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EXHIBIT 10.16
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FINANCING AGREEMENT
Dated as of October 1, 1999
By and Between
▇▇▇▇▇ COUNTY, NEVADA
and
SOUTHWEST GAS CORPORATION
relating to
▇▇▇▇▇ COUNTY, NEVADA
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(SOUTHWEST GAS CORPORATION PROJECT)
SERIES 1999A
and
▇▇▇▇▇ COUNTY, NEVADA
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(SOUTHWEST GAS CORPORATION PROJECT)
TAXABLE SERIES 1999B
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS...............................................................................1
SECTION 1.1 Definitions of Terms........................................................1
SECTION 1.2 Number and Gender...........................................................1
SECTION 1.3 Articles, Sections..........................................................1
ARTICLE II REPRESENTATIONS...........................................................................2
SECTION 2.1 Representations by the Issuer................................................2
SECTION 2.2 Representations by the Borrower..............................................2
ARTICLE III THE PROJECT; ISSUANCE OF THE BONDS........................................................4
SECTION 3.1 The Project..................................................................4
SECTION 3.2 Agreement to Issue Bonds; Application of Bond Proceeds.......................4
SECTION 3.3 Disbursements from the Construction Fund and Costs of Issuance Fund..........4
SECTION 3.4 Investment of Moneys.........................................................5
SECTION 3.5 Costs of Issuance............................................................6
ARTICLE IV LOAN AND PROVISIONS FOR REPAYMENT.........................................................6
SECTION 4.1 Loan of Bond Proceeds........................................................6
SECTION 4.2 Loan Repayments and Other Amounts Payable....................................6
SECTION 4.3 Unconditional Obligation.....................................................8
SECTION 4.4 Payments Pledged and Assigned................................................9
SECTION 4.5 Payment of the Bonds and Other Amounts.......................................9
ARTICLE V SPECIAL COVENANTS AND AGREEMENTS..........................................................9
SECTION 5.1 Right of Access to the Project and Records...................................9
SECTION 5.2 Borrower's Maintenance of Its Existence; Assignments........................10
SECTION 5.3 Establishment of Completion Date; Obligation of Borrower to Complete........11
SECTION 5.4 Maintenance and Repair; Taxes; Utility and Other Charges....................12
SECTION 5.5 Qualification in Nevada.....................................................12
SECTION 5.6 No Warranty by the Issuer...................................................12
SECTION 5.7 Agreement as to Use of the Project..........................................12
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TABLE OF CONTENTS (Continued)
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SECTION 5.8 Notices and Certificates Required to be Delivered to the Trustee............12
SECTION 5.9 Borrower to Furnish Notice of Adjustments of Interest Rate Periods..........13
SECTION 5.10 Information Reporting.......................................................13
SECTION 5.11 Tax Covenants; Rebate.......................................................13
SECTION 5.12 [Reserved]..................................................................14
SECTION 5.13 Continuing Disclosure.......................................................14
SECTION 5.14 Alternate Liquidity Facility................................................14
SECTION 5.15 Bond Insurance, Liquidity Facility..........................................15
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES............................................................16
SECTION 6.1 Events of Default Defined...................................................16
SECTION 6.2 Remedies on Default.........................................................17
SECTION 6.3 No Remedy Exclusive.........................................................19
SECTION 6.4 Agreement to Pay Fees and Expenses of Counsel...............................19
SECTION 6.5 No Additional Waiver Implied by One Waiver; Consents to Waivers.............20
ARTICLE VII OPTION AND OBLIGATION OF BORROWER TO PREPAY...............................................20
SECTION 7.1 Option to Prepay............................................................20
SECTION 7.2 Obligation to Prepay........................................................20
SECTION 7.3 Notice of Prepayment; Amount to be Prepaid..................................20
SECTION 7.4 Cancellation at Expiration of Term..........................................21
ARTICLE VIII NON-LIABILITY OF ISSUER...................................................................21
SECTION 8.1 Non-Liability of the Issuer.................................................21
ARTICLE IX MISCELLANEOUS ............................................................................22
SECTION 9.1 Notices.....................................................................22
SECTION 9.2 Assignments.................................................................22
SECTION 9.3 Severability................................................................22
SECTION 9.4 Execution of Counterparts...................................................22
SECTION 9.5 Amounts Remaining in Bond Fund..............................................22
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TABLE OF CONTENTS (Continued)
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SECTION 9.6 Amendments, Changes and Modifications.......................................22
SECTION 9.7 Governing Law...............................................................23
SECTION 9.8 Authorized Issuer and Borrower Representatives..............................23
SECTION 9.9 Term of the Agreement.......................................................23
SECTION 9.10 Binding Effect..............................................................23
SECTION 9.11 Trustee as a Party in Interest and Third Party Beneficiary..................23
EXHIBIT A Description of the Project...............................................................A-1
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THIS FINANCING AGREEMENT made and entered into as of October 1, 1999
(this "Agreement"), by and between ▇▇▇▇▇ COUNTY, NEVADA, a political subdivision
of the State of Nevada, party of the first part (hereinafter sometimes referred
to as the "Issuer"), and SOUTHWEST GAS CORPORATION, a California corporation,
party of the second part (hereinafter sometimes referred to as the "Borrower"),
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Issuer is entering into an Indenture of Trust, dated as of
October 1, 1999 (the "Indenture"), with ▇▇▇▇▇▇ Trust and Savings Bank, as
trustee (the "Trustee") thereunder, pursuant to which the ▇▇▇▇▇ County, Nevada
Industrial Development Revenue Bonds (Southwest Gas Corporation Project) Series
1999A, and its ▇▇▇▇▇ County, Nevada Industrial Development Revenue Bonds
(Southwest Gas Corporation Project) Taxable Series 1999B, will be issued and
secured, and providing for the further security and liquidity for such Bonds by
Bond Insurance and, if applicable, a Liquidity Facility, as such terms are
defined in the Indenture; and
WHEREAS, the Issuer hereby confirms and the Borrower hereby
acknowledges and adopts the recitals to the Indenture as though fully set forth
here;
NOW, THEREFORE, in consideration of the respective representations and
agreements hereinafter contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions of Terms. Except as defined below, for all
purposes of this Agreement, unless the context clearly requires otherwise, all
terms defined in Article I of the Indenture have the same meanings in this
Agreement.
"Event of Default" under this Agreement is defined in Section
6.1.
SECTION 1.2 Number and Gender. The singular form of any word used
herein, including the terms defined in Section 1.02 of the Indenture, shall
include the plural, and vice versa. The use herein of a word of any gender shall
include all genders.
SECTION 1.3 Articles, Sections. Unless otherwise specified, references
to Articles, Sections and other subdivisions of this Agreement are to the
designated Articles, Sections and other subdivisions of this Agreement as
originally executed. The words "hereof," "herein," "hereunder" and words of
similar import refer to this Agreement as a whole. The headings or titles of the
several articles and sections, and the table of contents appended to copies
hereof, shall be solely for convenience of reference and shall not affect the
meaning, construction or effect of the provisions hereof.
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ARTICLE II
REPRESENTATIONS
SECTION 2.1 Representations by the Issuer. The Issuer makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) The Issuer is a political subdivision of the State of Nevada.
Under the provisions of the Act, the Issuer has the power to enter into the
transactions contemplated by this Agreement and to carry out its obligations
hereunder. By proper action, the Issuer has been duly authorized to execute,
deliver and duly perform this Agreement and the Indenture. To the extent the
foregoing representation involves a legal conclusion, such representation is
made in reliance on the opinion of Bond Counsel.
(b) To finance or refinance part of the Cost of the Project,
including the refunding of the Refunded Bonds, the Issuer will issue the Bonds,
which will mature, bear interest and be subject to redemption as provided in the
Indenture.
(c) The Issuer's interest in this Agreement (except certain
rights of the Issuer to payment of fees and expenses and indemnification, to
rights of inspection and to consents and rights to receive any notices,
certificates, requests, requisitions and other communications) will be pledged
to the Trustee as security for payment of the principal of, and premium, if any,
and interest on the Bonds.
(d) The Issuer has not pledged and will not pledge its interest
in this Agreement for any purpose other than to secure the Bonds under the
Indenture.
(e) The Issuer is not in default under any of the provisions of
the laws of the State of Nevada which default would affect its existence or its
powers referred to in subsection (a) of this Section 2.1.
