Indenture;
3
(b) the modification, amendment, compromise, settlement, release,
waiver or termination (whether material or otherwise) of any obligation,
covenant or agreement of the Company under the Indenture;
(c) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets, marshalling of assets,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other similar
proceedings affecting, the Company or any of its assets, or any allegation of
the invalidity, or contest of the validity, of this Agreement in any such
proceeding;
(d) to the extent permitted by law, the release or discharge, whether
by operation of law or otherwise, of the Company from the performance or
observance of any obligation, covenant or agreement under this Agreement; or
(e) the default or failure of the Company fully to perform or observe
any obligation, covenant or agreement under this Agreement.
SECTION 3.2. Upon the indefeasible payment in full in cash of the
principal of the Loans made pursuant to the Term Loan Agreement and all Interest
and Other Amounts payable thereunder and the termination of the Term Loan
Agreement, this Agreement shall terminate, and the Agent shall return the Bond
to the Company.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. The Company shall fully satisfy and discharge all of the
obligations for the payment of the Bond in accordance with its terms, the terms
of the Indenture and the terms of this Agreement, it being the intention that
such obligations shall be separate and independent covenants from any agreements
of the Company with the Agent under the Term Loan Agreement and that such
obligations of the Company hereunder shall continue unaffected unless otherwise
expressly provided in this Agreement.
SECTION 4.2. The Company, at its own expense, shall do such acts and
things, and execute and deliver such conveyances, assignments, assurances,
agreements, financing statements and instruments, as may at any time be required
or desirable in connection with this Agreement or relative to the Bond, in order
to assign, assure and confirm to the Agent a first priority perfected ownership
interest in the Bond.
SECTION 4.3. This Agreement is entered into by the Company for the
benefit of the Agent and any successor-in-interest to the Agent as
Administrative Agent under the Term Loan Agreement, who shall be entitled to
enforce performance and observance of this Agreement to the same extent as if it
were a party signatory hereto.
SECTION 4.4. No remedy herein conferred upon or reserved to the Agent
is intended to be exclusive of any other available remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given under this Agreement or now or
4
hereafter existing at law or in equity. In the event any provision contained in
this Agreement should be breached by the Company and thereafter duly waived by
the Agent, such waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach hereunder. No waiver, amendment,
release or modification of this Agreement shall be established by conduct,
custom or course of dealing, but solely by an instrument in writing duly
executed by the Agent.
SECTION 4.5. All amendments of this Agreement shall be in
writing.
SECTION 4.6. This Agreement (together with the Term Loan Agreement)
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, and may be executed in several counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
SECTION 4.7. In the event any one or more phrases, clauses, sentences,
Sections or Articles of this Agreement shall be held invalid or unenforceable by
any court of competent jurisdiction, such holding shall not affect the validity
or enforceability of the remaining portions hereof.
SECTION 4.8. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 4.9. Any notices, requests or other communications given or
made hereunder or pursuant hereto shall be in writing and shall be deemed to
have been validly given or made when delivered or mailed, postage prepaid,
addressed as follows:
IF TO THE COMPANY:
Sierra Pacific Power Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
IF TO THE AGENT:
As provided in the Term Loan Agreement
or addressed to either party at such other address as such party shall hereafter
furnish to the other party hereto in writing.
SECTION 4.10. THE captions of headings of the Articles and Sections
herein have been inserted for the convenience of reference only and shall in no
way affect the construction or interpretation of this Agreement.
5
IN WITNESS WHEREOF, the Company and the Agent
have caused this Agreement to be executed in their respective corporate names as
of the date first above written.
SIERRA PACIFIC POWER COMPANY
By: ____________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Investment Relations
aan Treasurer
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
in its capacity as Administrative Agent
By: ____________________________________________
Name:
Title:
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to Section
5.2 of the Term Loan Agreement, dated as of October __, 2002, as amended,
supplemented or modified from time to time (the "Loan Agreement"), among SIERRA
PACIFIC POWER COMPANY, a Nevada corporation (the "Borrower"), the Lenders
parties thereto, ▇▇▇▇▇▇ BROTHERS INC., as Arranger, ▇▇▇▇▇▇ COMMERCIAL PAPER
INC., as Administrative Agent, and others. Terms defined in the Loan Agreement
are used herein as therein defined.
The undersigned hereby certifies to the Arranger, the Agents
and the Lenders as follows:
1. I am the duly elected, qualified and acting [Chief
Financial Officer] [Treasurer] of the Borrower.
2. I have reviewed and am familiar with the contents of this
Certificate.
