[EXECUTION COPY]
Exhibit 10.5
-----------------------------------------------------
$350,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 22, 2004,
Among
NEVADA POWER COMPANY
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
UNION BANK OF CALIFORNIA, N.A.
as Administrative Agent
and
THE BANK OF NOVA SCOTIA
as Syndication Agent
and
WESTLB AG
as Documentation Agent
----------------------------------------------------
UNION BANK OF CALIFORNIA, N.A.
as Sole Lead Arranger
TABLE OF CONTENTS
SECTION PAGE
PRELIMINARY STATEMENTS............................................................................. 1
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.......................................... 1
SECTION 1.01. Certain Defined Terms............................................... 1
SECTION 1.02. Computation of Time Periods; Construction........................... 27
SECTION 1.03. Accounting Terms.................................................... 28
ARTICLE II COMMITMENTS............................................................... 28
SECTION 2.01. The Commitments..................................................... 28
SECTION 2.02. Fees................................................................ 28
SECTION 2.03. Reduction of the Commitments........................................ 29
SECTION 2.04. Computations of Outstandings........................................ 29
ARTICLE III LOANS..................................................................... 29
SECTION 3.01. Loans............................................................... 29
SECTION 3.02. Conversion of Loans................................................. 31
SECTION 3.03. Interest Periods.................................................... 31
SECTION 3.04. Other Terms Relating to the Making and
Conversion of Loans................................................. 31
SECTION 3.05. Repayment of Loans; Interest........................................ 34
SECTION 3.06. Additional Interest on Eurodollar Rate Loans........................ 34
SECTION 3.07. New Banks........................................................... 35
ARTICLE IV LETTERS OF CREDIT......................................................... 35
SECTION 4.01. Issuing Banks....................................................... 35
SECTION 4.02. Letters of Credit................................................... 35
SECTION 4.03. Issuing Bank Fees................................................... 36
SECTION 4.04. Reimbursement to Issuing Banks...................................... 36
SECTION 4.05. Obligations Absolute................................................ 38
SECTION 4.06. Liability of Issuing Banks and the Lenders.......................... 38
ARTICLE V PAYMENTS, COMPUTATIONS AND YIELD PROTECTION............................... 39
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SECTION 5.01. Payments and Computations........................................... 39
SECTION 5.02. Interest Rate Determination......................................... 41
SECTION 5.03. Prepayments......................................................... 41
SECTION 5.04. Yield Protection.................................................... 41
SECTION 5.05. Sharing of Payments, Etc............................................ 43
SECTION 5.06. Taxes............................................................... 44
ARTICLE VI CONDITIONS PRECEDENT...................................................... 46
SECTION 6.01. Conditions Precedent to Effectiveness of this
Agreement........................................................... 46
SECTION 6.02. Conditions Precedent to Each Extension of Credit.................... 48
SECTION 6.03. Determinations Under Section 6.01................................... 48
SECTION 6.04. Reliance on Certificates............................................ 49
ARTICLE VII REPRESENTATIONS AND WARRANTIES............................................ 49
SECTION 7.01. Representations and Warranties of the Borrower...................... 49
ARTICLE VIII COVENANTS OF THE BORROWER................................................. 54
SECTION 8.01. Affirmative Covenants............................................... 54
SECTION 8.02. Negative Covenants.................................................. 57
SECTION 8.03. Financial Covenants................................................. 69
ARTICLE IX DEFAULTS.................................................................. 70
SECTION 9.01. Events of Default................................................... 70
SECTION 9.02. Remedies............................................................ 72
ARTICLE X THE ADMINISTRATIVE AGENT.................................................. 73
SECTION 10.01. Authorization and Action............................................ 73
SECTION 10.02. Indemnification..................................................... 75
ARTICLE XI MISCELLANEOUS............................................................. 76
SECTION 11.01. Amendments, Etc..................................................... 76
SECTION 11.02. Notices, Etc........................................................ 76
SECTION 11.03. No Waiver of Remedies............................................... 77
SECTION 11.04. Costs, Expenses and Indemnification................................. 77
SECTION 11.05. Right of Set-off.................................................... 78
SECTION 11.06. Binding Effect...................................................... 79
SECTION 11.07. Assignments and Participation....................................... 79
SECTION 11.08. Confidentiality..................................................... 83
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SECTION 11.09. Waiver of Jury Trial................................................ 84
SECTION 11.10. Governing Law; Submission to Jurisdiction........................... 84
SECTION 11.11. Relation of the Parties; No Beneficiary............................. 84