(f) The Issuer has found and determined and hereby finds and
determines that all requirements of the Act with respect to the issuance of the
Bonds and the execution of this Agreement and the Indenture have been complied
with and that financing or refinancing the Project, including the refunding of
the Refunded Bonds, by issuing the Bonds and entering into this Agreement and
the Indenture is in the public interest, serves the public purposes and meets
the requirements of the Act.
(g) On September 15, 1998, the Issuer adopted an initial
resolution authorizing the issuance of bonds in an amount not to exceed
$50,000,000 to finance a portion of the Cost of the Project. On March 2, 1999,
the Issuer adopted its resolution approving the issuance of the Bonds.
(h) No member, officer or other official of the Issuer has any
interest whatsoever in the Borrower or in the transactions contemplated by this
Agreement.
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SECTION 2.2 Representations by the Borrower. The Borrower makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) The Borrower is a corporation duly incorporated and in good
standing in the State of California, is duly qualified to transact business and
in good standing in the State, has power to enter into and by proper corporate
action has been duly authorized to execute and deliver this Agreement and all
other documents contemplated hereby to be executed by the Borrower in connection
with the issuance and sale of the Bonds.
(b) Neither the execution and delivery of this Agreement or any
other documents contemplated hereby to be executed by the Borrower in connection
with the issuance and sale of the Bonds, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, conflicts with or results in a breach of any of
the terms, conditions or provisions of the Borrower's articles of incorporation
or by-laws or of any corporate actions or of any agreement or instrument to
which the Borrower is now a party or by which it is bound, or constitutes a
default (with due notice or the passage of time or both) under any of the
foregoing, or result in the creation or imposition of any prohibited lien,
charge or encumbrance whatsoever upon any of the property or assets of the
Borrower under the terms of any instrument or agreement to which the Borrower is
now a party or by which it is bound.
(c) The Cost of the Project is as set forth in the Tax
Certificate and has been determined in accordance with sound
engineering/construction and accounting principles. All the information provided
by, and all the representations made by, the Borrower in the Tax Certificate are
true and correct as of the date thereof.
(d) The Project consists of those facilities described in Exhibit
A to this Agreement and in the Southwest Gas Corporation Engineering Certificate
dated the date of issuance of the Series 1999A Bonds (the "Engineering
Certificate") which is incorporated by reference herein, and the Borrower shall
not make any changes to the Project except as otherwise permitted hereunder or
to the operation thereof which would affect the qualification of the Project
under the Act or, after the conversion of any Bonds to a Tax-Exempt Series,
impair the Tax-Exempt status of the Bonds of a Tax-Exempt Series. In particular,
the Borrower shall comply with all requirements set forth in the Tax
Certificate. The Borrower intends to cause the Project to be used for the local
furnishing of natural gas until the principal of, the premium, if any, and the
interest on the Bonds shall have been paid.
(e) The Borrower has and will have title to and all necessary
easements to install the Project, sufficient to carry out the purposes of this
Agreement.
(f) At the time of submission of an application to the Issuer for
financial assistance in connection with the Project and on the dates on which
the Issuer took action on such application, permanent financing for the Project
had not otherwise been obtained or arranged.
(g) All certificates, approvals, permits and authorizations with
respect to the construction of the Project of agencies of applicable local
governments, the State of Nevada and the federal government have been obtained
or will be obtained in the normal course of business.
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(h) No event has occurred and no condition exists which would
constitute an Event of Default or which with the passing of time or with the
giving of notice or both would become such an Event of Default.
(i) To the best of the knowledge of the Borrower, no member,
officer, or other official of the Issuer has any interest whatsoever in the
Borrower or in the transactions contemplated by this Agreement.
(j) The Borrower has reviewed the Indenture and hereby accepts
the terms thereof.
ARTICLE II
THE PROJECT; ISSUANCE OF THE BONDS
SECTON 3.1 The Project. The Borrower agrees that it will acquire,
construct, equip, and install, or complete the acquisition, construction,
equipping, and installation of the Project and all other facilities and real and
personal property necessary for the operation of the Project and at all times
shall operate the Project as a "project" within the meaning of the Act and so
that the Project constitutes Exempt Facilities and substantially in accordance
with the Plans and Specifications. The Borrower agrees to proceed with due
diligence to complete the Project within three years from the date hereof.
SECTION 3.2 Agreement to Issue Bonds; Application of Bond Proceeds. In
order to provide funds to lend to the Borrower to finance or refinance part of
the Cost of the Project as provided in Section 4.1 hereof, the Issuer agrees
that it will issue under the Indenture and sell and cause to be delivered to the
Purchasers thereof its Series 1999A Bonds and its Series 1999B Bonds in an
aggregate principal amount not to exceed $35,000,000, each bearing interest and
maturing as set forth in the Indenture. The Issuer will thereupon deposit the
proceeds received from the sale of the Bonds as provided in Section 2.02(e) of
the Indenture.
SECTION 3.3 Disbursements from the Construction Fund and Costs of
Issuance Fund. The Company will request pursuant to the terms of the Indenture,
authorize and direct the Trustee to disburse the moneys in the Construction Fund
to or on behalf of the Borrower, upon compliance with Section 6.06 of the
Indenture, for the following purposes (but, subject to the provisions of Section
3.4 hereof, for no other purpose):
(a) Payment to the Borrower of such amounts, if any, as shall be
necessary to reimburse the Borrower, in full for all advances and payments made
by it at any time prior to or after the delivery of the Bonds for expenditures
incurred in connection with the preparation of plans and specifications for the
Project (including any preliminary study or planning of the Project or any
aspect thereof) and the acquisition, construction and installing of the Project.
(b) Payment for labor, services, materials and supplies used or
furnished in site improvement and in the acquisition, construction and
installing of the Project and miscellaneous expenditures incidental to any of
the foregoing items.
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(c) Payment of the fees, if any, for architectural, engineering,
legal, underwriting and supervisory services with respect to the Project and the
Bonds.
(d) Payment of the premiums on all insurance that was required to
be acquired and maintained in connection with the Project during the
construction period with respect to the Project.
(e) Payment of the taxes, assessments and other charges, if any,
that may have become payable during the construction period with respect to the
Project.
(f) Payment of expenses incurred in seeking to enforce any remedy
against any contractor or subcontractor or any other third party in respect of
any default under a contract relating to the Project.
(g) Payment of any other costs which constitute a part of the
Cost of the Project in accordance with generally accepted accounting principles,
which are permitted by the Act and which will not adversely affect the
Tax-Exempt status of the Bonds of a Tax-Exempt Series.
Each of the payments referred to in Sections 3.3(a)-(g) shall be made
upon receipt by the Trustee of a written requisition in the form prescribed by
Section 6.06 of the Indenture, signed by the Authorized Borrower Representative.
The Borrower will authorize and direct the Trustee, upon compliance
with Section 6.07 of the Indenture, to disburse the moneys in the Costs of
Issuance Fund to or on behalf of the Borrower only for Costs of Issuance. Each
of the payments referred to in this paragraph shall be made upon receipt by the
Trustee of a written requisition in the form prescribed by Section 6.07 of the
Indenture.
The Borrower covenants and agrees that at all times at least 97% of the
moneys so disbursed out of the Construction Fund will be used to pay or
reimburse the Borrower for the payment of qualifying costs of Exempt Facilities
as described in the Tax Certificate. The Borrower further covenants and agrees
that it will not take any action or authorize or permit, any action to be taken
which would adversely affect the Tax-Exempt status of the Bonds of a Tax-Exempt
Series.
The Borrower understands that the Tax Certificate may impose additional
restrictions on withdrawals from the Construction Fund, and the Borrower agrees
to be bound by such restrictions, if any.
SECTION 3.4 Investment of Moneys . Any moneys held as a part of the
Bond Fund or the Construction Fund or the Costs of Issuance Fund shall be
invested or reinvested by the Trustee at the written direction of an Authorized
Borrower Representative as to specific investments, to the extent permitted by
law, in accordance with Section 7.01 of the Indenture. The Borrower shall not
direct the Trustee to make any investments or reinvestments other than those
permitted by the Indenture and as permitted by law. In making any such
investments, the Trustee may rely on directions delivered to it pursuant to this
Section, and the Trustee and the Issuer shall be relieved of all liability with
respect to making such investments in accordance
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with such directions. The Borrower agrees that to the extent any moneys in the
Bond Fund represent moneys held for the payment of the principal of Bonds which
have become due at maturity or on a redemption date and the premium, if any, on
such Bonds or interest due on Bonds in all cases where Bonds have not been
presented for payment and paid or such interest is unclaimed, or to the extent
any moneys are held by the Trustee for the payment of the purchase price of
Bonds which have not been presented for payment, such moneys shall not be
invested.