3. I have reviewed the terms of the Loan Agreement and the
Loan Documents and have made or caused to be made under my supervision, a review
in reasonable detail of the transactions and condition of the Borrower during
the accounting period covered by the financial statements attached hereto as
Attachment 1 (the "Financial Statements"). Such review did not disclose the
existence during or at the end of the accounting period covered by the Financial
Statements, and I have no knowledge of the existence, as of the date of this
Certificate, of any condition or event which constitutes a Default or Event of
Default [, except as set forth below].
4. Attached hereto as Attachment 2 are the computations
showing compliance with the covenants set forth in Section 6.1, 6.2, 6.5, 6.6
and 6.7 of the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has executed this
Compliance Certificate as of the date set forth below.
SIERRA PACIFIC POWER COMPANY
By: ____________________________________________
Title:
Date: October __, 2002
Attachment 2
to Exhibit B
The information described herein is as of ______, 200__, and pertains
to the period from _________, 200_ to ________________ __, 200_.
[Set forth Covenant Calculations]
EXHIBIT C
FORM OF CLOSING CERTIFICATE
This Closing Certificate is delivered pursuant to Section
4.1(g) of the Term Loan Agreement, dated as of October __, 2002 (the "Loan
Agreement"; among SIERRA PACIFIC POWER COMPANY, a Nevada corporation (the
"Borrower"), the Lenders parties thereto, ▇▇▇▇▇▇ BROTHERS INC., as Arranger,
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as Administrative Agent, and others. Terms defined
in the Loan Agreement are used herein as therein defined.
The undersigned [INSERT TITLE OF OFFICER] of SIERRA PACIFIC
POWER COMPANY (the "Company") hereby certifies to the Arranger, the Agents and
the Lenders as follows:
1. The representations and warranties of the Company set forth in each
of the Loan Documents to which it is a party or which are contained in any
certificate furnished by or on behalf of the Company pursuant to any of the Loan
Documents to which it is a party are true and correct in all material respects
on and as of the date hereof with the same effect as if made on the date hereof,
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.
2. No Default or Event of Default has occurred and is continuing
as of the date hereof or after giving effect to the Loans to be made on the
date hereof.
3. The conditions precedent set forth in Section 4.1 of the Loan
Agreement were satisfied as of the Closing Date.
4. There are no liquidation or dissolution proceedings pending or to my
knowledge threatened against the Company, nor has any other event occurred
adversely affecting or threatening the continued corporate existence of the
Company.
5. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its organization.
IN WITNESS WHEREOF, the undersigned have executed the Closing
Certificate as of the date set forth below.
-----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Investor Relations and
Treasurer
Date: October, 2002
EXHIBIT D
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Term Loan Agreement, dated as of
October __, 2002 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"), among SIERRA PACIFIC POWER COMPANY (the
"Borrower"), the Lenders parties thereto, ▇▇▇▇▇▇ Brothers Inc., as Arranger,
▇▇▇▇▇▇ Commercial Paper Inc., as Administrative Agent, and others. Unless
otherwise defined herein, terms defined in the Loan Agreement and used herein
shall have the meanings given to them in the Loan Agreement.
The Assignor identified on Schedule l hereto (the "Assignor")
and the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
the Loan Agreement with respect to the Term Loan Facility (the "Assigned
Facility"), in a principal amount as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or any other
obligor or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Loan Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c) attaches any Note held by
it evidencing the Assigned Facility and (i) requests that the Administrative
Agent, upon request by the Assignee, exchange the attached Note for a new Note
payable to the Assignee and (ii) if the Assignor has retained any interest in
the Assigned Facility, requests that the Administrative Agent exchange the
attached Note for a new Note payable to the Assignor, in each case in amounts
which reflect the assignment being made hereby (and after giving effect to any
other assignments which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Loan Agreement, together with copies of the financial
statements delivered pursuant to Section 3.1 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agents 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 decisions in taking or not taking action under
the Loan Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the Agents to
take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Agents by the terms thereof, together with such powers as are incidental
thereto; and (e) agrees that it will be bound by the provisions of the Loan
Agreement and will perform in accordance with its terms all the obligations
which by the terms of the Loan Agreement are required to be performed by it as a
Lender including, if it is organized under the laws of a jurisdiction outside
the United States, its obligation pursuant to Section 2.15(d) of the Loan
Agreement.