SECTION 11.12. Execution in Counterparts........................................... 85
SECTION 11.13. Survival of Agreement............................................... 85
SECTION 11.14. Patriot Act Notice.................................................. 85
Exhibits
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Notice of Conversion
EXHIBIT C - Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to the
Borrower
EXHIBIT D - Form of Opinion of ▇▇▇▇▇▇▇▇ and Wedge, Nevada counsel to the
Borrower
EXHIBIT E - Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special New York
counsel to the Administrative Agent
EXHIBIT F - Form of Lender Assignment
EXHIBIT G - Form of Officer's Certificate
EXHIBIT H - Form of Secretary's Certificate
Schedules
SCHEDULE 1.01A Commitments
SCHEDULE 1.01B Applicable Lending Offices
SCHEDULE 4.02(d) Existing Letters of Credit
SCHEDULE 7.01(b) Disclosed Matters
SCHEDULE 7.01(d) Consents, Authorizations, Filings and Notices
SCHEDULE 7.01(f) Material Litigation
SCHEDULE 7.01(g) Contractual Obligations
SCHEDULE 7.01(p) Subsidiaries
SCHEDULE 8.02(a)(ii) Existing Indebtedness
SCHEDULE 8.02(b)(vii) Liens
SCHEDULE 8.02(d) Scheduled Asset Sales
SCHEDULE 9.01(e)(ii) Certain Hedge Agreements
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 22, 2004
THIS AMENDED AND RESTATED CREDIT AGREEMENT is made by and among:
(i) Nevada Power Company, a Nevada corporation (the "BORROWER"),
(ii) the banks listed on the signature pages of this Agreement as
"Existing Banks" (the "EXISTING BANKS"), the banks listed on
the signature pages of this Agreement as "New Banks" (the "NEW
BANKS"; the Existing Banks and the New Banks being referred to
herein, collectively, as the "BANKS"), and the other Lenders
(as hereinafter defined) from time to time party hereto, and
(iii) Union Bank of California, N.A. ("UNION BANK"), as
administrative agent (in such capacity, together with its
successors and assigns in such capacity, the "ADMINISTRATIVE
AGENT") for the Lenders hereunder.
PRELIMINARY STATEMENTS
The Borrower, the Existing Banks and the Administrative Agent previously
entered into that certain Credit Agreement, dated as of October 8, 2004 (the
"EXISTING CREDIT AGREEMENT"). The parties hereto desire to amend and restate the
Existing Credit Agreement, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree that the Existing Credit
Agreement is hereby amended and restated in its entirety, without novation, as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ABR LOAN" means a Loan that bears interest as provided in Section
3.05(b)(i).
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"ACQUIRED DEBT" means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person, and (b) Indebtedness secured by a
Lien encumbering any asset acquired by such specified Person.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
preamble hereto.
"AFFILIATE" means, 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.
"AGREEMENT" means this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to
the greater of (a) the Reference Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any
change in the Alternate Base Rate due to a change in the Reference Rate or
the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Reference Rate or the Federal Funds
Effective Rate, respectively.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, (i)
such Lender's Domestic Lending Office, in the case of an ABR Loan, and
(ii) such Lender's Eurodollar Lending Office, in the case of a Eurodollar
Rate Loan.
"APPLICABLE MARGIN" means, for any day, with respect to any
Eurodollar Rate Loan or ABR Loan, as the case may be, the applicable
percentage per annum set forth below under the caption "Eurodollar Margin"
or "ABR Margin", respectively, based upon the ratings by S&P and ▇▇▇▇▇'▇
applicable on such date to the Index Debt:
Eurodollar ABR
Margin Margin
---------- --------
Category 1
BBB- or higher by S&P and 1.50% 0.50%
Baa3 or higher by ▇▇▇▇▇'▇
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Category 2
BB+ or higher by S&P and 1.75% 0.75%
Ba1 or higher by ▇▇▇▇▇'▇
Category 3
BB+ or higher by S&P or 1.875% 0.875%
Ba1 or higher by ▇▇▇▇▇'▇
and
BB or higher by S&P or
Ba2 or higher by ▇▇▇▇▇'▇
Category 4
BB or higher by S&P and 2.00% 1.00%
Ba2 or higher by ▇▇▇▇▇'▇
Category 5
BB- or higher by S&P and 2.50% 1.50%
Ba3 or higher by ▇▇▇▇▇'▇
Category 6
B+ or lower by S&P or 3.50% 2.50%
B1 or lower by ▇▇▇▇▇'▇
Notwithstanding the foregoing, each of the foregoing Applicable Margins
shall be increased by 2.00% per annum upon the occurrence and during the
continuance of an Event of Default.
For purposes of the foregoing, (A) if ▇▇▇▇▇'▇ or S&P shall not have in
effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating in
Category 6, (B) if more than one Category (other than Category 6) is
applicable at any one time, the Applicable Margin shall be based on the
applicable Category having the lowest number (i.e., Category 1 is lower
than Category 2), and (C) in the event that, and
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at all times during which, Category 6 is applicable, the Applicable Margin
shall be based on Category 6. The Applicable Margins shall be increased or
decreased in accordance with this definition upon any change in the
applicable ratings of the Index Debt, and such increased or decreased
Applicable Margins shall be effective from the date of announcement of any
such new ratings. The Borrower agrees to notify the Administrative Agent
promptly after each change in any rating of the Index Debt. If the rating
system of ▇▇▇▇▇'▇ or S&P shall change, or if any such rating agency shall
cease to be in the business of rating corporate debt obligations, the
Borrower and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the non-availability
of ratings from such rating agency and, pending the effectiveness of any
such amendment, the Applicable Margin shall be determined by reference to
the rating most recently in effect prior to such change or cessation.