SECTION 3.5 Costs of Issuance. The Borrower covenants and agrees to pay
all costs incurred in connection with the issuance of the Bonds, which may be
reimbursed or paid out of the proceeds of the Bonds to the extent permitted by
the Act, the Code and the Tax Certificate, and the Issuer shall have no
obligation with respect to such costs.
ARTICLE IV
LOAN AND PROVISIONS FOR REPAYMENT
SECTION 4.1 Loan of Bond Proceeds. (a) The Issuer agrees, upon the
terms and conditions in this Agreement, to lend to the Borrower the proceeds
received by the Issuer from the sale of the Bonds in order to finance or
refinance a portion of the Cost of the Project. The Issuer's obligation herein
shall be solely to deposit the proceeds of the Bonds with the Trustee as
provided in Section 3.2 hereof. Upon such deposit, the Issuer will be deemed to
have made two loans to the Borrower, one in an amount equal to the principal
amount of the Series 1999A Bonds and one in an amount equal to the principal
amount of the Series 1999B Bonds.
(b) The Issuer and the Borrower expressly reserve the right to
enter into, to the extent permitted by law, an agreement or agreements other
than this Agreement, with respect to the issuance by the Issuer, under an
indenture or indentures other than the Indenture, of obligations to provide
additional funds to pay the Cost of the Project or to refund all or any
principal amount of the Bonds (or any portions thereof), or any combination
thereof.
SECTION 4.2 Loan Repayments and Other Amounts Payable. (a) On each date
provided in or pursuant to the Indenture for the payment of principal (whether
at maturity or upon redemption or acceleration) of and/or premium, if any,
and/or interest on the Bonds, until the principal of and premium, if any, and
interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, the Borrower
shall pay to the Trustee in immediately available funds, for deposit in the Bond
Fund, as a repayment installment of the loan of the proceeds of the Bonds
pursuant to Section 4.1 hereof, a sum equal to the amount payable on such
interest payment or redemption or acceleration or maturity date as principal
(whether at maturity or upon redemption or acceleration) of and premium, if any,
and interest on the Bonds as provided in the Indenture. In the event the
Borrower shall fail to make any of the payments required in this subsection, the
payment so in default shall continue as an obligation of the Borrower until the
amount in default shall have been fully paid.
(b) The Borrower shall pay to the Trustee amounts equal to the
amounts to be paid by the Trustee for the purchase of Bonds which have not been
remarketed pursuant to Article IV of the Indenture. Such amounts shall be paid
by the Borrower to the Trustee, acting as
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Tender Agent (or, for so long as the Bonds are Book-Entry Bonds, to the
Securities Depository), in immediately available funds on the dates and no later
than the times such payments pursuant to Section 4.05 of the Indenture are to be
made. In the event the Borrower shall fail to make any of the payments required
in this subsection, the payment so in default shall continue as an obligation of
the Borrower until the amount in default shall have been fully paid. The
obligation of the Borrower to make any payment under this subsection shall be
deemed to have been satisfied to the extent of any corresponding payment made by
the Liquidity Provider to the Trustee under a Liquidity Facility.
(c) The Borrower agrees to pay to the Trustee, (i) the reasonable
fees, charges and expenses of the Trustee, as Registrar, and as Paying Agent and
Tender Agent, as and when the same become due, and (ii) the reasonable fees,
charges and expenses of the Trustee, as and when the same become due under the
Indenture, including payments under Section 6.4 hereof, and including the annual
fee of the Trustee for the services rendered by it and the expenses incurred by
it under the Indenture. In the event the Borrower should fail to make any of the
payments required in this subsection, the item or installment so in default
shall continue as an obligation of the Borrower until the amount in default
shall have been fully paid; provided, however, that such failure of payment
shall not be deemed an event of default during the period in which the Borrower
is in good faith contesting, by appropriate proceedings promptly initiated and
diligently conducted, such payment required by this subsection. The provision of
this subsection shall survive the retirement of the Bonds and the termination of
this Agreement.
(d) The Borrower shall pay to the Issuer upon demand all
Administrative Expenses, including payments under Section 6.4 hereof. In the
event the Borrower should fail to make any of the payments required in this
subsection, the item or installment so in default shall continue as an
obligation of the Borrower until the amount in default shall have been fully
paid.
(e) The Borrower releases the Issuer and the Trustee from, and
covenants and agrees that neither the Issuer nor the Trustee shall be liable
for, and covenants and agrees, to the extent permitted by law, to indemnify and
hold harmless the Issuer and the Trustee and their directors, officers,
employees and agents from and against, any and all losses, claims, damages,
liabilities or expenses, of every conceivable kind, character and nature
whatsoever arising out of, resulting from or in any way connected with (1) the
Project, or the conditions, occupancy, use, possession, conduct or management
of, or work done in or about, or from the planning, design, acquisition,
installation or construction of the Project or any part thereof (including
without limitation any of the foregoing relating to any federal, state or local
environmental law, rule or regulation); (2) the issuance of any Bonds or any
certifications, covenants or representations made in connection therewith and
the carrying out of any of the transactions contemplated by the Bonds and this
Agreement; (3) the Trustee's acceptance or administration of the trusts under
the Indenture, or the exercise or performance of any of its powers or duties
under the Indenture; or (4) any untrue statement or alleged untrue statement of
any material fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading, in any official
statement or other offering circular utilized by the Issuer or any underwriter
or placement agent in connection with the sale or remarketing of any Bonds;
provided that such indemnity shall not be required for damages that result from
willful misconduct (or, as to the Trustee, negligence) on the part of the party
seeking such indemnity or result from statements or information provided by the
party seeking such indemnity. The Borrower further covenants and
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agrees, to the extent permitted by law, to pay or to reimburse the Issuer and
the Trustee and their respective officers, employees and agents for any and all
costs, reasonable attorneys fees, liabilities or expenses incurred in connection
with investigating, defending against or otherwise in connection with any such
losses, claims, damages, liabilities, expenses or actions, except to the extent
that the same arise out of the willful misconduct (or, as to the Trustee,
negligence) of the party claiming such payment or reimbursement. The provisions
of this Section shall survive the retirement of the Bonds and the expiration of
this Agreement.
The indemnified party shall promptly notify the Borrower in writing of
any claim or action covered by this indemnity and brought against the
indemnified party, or in respect of which indemnity may be sought against the
Borrower, setting forth the particulars of such claim or action, and the
Borrower will assume the defense thereof, including the employment of counsel
satisfactory to the indemnified party and the payment of all expenses. The
indemnified party may employ separate counsel in any such action and participate
in the defense thereof, and the fees and expenses of such counsel shall be
payable by the Borrower.
(f) The Borrower agrees to pay to the Remarketing Agent the
reasonable fees, charges and expenses of such Remarketing Agent, and the Issuer
shall have no obligation or liability with respect to the payment of any such
fees, charges or expenses.
(g) The Borrower agrees to pay any Rebate Requirement (as defined
in the Tax Certificate) to the Trustee for deposit in the Rebate Fund.
(h) The Borrower also agrees to pay, (i) as soon as practicable
after receipt of request for payment thereof, all expenses required to be paid
by the Borrower under the terms of any Bond Purchase Agreement relating to the
sale of the Bonds; (ii) at the time of issuance of any Bonds, the Issuer's
administrative fee in the amount of $35,000; and (iii) at the time of issuance
of any Bonds, all reasonable expenses of the Issuer related to such Bonds which
are not otherwise required to be paid by the Borrower under the terms of this
Agreement.