4. The effective date of this Assignment and Acceptance shall be the
Effective Date of Assignment described in Schedule 1 hereto (the "Effective
Date"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Loan Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) [to the Assignor for amounts which have accrued to the Effective Date
and to the Assignee for amounts which have accrued subsequent to the Effective
Date] [to the Assignee whether such amounts have accrued prior to the Effective
Date or accrue subsequent to the Effective Date. The Assignor and the Assignee
shall make all appropriate adjustments in payments by the Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.]
6. From and after the Effective Date, (a) the Assignee shall be a party
to the Loan Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Agreement.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
Schedule 1
to Assignment and Acceptance
Name of Assignor: _______________________
Name of Assignee: _______________________
Effective Date of Assignment: _________________
Credit Principal
Facility Assigned Amount Assigned
----------------- ---------------
Term Loan Facility $_______
[Name of Assignee] [Name of Assignee]
By: _____________________________ By: _____________________________
Title: Title:
Accepted: [Consented To:]
▇▇▇▇▇▇ COMMERCIAL PAPER, INC, as [SIERRA PACIFIC POWER COMPANY
Administrative Agent
By: _____________________________ By: _____________________________
Title: Title:
[▇▇▇▇▇▇ COMMERCIAL PAPER, INC, as
Administrative Agent
By: _____________________________
Title:
EXHIBIT F
FORM OF TERM NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH LOAN AGREEMENT.
$____________ New York, New York
October __, 2002
FOR VALUE RECEIVED, the undersigned, SIERRA PACIFIC POWER
COMPANY, a Nevada corporation (the "Borrower"), hereby unconditionally promises
to pay to ________(the "Lender") or its registered assigns at the Payment Office
specified in the Loan Agreement (as hereinafter defined) in lawful money of the
United States and in immediately available funds, the principal amount of (a)
____________DOLLARS ($____), or, if less, (b) the unpaid principal amount of the
Loan made by the Lender pursuant to Section 2.1 of the Loan Agreement. The
principal amount shall be paid in the amounts and on the dates specified in
Section 2.3 of the Loan Agreement. The Borrower further agrees to pay interest
in like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates and on the dates specified in Section 2.10 of the
Loan Agreement.
The holder of this Note is authorized to indorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of the Loan and the date and amount of each payment or prepayment of principal
with respect thereto, each conversion of all or a portion thereof to another
Type, each continuation of all or a portion thereof as the same Type and, in the
case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such indorsement shall constitute prima facie evidence of the
accuracy of the information indorsed. The failure to make any such indorsement
or any error in any such indorsement shall not affect the obligations of the
Borrower in respect of the Loan.
This Note (a) is one of the Term Notes referred to in the Term
Loan Agreement dated as of October __, 2002 (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"), among the Borrower,
the Lender, the other Lenders parties thereto, ▇▇▇▇▇▇ Commercial Paper Inc., as
Administrative Agent, ▇▇▇▇▇▇ Brothers Inc., as Arranger, and others, (b) is
subject to the provisions of the Loan Agreement and (c) is subject to optional
and mandatory prepayment in whole or in part as provided in the Loan Agreement.
This Term Note is secured and guaranteed as provided in the Loan Documents.
Reference is hereby made to the Loan Documents for a description of the
properties and assets in which a security interest has been granted, the nature
and extent of the security and the guarantees, the terms and conditions upon
which the security interests and each guarantee were granted and the rights of
the holder of this Term Note in respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all principal and all accrued interest then remaining unpaid on this
Term Note shall become, or may be declared to be, immediately due and payable,
all as provided in the Loan Agreement.
All parties now and hereafter liable with respect to this Term
Note, whether maker, principal, surety, guarantor, indorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Loan
Agreement and used herein shall have the meanings given to them in the Loan
Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
IN THE LOAN AGREEMENT, THIS TERM NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO
AND IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 9.6 OF
THE LOAN AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SIERRA PACIFIC POWER COMPANY
By: ________________________________
Name:
Title:
Schedule A
to Term Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
-------------------------------------------------------------------------------------------------------------------------------
Amount Amount of Base Rate
Amount of Converted to Amount of Principal of Loans Converted to Unpaid Principal Balance
Date Base Rate Loans Base Rate Loans Base Rate Loans Repaid Eurodollar Loans of Base Rate Loans Notation Made By
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
===============================================================================================================================
Schedule B
to Term Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
----------------------------------------------------------------------------------------------------------------------------------
Amount of Amount Converted Interest Period and Amount of Principal Amount of Eurodollar Unpaid Principal
Eurodollar to Eurodollar Eurodollar Rate with of Eurodollar Loans Converted to Balance of Notation
Date Loans Loans Respect Thereto Loans Repaid Base Rate Loans Eurodollar Loans Made By
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
==================================================================================================================================
EXHIBIT G
FORM OF EXEMPTION CERTIFICATE
Reference is made to the Term Loan Agreement, dated as of
October __, 2002 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement") among SIERRA PACIFIC POWER COMPANY, a Nevada
corporation (the "Borrower"), the Lenders parties thereto, ▇▇▇▇▇▇ BROTHERS INC.,
as Arranger, ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as Administrative Agent, and others.