SECTION 4.3 Unconditional Obligation. The obligation of the Borrower to
make the payments pursuant to this Agreement and to perform and observe the
other agreements on its part contained herein shall be absolute and
unconditional, irrespective of any defense or any rights of set-off, recoupment
or counterclaim it might otherwise have against the Issuer, and during the term
of this Agreement, the Borrower shall pay absolutely the payments to be made on
account of the loan as prescribed in Section 4.2 and all other payments as
prescribed herein, free of any deductions and without abatement, diminution or
set-off. Until such time as the principal of and premium, if any, and interest
on the Bonds shall have been fully paid, or provisions for the payment thereof
shall have been made as required by the Indenture, the Borrower (i) will not
suspend or discontinue any payments required hereunder, including payments
provided for in Section 4.2 hereof; (ii) will perform and observe all of its
other covenants contained in this Agreement; and (iii) except as provided in
Article VII hereof, will not terminate this Agreement for any cause, including,
without limitation, the occurrence of any act or circumstance that may
constitute failure of consideration, destruction of or damage to the Project,
commercial frustration of purpose, any change in the tax or other laws of the
United States of America or of the State of Nevada or any political subdivision
of either of them, or any failure of the Issuer or the Trustee to perform and
observe any covenant, whether express or
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implied, or any duty, liability or obligation arising out of or connected with
this Agreement or the Indenture, except to the extent permitted by this
Agreement.
SECTION 4.4 Payments Pledged and Assigned. It is understood and agreed
that all rights to the payment of moneys hereunder (except payments made to the
Trustee pursuant to Sections 4.2(c), 4.2(e) 4.2(g), 4.2(h), and 6.4 hereof and
payments to be made to the Remarketing Agent pursuant to Section 4.2(f) hereof
and payments to be made to the Issuer pursuant to Sections 4.2(d), 4.2(e),
4.2(h) and 6.4 hereof and its rights of indemnification and inspection and
rights to receive notices, certificates, requests, requisitions or other
communications and to give consents hereunder) are pledged and assigned to the
Trustee by the Indenture. The Borrower consents to such pledge and assignment.
The Issuer hereby directs the Borrower and the Borrower hereby agrees to pay or
cause to be paid to the Trustee all said amounts required to be paid by or for
the account of the Borrower pursuant to Section 4.2 hereof (except payments to
be made directly to the Remarketing Agent pursuant to Section 4.2(f) hereof and
payments to be made directly to the Issuer pursuant to Sections 4.2(d), 4.2(e),
4.2(h) and 6.4 hereof). The Project will not constitute any part of the security
for the Bonds.
SECTION 4.5 Payment of the Bonds and Other Amounts. The Bonds shall be
payable from payments made by the Borrower to the Trustee under Section 4.2(a)
hereof. Payments of principal of or premium, if any, or interest on the Bonds
with moneys in the Bond Fund or earnings on investments made under the
provisions of the Indenture shall be credited against the obligation to pay
required by Section 4.2(a) hereof. Whenever any Bonds are redeemable in whole or
in part at the option of the Borrower, the Trustee, on behalf of the Issuer,
shall redeem the same upon the request of the Borrower and such redemption shall
constitute payment of amounts required by Section 4.2(a) hereof equal to the
redemption price of such Bonds.
Whenever payment or provision therefor has been made in respect of the
principal of or premium, if any, or interest on all or any portion of the Bonds
in accordance with the Indenture (whether at maturity or upon redemption or
acceleration or upon provision for payment in accordance with Article VIII of
the Indenture), payments shall be deemed paid to the extent such payment or
provision therefor has been made and is considered to be a payment of principal
of or premium, if any, or interest on such Bonds. If such Bonds are thereby
deemed paid in full, the Trustee shall notify the Borrower and the Issuer that
such payment requirement has been satisfied. Subject to the foregoing, or unless
the Borrower is entitled to a credit under this Agreement or the Indenture, all
payments shall be in the full amount required by Sections 4.2(a) and (b) hereof.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1 Right of Access to the Project and Records. The Borrower
agrees that during the term of this Agreement the Issuer, the Trustee and the
duly authorized agents of either of them shall have the right at all reasonable
times during normal business hours to examine the books and records of the
Borrower with respect to the Project and to enter upon the site of the Project
to examine and inspect the Project; provided, however, that this right is
subject to federal and State laws and regulations applicable to the site of the
Project. The rights of access hereby
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reserved to the Issuer and the Trustee may be exercised only after such agent
shall have executed release of liability and secrecy agreements if requested by
the Borrower in the form then currently used by the Borrower, and nothing
contained in this Section or in any other provision of this Agreement shall be
construed to entitle the Issuer or the Trustee to any information or inspection
involving the confidential know-how of the Borrower.
SECTION 5.2 Borrower's Maintenance of Its Existence; Assignments.
(a) To the extent permitted by law and its articles of
incorporation, the Borrower agrees that during the term of this Agreement it
will maintain its corporate existence in good standing and its authorization to
do business in the State and will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another Person or permit one or more other Persons to consolidate with or merge
into it; provided, however, that the Borrower may, without violating the
covenants in this Section, merge into or consolidate with or transfer all or
substantially all of its assets to a wholly-owned subsidiary of the Borrower;
and provided further that the Borrower may, without violating the covenants in
this Section, combine, consolidate with or merge into another Person qualified
to do business in one of the states of the United States, or permit one or more
other Persons to combine, consolidate with or merge into it, or sell to another
Person all or substantially all of its assets, if:
(i) the surviving, resulting or transferee Person, as the
case may be (A) assumes and agrees in writing to pay and perform all of the
obligations of the Borrower hereunder, and (B) is qualified to do business in
the State;
(ii) the existing Liquidity Facility, if any, will remain in
full force and effect or will be replaced as provided in Section 5.14 or the
Series 1999B Bonds shall have been redeemed; and
(iii) the rating on the outstanding Bonds shall be no lower
than the rating on the outstanding Bonds immediately prior to the transaction.
The Borrower agrees to provide the Issuer such information as the
Issuer may reasonably request in order to assure compliance with this Section
5.2(a).
Within ten (10) Business Days after the consummation of the
merger or other transaction described above, the Borrower shall (except as
provided in the next sentence) provide the Issuer, the Bond Insurer and the
Trustee with counterpart copies of the merger instruments or other documents
constituting the transaction but only to the extent that such documents or
instruments are available to the public and not subject to any confidentiality
agreement or restriction, and an officer's certificate satisfactory to the
Issuer executed by an Authorized Borrower Representative that all of the
provisions of this Section 5.2(a) have been complied with. In the case of a (i)
merger or consolidation of the Borrower and any wholly-owned subsidiary of the
Borrower or (ii) the transfer to any wholly-owned subsidiary of the Borrower of
all or substantially all of the assets of the Borrower, the Borrower shall send
the Issuer, the Bond Insurer and the Trustee a notice of such merger within ten
(10) Business Days after its completion, together with the officer's certificate
described in the preceding sentence.
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Notwithstanding any other provision of this Section 5.2, the
Borrower need not comply with any of the provisions of Section 5.2(a) if, at the
time of such merger, combination, sale of assets, dissolution or reorganization,
the Bonds will be defeased as provided in Article VIII of the Indenture.
(b) The rights and obligations of the Borrower under this
Agreement may be assigned and delegated, respectively, by the Borrower to any
person in whole or in part, subject, however, to each of the following
conditions:
(i) No assignment other than pursuant to subsection (a) of
this Section shall relieve the Borrower from primary liability for any of its
obligations hereunder, and in the event of any assignment not pursuant to said
subsection (a) the Borrower shall continue to remain primarily liable for the
payments specified in Section 4.2 hereof and for performance and observance of
the other agreements on its part herein provided to be performed and observed by
it.
(ii) Any assignment from the Borrower shall retain for the
Borrower such rights and interests as will permit it to perform its obligations
under this Agreement, and any assignee from the Borrower shall assume in writing
the obligations of the Borrower hereunder to the extent of the interest
assigned.
(iii) The Borrower shall, within thirty (30) days of each
such assignment, furnish or cause to be furnished to the Issuer and the Trustee
a true and complete copy of each such assignment together with an instrument of
assumption and an opinion of Counsel satisfactory to the Issuer that the
Borrower has complied with the provision of this Section 5.2(b).
(c) In the case of any consolidation, merger or transfer pursuant
to subsection (a) hereof or any assignment pursuant to subsection (b) hereof,
the Borrower shall cause to be delivered to the Issuer and the Trustee, not
later than the effective date of such consolidation, merger, transfer or
assignment, an opinion of Bond Counsel to the effect that such consolidation,
merger, transfer or assignment will not, in and of itself, adversely affect the
Tax-Exempt status of any Tax-Exempt Bonds.