Capitalized terms used herein that are not defined herein shall have the
meanings ascribed to them in the Loan Agreement.
______________________ (the "Non-U.S. Lender") is providing
this certificate pursuant to Section 2.15(d) of the Loan Agreement. The Non-U.S.
Lender hereby represents and warrants that:
1. The Non-U.S. Lender is the sole record and beneficial owner of the
Loans or the obligations evidenced by Term Note(s) in respect of which it is
providing this certificate.
2. The Non-U.S. Lender is not a "bank" for purposes of Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). In
this regard, the Non-U.S. Lender further represents and warrants that:
(a) the Non-U.S. Lender is not subject to regulatory or other
legal requirements as a bank in any jurisdiction; and
(b) the Non-U.S. Lender has not been treated as a bank for
purposes of any tax, securities law or other filing or
submission made to any Governmental Authority, any application
made to a rating agency or qualification for any exemption
from tax, securities law or other legal requirements;
3. The Non-U.S. Lender is not a 10-percent shareholder of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code; and
4. The Non-U.S. Lender is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code.
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date set forth below.
[NAME OF NON-U.S. LENDER]
By: ________________________________
Name:
Title:
Date: ____________________
EXHIBIT H
FORM OF LENDER ADDENDUM
Reference is made to the Term Loan Agreement, dated as of
October __, 2002 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"), among SIERRA PACIFIC POWER COMPANY, the Lenders
parties thereto, ▇▇▇▇▇▇ Brothers Inc., as Arranger, ▇▇▇▇▇▇ Commercial Paper
Inc., as Administrative Agent, and others. Unless otherwise defined herein,
terms defined in the Loan Agreement and used herein shall have the meanings
given to them in the Loan Agreement.
Upon execution and delivery of this Lender Addendum by the
parties hereto as provided in Section 9.8 of the Loan Agreement, the undersigned
hereby becomes a Lender thereunder having the Commitment set forth in Schedule 1
hereto, effective as of the Closing Date.
THIS LENDER ADDENDUM SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
This Lender Addendum may be executed by one or more of the
parties hereto 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 hereof by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Lender
Addendum to be duly executed and delivered by their proper and duly authorized
officers as of this ____ day of October, 2002
----------------------------------
Name of Lender
By: ______________________________
Name:
Title:
Accepted and agreed:
SIERRA PACIFIC POWER COMPANY
By: _______________________________
Name:
Title:
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Administrative Agent
By: _______________________________
Name:
Title:
Schedule 1
COMMITMENT AND NOTICE ADDRESS
1. Name of Lender: _____________________________
Notice Address: _____________________________
_____________________________
Attention: _____________________________
Telephone: _____________________________
Facsimile: _____________________________
2. Commitment
EXHIBIT I
FORM OF BORROWING NOTICE
To: ▇▇▇▇▇▇ Commercial Paper Inc.,
as Administrative Agent
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Term Loan Agreement, dated as
of October __, 2002 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"), among SIERRA PACIFIC POWER COMPANY, a Nevada
corporation (the "Borrower"), the Lenders party thereto (the "Lenders"), ▇▇▇▇▇▇
Brothers Inc., as Arranger, ▇▇▇▇▇▇ Commercial Paper Inc., as Administrative
Agent, and others. Terms defined in the Loan Agreement and not otherwise defined
herein are used herein with the meanings so defined.
The Borrower hereby gives notice to the Administrative Agent
that Loans in the amount set forth below are requested to be made on the date
indicated below:
Interest Aggregate
Type of Loans Period Amount Date of Loans
------------- ------- --------- -------------
Base Rate Loans N/A _________ October __, 2002
_______ _________
_______ _________
_______ _________
The Borrower hereby requests that the proceeds of Loans
described in this Borrowing Notice be made available to it as follows:
[insert transmittal instructions].
The Borrower hereby certifies that all conditions contained in
the Loan Agreement to the making of any Loan requested have been met or
satisfied in full.
SIERRA PACIFIC POWER COMPANY
By: _______________________________
Title:
DATE: October __, 2002