SECTION 5.3 Establishment of Completion Date; Obligation of Borrower to
Complete. As soon as the Project is completed, the Authorized Borrower
Representative, on behalf of the Borrower, shall evidence the Completion Date by
providing a certificate to the Trustee and the Issuer stating the Cost of the
Project and further stating that (i) the acquisition, equipping and construction
of the Project has been completed substantially in accordance with the plans,
specifications and work orders therefor, and all labor, services, materials and
supplies used in the acquisition, equipping, rehabilitation and construction
have been paid or provided for, and (ii) all other facilities necessary in
connection with the Project have been acquired, constructed and installed in
accordance with the plans and specifications and work orders therefor and all
costs and expenses incurred in connection therewith have been paid or provided
for. Notwithstanding the foregoing, such certificate may state that it is given
without prejudice to any rights of the Borrower against third parties for any
claims or for the payment of any amount not then due and payable which exists at
the date of such certificate or which may subsequently exist. At the time
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such certificate is delivered to the Trustee, moneys remaining in the
Construction Fund, including any earnings resulting from the investment of such
moneys, shall be used as provided in Section 6.06 of the Indenture.
SECTION 5.4 Maintenance and Repair; Taxes; Utility and Other Charges.
The Borrower agrees to maintain, to the extent permitted by applicable law and
regulation, the Project, or cause the Project to be so maintained, during the
term of this Agreement (i) in as reasonably safe condition as its operations
shall permit and (ii) in good repair and in good operating condition, ordinary
wear and tear excepted, making from time to time all necessary repairs thereto
and renewals and replacements thereof.
The Borrower agrees to pay or cause to be paid during the term of
this Agreement all taxes, governmental charges of any kind lawfully assessed or
levied upon the Project or any part thereof, all utility and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of the Project
and all assessments and charges lawfully made by any governmental body for
public improvements that may be secured by a lien on the Project, provided that
with respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall be
obligated to pay only such installments as are required to be paid during the
term of this Agreement. The Borrower may, at the Borrower's expense and in the
Borrower's name, in good faith, contest any such taxes, assessments and other
charges and, in the event of any such contest, may permit the taxes, assessments
or other charges so contested to remain unpaid during that period of such
contest and any appeal therefrom unless by such nonpayment the Project or any
part thereof will be subject to loss or forfeiture.
The Borrower agrees that it will keep, or cause to be kept, (i)
the Project insured against such risks and in such amounts as are consistent
with its insurance practices for similar types of facilities (which may include
self-insurance), and (ii) insurance against all direct or contingent loss or
liability for personal injury, death or property damage occasioned by the
operation of the Project, which insurance may include self-insurance and may be
a part of the policy or policies of insurance customarily maintained by the
Borrower in connection with its general property and liability insurance upon
all of the plants and properties operated by it (including such deductibles as
may be provided in said policies).
SECTION 5.5 Qualification in Nevada. The Borrower agrees that
throughout the term of this Agreement it, or any successor or assignee as
permitted by Section 5.2 hereof, will be qualified to do business in the State
of Nevada.
SECTION 5.6 No Warranty by the Issuer. The Issuer makes no warranty,
either express or implied, as to the Project or that it will be suitable for the
purposes of the Borrower or needs of the Borrower.
SECTION 5.7 Agreement as to Use of the Project. The Issuer and the
Borrower agree that the Issuer shall have no interest in the Project.
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SECTION 5.8 Notices and Certificates Required to be Delivered to the
Trustee. The Borrower hereby agrees to provide the Trustee with the following:
(a) Within one hundred twenty (120) days of the end of the fiscal
year of the Borrower, a certificate of an Authorized Borrower Representative to
the effect that (i) all payments have been made under this Agreement and that,
to the best of such Authorized Borrower Representative's knowledge, no Event of
Default or event or condition which with the passage of time or giving of notice
or both would constitute an Event of Default has occurred and is continuing and
(ii) audited financial statements of the Borrower for such Fiscal Year;
(b) Upon knowledge of an Event of Default under this Agreement or
the Indenture, notice of such Event of Default, such notice to include a
description of the nature of such event and what steps are being taken to remedy
such Event of Default; and
(c) Prompt written disclosure of any significant change known to
the Borrower that occurs which would adversely impact the Trustee's ability to
perform its duties under the Indenture, or of any conflicts which may result
because of other business dealings between the Trustee and the Borrower
(including, without limitation, removal or replacement of the Remarketing Agent,
if any).
SECTION 5.9 Borrower to Furnish Notice of Adjustments of Interest Rate
Periods. The Borrower is hereby granted the option to designate from time to
time changes in Rate Periods (and to rescind such changes) in the manner and to
the extent set forth in Section 2.03 of the Indenture. In the event the Borrower
elects to exercise any such option, the Borrower agrees that it shall cause
notices of adjustments of Rate Periods (or rescissions thereof) to be given to
the Issuer, the Trustee and the Remarketing Agent in accordance with Section
2.03 of the Indenture. The exercise of any such option, and all actions in
connection therewith, may be taken by the Borrower through agents acting on its
behalf, as provided in the Indenture, including without limitation, the
Remarketing Agent. In connection with any change in Rate Periods, if the
Indenture requires an opinion of Bond Counsel as a condition thereto, the
Borrower shall, at its sole expense, cause such opinion to be delivered to the
Issuer and the Trustee in accordance with the Indenture.
SECTION 5.10 Information Reporting. The Issuer covenants and agrees
that, upon the direction of the Borrower or Bond Counsel, it will mail or cause
to be mailed to the Secretary of the Treasury (or his designee as prescribed by
regulation, currently the Internal Revenue Service Center, Philadelphia, PA
19255) a statement setting forth the information required by Section 149(e) of
the Code, which statement shall be in the form of the Information Reporting
Statement (Form 8038) of the Internal Revenue Service (or any successor form as
may be necessary from time to time with respect to any Tax-Exempt Series of
Bonds).
SECTION 5.11 Tax Covenants; Rebate. The provisions of this Section 5.11
shall apply only to the Series 1999A Bonds, or all or any portion of the Series
1999B Bonds, after they have been converted to Tax-Exempt status.
(a) The Borrower covenants that it will not take any action which
would adversely affect the Tax-Exempt status of any of the Bonds of a Tax-Exempt
Series, and will take, or require to be taken, such acts as may be reasonably
within its ability and as may from time to time be required under applicable law
or regulation to continue such Tax-Exempt status
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of such Bonds of a Tax-Exempt Series; and, in furtherance of such covenants, the
Borrower agrees to comply with the Tax Certificate and the Engineering
Certificate.
(b) The Borrower covenants that it will not take any action or
fail to take any action with respect to the Bonds of a Tax-Exempt Series which
would cause any of the Bonds of a Tax-Exempt Series to be "arbitrage bonds"
within the meaning of Section 148 of the Code.
(c) The Borrower covenants that it will not use or permit the use
of any property financed with the proceeds of any of the Bonds of a Tax-Exempt
Series by any person (other than a state or local governmental unit) in such
manner or to such extent as would result in loss of the Tax-Exempt status of any
of the Bonds of a Tax-Exempt Series.
(d) The Borrower shall calculate, or cause to be calculated, its
rebate liability at such times as are required by Section 148(f) of the Code and
any temporary, proposed or final Regulations as may be applicable to such Bonds
of a Tax-Exempt Series from time to time. The Borrower shall provide to the
Trustee a copy of each calculation of rebate liability prepared by or on behalf
of the Borrower, which documentation shall be made available to the Issuer upon
request. The Borrower shall make any and all payments to the Trustee for deposit
in the Rebate Fund, or as otherwise required to be made to the United States
Department of the Treasury in connection with any of the Bonds of a Tax-Exempt
Series pursuant to Section 148(f) of the Code.
(e) Notwithstanding any other provisions of this Agreement to the
contrary, so long as necessary in order to maintain the Tax-Exempt status of any
of the Bonds of a Tax-Exempt Series, the covenants in this Section 5.11 shall
survive the payment for such Bonds of a Tax-Exempt Series and the interest
thereon, including any payment or defeasance thereof pursuant to Section 8.01 of
the Indenture.
SECTION 5.12 [Reserved].
SECTION 5.13 Continuing Disclosure. The Borrower shall undertake the
continuing disclosure requirements promulgated under S.E.C. Rule 15c2-12, as it
may from time to time hereafter be amended or supplemented, if applicable, and
the Issuer shall have no liability to the holders of the Bonds or any other
person with respect to such disclosure matters. Notwithstanding any other
provision of the Indenture, failure of the Borrower to comply with the
requirements of S.E.C. Rule 15c2-12, as it may from time to time hereafter be
amended or supplemented, shall not be considered an Event of Default; however,
the Trustee, subject to Article X of the Indenture, may (and, at the request of
the Remarketing Agent or the holders of at least 25% in aggregate principal
amount of Outstanding Bonds, shall) or any Bondholder or beneficial owner of any
Bonds may take such actions as may be necessary and appropriate, including
seeking mandate or specific performance by court order, to cause the Borrower to
comply with its obligations under this Section 5.13.
SECTION 5.14 Alternate Liquidity Facility. The Borrower may deposit
with the Trustee an Alternate Liquidity Facility, in lieu of keeping the
Liquidity Facility in place as may be required by Section 5.15 hereof.
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Upon deposit with the Trustee, an Alternate Liquidity Facility
must meet the following conditions:
(a) the Alternate Liquidity Facility must be approved by the
Issuer or any successors and assigns;
(b) provisions of the Alternate Liquidity Facility must be
acceptable to the Bond Insurer and the Trustee;
(c) the term of the Alternate Liquidity Facility must extend at
least 364 days or to at least the first date on which the related Series of
Bonds is subject to redemption, pursuant to the Indenture, whichever is longer;
and
(d) the Alternate Liquidity Facility must be in an amount
sufficient to pay the purchase price of any Bonds purchased pursuant to Article
IV of the Indenture.
Not less than thirty (30) days prior to the delivery of an
Alternate Liquidity Facility, the Borrower shall (i) deliver to the Trustee and
the Remarketing Agent a written commitment for the delivery of such Alternate
Liquidity Facility, (ii) inform the Trustee and the Remarketing Agent of the
date on which the Alternate Liquidity Facility will become effective, which date
shall not be less than five (5) calendar days prior to the stated expiration
date of the existing Liquidity Facility and (iii) inform the Trustee of the
rating expected to apply to the applicable Series of Bonds after the related
Alternate Liquidity Facility is delivered. On or prior to the date of the
delivery of an Alternate Liquidity Facility to the Trustee, the Borrower shall
cause to be furnished to the Trustee (i) an opinion of Bond Counsel to the
effect that the delivery of such Alternate Liquidity Facility to the Trustee is
authorized under the Indenture and complies with the terms hereof and will not
adversely affect the Tax-Exempt status of any Tax-Exempt Bonds, (ii) an opinion
to the effect that the Alternate Liquidity Facility is exempt from registration
under the Securities Act of 1933, as amended, and is enforceable in accordance
with the terms of such Alternate Liquidity Facility, except to the extent that
enforceability thereof may be limited by bankruptcy, reorganization or similar
laws limiting the enforceability of creditors' rights generally and except that
no opinion need be expressed as to the availability of any discretionary
equitable rights, and (iii) written evidence from each Rating Agency then rating
the Bonds that following the delivery of such Alternate Liquidity Facility the
rating on the related Series of Bonds shall not be lower than A-1 or P-1, as
applicable, or the current rating from such Rating Agency will not be reduced or
withdrawn.
SECTION 5.15 Bond Insurance, Liquidity Facility. Subject to Section
5.14 hereof and except as may be permitted under the Indenture, the Borrower
agrees that throughout the term of this Agreement it, or any successor or
assignee as permitted by Section 5.2 hereof, will maintain or cause to be
maintained (i) the Bond Insurance for each Series of Bonds and (ii) a Liquidity
Facility with respect to Series 1999B Bonds and any Tax-Exempt Series of Bonds
created upon conversion of such Series 1999B Bonds. Notwithstanding the
foregoing, if any Tax-Exempt Series of Bonds or the Series 1999B Bonds are fixed
in a Term Rate Period or Taxable Term Rate Period ending on the maturity date
for such Bonds, no Liquidity Facility need be maintained with respect to such
Bonds. At any time the Borrower may, at its option, provide for the delivery to
the Trustee of an Alternate Liquidity Facility and the Borrower shall, in any
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event, cause to be delivered an Alternate Liquidity Facility at least five (5)
days before the expiration date of any existing Liquidity Facility, unless
otherwise permitted by the Indenture, or any existing Alternate Liquidity
Facility.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1 Events of Default Defined. The following events shall be
Events of Default under this Agreement, and the terms "Event of Default" or
"Events of Default" shall mean, whenever they are used in this Agreement, any
one or more of the following events:
(a) Failure by the Borrower to pay when due any amounts required
to be paid under Section 4.2(a) or 4.2(b) hereof; or
(b) Failure by the Borrower to observe and perform any covenant,
condition or agreement on its part to be observed or performed in this
Agreement, other than as referred to in (a) above, for a period of ninety (90)
days after written notice, specifying such failure and requesting that it be
remedied and stating that such notice is a "Notice of Default" hereunder, given
to the Borrower by the Trustee or to the Borrower and the Trustee by the Issuer,
unless the Issuer and the Trustee shall agree in writing to an extension of such
time prior to its expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, the Issuer and the
Trustee will not unreasonably withhold their consent to an extension of such
time if corrective action is instituted within the applicable period and
diligently pursued until the failure is corrected and the fact of such
non-correction, corrective action or diligent pursuit is evidenced to the
Trustee by a certificate of an Authorized Borrower Representative; or
(c) A proceeding or case shall be commenced, without the
application or consent of the Borrower, in any court of competent jurisdiction
seeking (i) liquidation, reorganization, dissolution, winding-up or composition
or adjustment of debts, (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of the Borrower or of all or any substantial part of its
assets, or (iii) similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
and such proceeding or cause shall continue undismissed, or an order, judgment,
or decree approving or ordering any of the foregoing shall be entered and shall
continue in effect for a period of ninety (90) days; or an order for relief
against the Borrower shall be entered against the Borrower in an involuntary
case under the United States Bankruptcy Code (as now or hereafter in effect) or
other applicable law; or
(d) The Borrower shall admit in writing its inability to pay its
debts generally as they become due or shall file a petition in voluntary
bankruptcy or shall make any general assignment for the benefit of its
creditors, or shall consent to the appointment of a receiver or trustee of all
or substantially all of its property, or shall commence a voluntary case under
the United States Bankruptcy Code (as now or hereafter in effect), or shall file
in any court of competent jurisdiction a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, or shall fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition
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filed against it in an involuntary case under such United States Bankruptcy Code
or other applicable law; or
(e) Dissolution or liquidation of the Borrower; provided that the
term "dissolution or liquidation of the Borrower" shall not be construed to
include the cessation of the corporate existence of the Borrower resulting
either from a merger or consolidation of the Borrower into or with another
corporation or a dissolution or liquidation of the Borrower following a transfer
of all or substantially all of its assets as an entirety, under the conditions
permitting such actions contained in Section 5.2 hereof; or
(f) The occurrence of an "Event of Default" under the Indenture
(other than an Event of Default described in Section 9.01(e) thereof); or
(g) Receipt by the Trustee from the Bond Insurer of notice of the
occurrence of an "Event of Default" under the Insurance Agreement dated as of
October 1, 1999, between the Borrower and the Bond Insurer, as the same may be
amended from time to time.
The foregoing provisions of Section 6.1(b) are subject to the
following limitations: If by reason of Force Majeure the Borrower is unable in
whole or in part to carry out its agreements on its part herein contained other
than the obligations on the part of the Borrower contained in Article IV and
Section 6.4 hereof the Borrower shall not be deemed in default during the
continuance of such inability. The Borrower agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing the Borrower from carrying
out its agreements; provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Borrower
and the Borrower shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is in the sole judgment of the Borrower
unfavorable to the Borrower.
SECTION 6.2 Remedies on Default. Subject to the rights of the Bond
Insurer, whenever any Event of Default referred to in Section 6.1 hereof shall
have occurred and be continuing,
(a) The Trustee may, and upon the written request of the Owners
of not less than a majority in aggregate principal amount of Bonds then
Outstanding shall, by notice in writing to the Borrower declare the unpaid
indebtedness under Section 4.2(a) hereof to be due and payable immediately, if
concurrently with or prior to such notice the unpaid principal amount of the
Bonds shall have been declared to be due and payable, and upon any such
declaration the same (being an amount sufficient, together with other moneys
available therefor in the Bond Fund, to pay the unpaid principal of and premium,
if any, and interest accrued on the Bonds) shall become and shall be immediately
due and payable as liquidated damages.
(b) The Issuer or the Trustee may take whatever action at law or
in equity may appear necessary or desirable to collect the payments and other
amounts then due and thereafter to become due hereunder or to enforce
performance and observance of any obligation, agreement or covenant of the
Borrower hereunder; provided, however, that nothing in Section 4.4 hereof shall
be deemed to limit the rights of the Issuer under this Section 6.2(b); provided,
nevertheless,
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that the Issuer will not exercise any remedies, with respect to any of the
Issuer's rights assigned to the Trustee pursuant to Section 4.4 hereof unless,
in the Issuer's reasonable judgment and after written request to a Responsible
Officer of the Trustee, the Trustee has failed to enforce such rights. The
Issuer has no obligation to take any action under this Section.
(c) The Trustee shall immediately draw upon any Bond Insurance
and Liquidity Facility, if any, if permitted by the terms thereof and required
by the terms of the Indenture, and apply the amount so drawn in accordance with
the Indenture and may exercise any remedy available to it thereunder.
The provisions of clause (a) of the preceding paragraph are
subject to the condition that if, at any time after the unpaid indebtedness
under Section 4.2(a) hereof shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, there shall have been deposited
with the Trustee a sum sufficient to pay all the principal of the Bonds matured
prior to such declaration and all matured installments of interest (if any) upon
all the Bonds, with interest on such overdue installments of principal as
provided herein, and the reasonable expenses of the Trustee and the Issuer, and
any and all other defaults known to the Trustee (other than in the payment of
principal of and interest on the Bonds due and payable solely by reason of such
declaration) shall have been made good or cured to the satisfaction of the
Trustee or provision deemed by the Trustee to be adequate shall have been made
therefor, then, and in every such case the Trustee shall, on behalf of the
Owners of all the Bonds, rescind and annul such declaration and its consequences
and waive such default; provided that no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair or exhaust any
right or power consequent thereon.
In case the Trustee or the Issuer, as the case may be, shall have
proceeded to enforce its rights under this Agreement, and such proceedings shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Trustee or the Issuer, then, and in every such case, the
Borrower, the Trustee and the Issuer shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of
the Borrower, the Trustee and the Issuer shall continue as though no such action
had been taken.
Any amounts collected pursuant to action taken under this Section
6.2 shall be paid into the Bond Fund (unless otherwise provided in this
Agreement) and applied in accordance with the provisions of the Indenture. No
action taken pursuant to this Section 6.2 shall relieve the Borrower from the
Borrower's obligations pursuant to Section 4.2 hereof.
No recourse shall be had for any claim based on this Agreement
against any officer, director or stockholder, past, present or future, of the
Borrower as such, either directly or through the Borrower, under any
constitutional provision, statute or rule of law, or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise.
Nothing herein contained shall be construed to prevent the Issuer
from enforcing directly any of its rights under Section 5.1 hereof and under
Sections 4.2(d), 4.2(e), 4.2(h) and 6.4 hereof.
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In case proceedings shall be pending for the bankruptcy or for
the reorganization of the Borrower under the federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been appointed
for the property of the Borrower or in the case of any other similar judicial
proceedings relative to the Borrower, or the creditors or property of the
Borrower, then the Trustee shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or claims for the whole
amount owing and unpaid pursuant to this Agreement and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee allowed in
such judicial proceedings relative to the Borrower, its creditors or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute such amounts as provided in
the Indenture after the deduction of its reasonable charges and expenses. Any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized to make such payments to the Trustee, and to pay to the Trustee any
amount due if for reasonable compensation and expenses, including reasonable
expenses and fees of counsel incurred by it up to the date of such distribution.
Anything in this Agreement to the contrary notwithstanding, upon
the occurrence and continuance of an Event of Default other than an Insurer
Default, the Bond Insurer shall be entitled to control and direct the
enforcement of all rights and remedies granted to the Issuer, the Bondholders or
the Trustee for the benefit of the Bondholders hereunder, including, without
limitation: (i) the right to accelerate the payment of the indebtedness of the
Borrower hereunder as described herein, and (ii) the right to annul any
declaration of acceleration, and the Bond Insurer shall also be entitled to
approve all waivers of Events of Default hereunder.
SECTION 6.3 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Issuer or the Trustee is intended to be exclusive of any other
available remedy or 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 hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Issuer or the Trustee to exercise any remedy
reserved to it in this Article, it shall not be necessary to give any notice,
other than such notice as may be herein expressly required. Such rights and
remedies as are given the Issuer hereunder shall also extend to the Trustee and
the Owners of the Bonds, subject to the provisions of the Indenture, and the
Trustee and Owners of the Bonds shall be entitled to the benefit of all
covenants and agreements herein contained.
SECTION 6.4 Agreement to Pay Fees and Expenses of Counsel. In the event
the Borrower should default under any of the provisions of this Agreement and
the Issuer or the Trustee should employ Counsel or incur other expenses for the
collection of the indebtedness hereunder or the enforcement of performance or
observance of any obligation or agreement on the part of the Borrower herein
contained, the Borrower agrees that it will on demand therefor pay to the
Trustee, the Issuer or, if so directed by the Issuer, to the Counsel for the
Issuer, the reasonable fees of such Counsel and such other reasonable expenses
so incurred by or on behalf of the Issuer or the Trustee. If the circumstances
set forth in this Section 6.4 shall occur with the result that the Borrower is
obligated to make payments to the Trustee under this Section 6.4, and so long as
such obligation shall be continuing, in order to secure such obligation of the
Borrower
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to the Trustee, the Trustee shall have a lien prior to the Bonds on all moneys
held by the Trustee under the Indenture except those moneys held in trust to pay
the principal of and premium, if any, and interest on, or the purchase price of,
particular Bonds and except for moneys, if any, in the Rebate Fund. If the
Trustee incurs fees and expenses in connection with a default specified in
Section 6.1(c), 6.1(d) or 6.1(e) of this Agreement, such fees and expenses are
understood to include expenses of administration under any bankruptcy law.
SECTION 6.5 No Additional Waiver Implied by One Waiver; Consents to
Waivers. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder. No waiver shall be effective unless in writing
and signed by the party making the waiver. The Issuer shall have no power to
waive any default hereunder by the Borrower without the consent of the Trustee.
The Trustee shall have power to waive any default by the Borrower hereunder,
except a default under Sections 4.2(d), 4.2(e), 4.2(h) or 6.4, without the prior
written concurrence of the Issuer.
ARTICLE VII
OPTION AND OBLIGATION OF BORROWER TO PREPAY
SECTION 7.1 Option to Prepay. The Borrower shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part at
any time or from time to time (a) to provide for the redemption of the Bonds
pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to provide
for the defeasance of the Bonds pursuant to Article VIII of the Indenture. In
the event the Borrower elects to provide for the redemption of Bonds as
permitted by this Section, the Borrower shall notify and instruct the Trustee in
accordance with Section 7.3 hereof to redeem all or any portion of the Bonds in
advance of maturity.
SECTION 7.2 Obligation to Prepay. The Borrower shall be obligated to
prepay amounts due hereunder, in whole or in part, to provide for the redemption
of Bonds in whole or in part pursuant to the provisions of Section 3.01(B) of
the Indenture. In the case of any of the events stated in Section 3.01(B) of the
Indenture, the Borrower must satisfy its obligation by prepaying within 180 days
after such event.
SECTION 7.3 Notice of Prepayment; Amount to be Prepaid. (a) In order to
exercise the option granted to the Borrower in Section 7.1 hereof, or fulfill an
obligation described in Section 7.2 hereof, the Borrower shall give at least 30
days written notice of such prepayment to the Issuer, the Trustee and the
Remarketing Agent, if any. On the date fixed for redemption of the Bonds or
portions thereof, there shall be deposited with the Trustee from payments by the
Borrower as required by Section 7.l or 7.2, as appropriate, for payment into the
Bond Fund the amount required in subsection (b) of this Section. The notice
shall provide for the date of the application of the prepayment made by the
Borrower hereunder to the redemption of the Bonds or portions thereof in whole
or in part pursuant to call for redemption, shall specify the redemption date
and shall be given to the Trustee, the Issuer and the Remarketing Agent in
accordance with the provisions of the Indenture for the redemption of Bonds or
portions thereof.
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(b) The prepayment payable by the Borrower hereunder upon either
(i) the exercise of the option granted to the Borrower in Section 7.1 hereof, or
(ii) the fulfillment of an obligation specified in Section 7.2 shall be, to the
extent applicable and except as otherwise provided in Article VIII of the
Indenture, the sum of the following:
(1) the amount of money which, when added to the amount on
deposit in the Bond Fund prior to the prepayment being made and
available for such purpose, will be sufficient to provide all funds
necessary to redeem the Bonds or portions thereof designated in the
notice specified in subsection (a) of this Section to be redeemed on
the date set forth in the notice, including, without limitation,
principal, premium, if any, and all interest to accrue to said
redemption date and redemption expenses; plus
(2) in the event all of the Bonds are to be redeemed, an
amount of money equal to all Administrative Expenses and the Trustee's
and the Remarketing Agent's fees and expenses under the Indenture
accrued and to accrue until the final payment and redemption of the
Bonds.
(c) Any prepayment made pursuant to Section 7.1 or 7.2 hereof
shall be deposited into the Bond Fund. No prepayment or investment of the
proceeds thereof shall be made which shall cause any Tax-Exempt Series of Bonds
to be "arbitrage bonds" within the meaning of Section 148(a) of the Code.
SECTION 7.4 Cancellation at Expiration of Term. At the acceleration,
termination or expiration of the term of this Agreement and following full
payment of the Bonds or provision for payment thereof and of all other fees and
charges having been made in accordance with the provisions of this Agreement and
the Indenture, the Issuer shall deliver to the Borrower any documents and take
or cause the Trustee to take such actions as may be necessary to effectuate the
cancellation and evidence the termination of this Agreement.
ARTICLE VIII
NON-LIABILITY OF ISSUER
SECTION 8.1 Non-Liability of the Issuer. The Issuer shall not be
obligated to pay the principal of, or premium, if any, or interest on the Bonds,
except from Revenues or the proceeds of Bond Insurance, and shall not be
obligated to pay the purchase price of any Bonds, except from the proceeds of
the remarketing of the Bonds or from moneys paid by the Borrower pursuant to
Section 4.2(b) hereof. The Borrower hereby acknowledges that the Issuer's sole
source of moneys to repay the Bonds will be provided by the payments made by the
Borrower pursuant to this Agreement, together with other Revenues and the
proceeds of Bond Insurance, including investment income on certain funds and
accounts held by the Trustee under the Indenture, and hereby agrees that if the
payments to be made hereunder shall ever prove insufficient to pay all principal
of, and premium, if any, and interest on the Bonds as the same shall become due
(whether by maturity, redemption, acceleration or otherwise), then upon notice
from the Trustee, the Borrower shall pay such amounts as are required from time
to time to prevent any deficiency or default in the payment of such principal,
premium or interest.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Notices. All notices, certificates or other communications
shall be sufficiently given in writing and shall be deemed given on the day on
which the same have been mailed by certified mail, postage prepaid, addressed as
set forth in Section 13.06 of the Indenture. A duplicate copy of each notice,
certificate or other communication given hereunder by either the Issuer or the
Borrower to the other shall also be given to the Trustee. The Issuer, the
Borrower, the Trustee, the Bond Insurer, the Remarketing Agent, if any, and the
Liquidity Provider, if any, may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates or
other communications shall be sent.
SECTION 9.2 Assignments. This Agreement may not be assigned by either
party without consent of the other, except that (i) the Issuer shall assign to
the Trustee its rights under this Agreement (except under Sections 4.2(d),
4.2(e), 4.2(h) and 6.4 hereof and rights of the Issuer to make inspections or to
receive any notices, certificates, requests, requisitions or communications
hereunder and to give consent hereunder) as provided by Section 4.4 hereof, and
(ii) the Borrower may assign its rights under this Agreement as provided by
Section 5.2 hereof.
SECTION 9.3 Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.
SECTION 9.4 Execution of Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument;
provided, however, that for purposes of perfecting a security interest in this
Agreement by the Trustee, only the counterpart delivered, pledged and assigned
to the Trustee shall be deemed the original.
SECTION 9.5 Amounts Remaining in Bond Fund. It is agreed by the parties
hereto that after payment in full of (i) the Bonds (or provision for payment
thereof having been made in accordance with the provisions of the Indenture),
(ii) the fees, charges and expenses of the Trustee in accordance with the
Indenture, (iii) the Administrative Expenses of the Issuer, (iv) the fees and
expenses of the Remarketing Agent, and (v) all other amounts required to be paid
under this Agreement and the Indenture, any amounts remaining in the Bond Fund
shall belong to and be paid to the Borrower by the Trustee. Notwithstanding any
other provision of this Agreement or the Indenture, under no circumstances shall
proceeds of Bond Insurance, the Liquidity Facility, or remarketing proceeds be
paid to the Issuer or the Borrower.
SECTION 9.6 Amendments, Changes and Modifications. This Agreement may
be amended, changed, modified, altered or terminated only by written instrument
executed by the Issuer and the Borrower, and only if the written consent thereto
of the Trustee or, if applicable, the Bond Insurer or the Owners of the
requisite percentage in aggregate principal amount of the Bonds, is obtained in
accordance with Article XII of the Indenture.
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SECTION 9.7 Governing Law. This Agreement shall be governed exclusively
by and construed in accordance with the applicable laws of the State of Nevada.
SECTION 9.8 Authorized Issuer and Borrower Representatives. Whenever
under the provisions of this Agreement the approval of the Issuer or the
Borrower is required to take some action at the request of the other, such
approval or such request shall be given for the Issuer by the Authorized Issuer
Representative and for the Borrower by the Authorized Borrower Representative,
and the other party hereto and the Trustee shall be authorized to act on any
such approval or request and neither party hereto shall have any complaint
against the other or against the Trustee as a result of any such action taken.
SECTION 9.9 Term of the Agreement. This Agreement shall be in full
force and effect from its date to and including such date as all of the Bonds
issued under the Indenture shall have been fully paid or retired (or provision
for such payment shall have been made as provided in the Indenture) and all
other fees and expenses shall have been paid pursuant to this Agreement or the
Indenture, provided that all representations and certifications by the Borrower
as to all matters affecting the Tax-Exempt status of interest on any Tax-Exempt
Series of Bonds and the covenants of the Borrower in Sections 4.2(c), 4.2(d),
4.2(e), 4.2(h), 5.11 and 6.4 hereof shall survive the termination of this
Agreement.
SECTION 9.10 Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Issuer, the Borrower and their respective
successors and assigns; subject, however, to the limitations contained in
Section 5.2 hereof.
SECTION 9.11 Trustee as a Party in Interest and Third Party
Beneficiary. The parties hereto acknowledge and agree that as to any right to
indemnity or payment of fees and expenses provided in Section 4.2 hereof the
Trustee is a party in interest and third party beneficiary under this Agreement
entitled to enforce its rights as so stated herein as if it were a party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
▇▇▇▇▇ COUNTY, NEVADA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Chair, Board of County Commissioners
(SEAL)
Attest:
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
County Clerk
SOUTHWEST GAS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Authorized Borrower Representative
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EXHIBIT A
DESCRIPTION OF THE PROJECT
--------------------------
The Project consists of the Company's construction program with respect
to the following capital additions, improvements and equipment located in ▇▇▇▇▇
County, Nevada:
The Distribution Facilities
---------------------------
The Project includes Distribution Facilities consisting of the meters,
customer service connections, mains, pressure regulators, and other additions,
improvements, replacements of obsolete, damaged or worn out components, and
relocations and enhancements of existing components to the lower-pressure (under
500 psig) gas distribution facilities by which the Company furnishes gas to
customers within its retail service area in ▇▇▇▇▇ County, Nevada, together with
additions, relocations and improvements to the Company's other plant, property
and equipment to be acquired, installed, or constructed by the Company for use
in connection therewith, for the same purposes.
Transmission Facilities
-----------------------
The Project also includes Transmission Facilities consisting of the
pressure regulators, mains, compressor facilities and other additions and
improvements to the Company's higher-pressure (500 psig and over) gas
transmission facilities by which it transports gas within its retail service
area in ▇▇▇▇▇ County, Nevada, together with additions and improvements to the
Company's other plant, property and equipment to be acquired, installed, or
constructed by the Company for use in connection therewith, for the same
purposes.
Included in the foregoing Facilities are associated land and land
rights and such modifications' additions and supplements or changes to the
Facilities as may prove necessary or desirable for the same purposes.
A-1