"APPLICABLE RATE" means:
(i) in the case of each ABR Loan, a rate per annum equal at
all times to the sum of the Alternate Base Rate in effect from time
to time plus the Applicable Margin in effect from time to time; and
(ii) in the case of each Eurodollar Rate Loan comprising part
of the same Borrowing, a rate per annum during each Interest Period
equal at all times to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect from time to
time during such Interest Period.
"ASSET SALE" means (a) the sale, lease, conveyance or other
disposition of any assets or rights, other than sales of inventory in the
ordinary course of business consistent with past practices and (b) the
issuance of Equity Interests in any of the Borrower's Subsidiaries or the
sale of Equity Interests in any of its Subsidiaries. Notwithstanding the
preceding sentence, the following items will not be deemed to be Asset
Sales:
(i) any single transaction or series of related transactions
that involves assets having a fair market value of less than
$1,000,000;
(ii) a transfer of assets between or among the Borrower and
its Subsidiaries;
(iii) an issuance of Equity Interests by a Subsidiary to the
Borrower or to another Subsidiary;
(iv) a Restricted Payment or Permitted Investment that is
permitted by Section 8.02(e);
(v) sales, transfers or other dispositions of assets,
including Capital Stock of Subsidiaries, for consideration at least
equal to the fair market value of the assets sold or disposed of,
but only if the consideration received consists of Capital Stock of
a Person that becomes a Subsidiary engaged in, or property or assets
(other than cash, except to extent used as a bona fide means of
equalizing
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the value of the property or assets involved in the swap transaction) of a
nature or type or that are used in, a business of the Borrower and its
Subsidiaries existing on the date of such sale or other disposition;
provided, however, that the fair market value of the assets sold or
disposed of is determined as provided in the final paragraph of Section
8.02(e); and
(vi) transfers of assets by the Borrower and its Subsidiaries
required under statute or regulation in connection with renewable
energy contracts.
"ATTRIBUTABLE DEBT" means, with respect to any Sale and Leaseback
Transaction, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term
of the lease included in such Sale and Leaseback Transaction including any
period for which such lease has been extended or may, at the option of the
lessor, be extended. Such present value shall be calculated using a
discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP.
"AVAILABLE COMMITMENT" means, for each Lender on any day, the unused
portion of such Lender's Commitment, computed after giving effect to all
Extensions of Credit or prepayments to be made on such day and the
application of proceeds therefrom. "AVAILABLE COMMITMENTS" means the
aggregate of the Lenders' Available Commitments.
"BOARD" means the Board of Governors of the Federal Reserve System
of the United States of America (or any successor).
"BOARD OF DIRECTORS" means (a) with respect to a corporation, the
board of directors of the corporation, (b) with respect to a partnership,
the Board of Directors of the general partner of the partnership and (c)
with respect to any other Person, the board or committee of such Person
serving a similar function.
"BORROWER" has the meaning assigned to that term in the preamble
hereto.
"BORROWING" means a borrowing consisting of Loans of the same Type,
having the same Interest Period and made or Converted on the same day by
the Lenders, ratably in accordance with their respective Percentages. Any
Borrowing consisting of Loans of a particular Type may be referred to as
being a Borrowing of such "TYPE". All Loans of the same Type, having the
same Interest Period and made or Converted on the same day shall be deemed
a single Borrowing hereunder until repaid or next Converted.
"BUSINESS DAY" means (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 or Los Angeles, California 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 Rate Loans, any day which is a Business Day
described in clause (a) and which is also a day for trading by and between
banks in Dollar deposits in the interbank eurodollar market.
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"CAPITAL LEASE OBLIGATIONS" means, 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; 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" means 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" means (a) United States dollars, (b) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States
government (provided that the full faith and credit of the United States
is pledged in support of those securities) having maturities of not more
than one year from the date of acquisition, (c) certificates of deposit
and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case, with any
domestic commercial bank having capital and surplus in excess of
$500,000,000 and a Thomson Bank Watch Rating of "B" or better, (d)
repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications
specified in clause (c) above, (e) commercial paper having the highest
rating obtainable from ▇▇▇▇▇'▇ or S&P and in each case maturing within 270
days after the date of acquisition and (f) money market funds at least 95%
of the assets of which constitute Cash Equivalents of the kinds described
in clauses (a) through (e) of this definition.
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")) shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the "beneficial owner" (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 20% of the outstanding common stock of Sierra
Pacific Resources; (b) Sierra Pacific 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 Sierra Pacific 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.
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"CLOSING DATE" means the date upon which each of the conditions
precedent enumerated in Section 6.01 has been fulfilled to the
satisfaction of the Lenders, the Administrative Agent and the Borrower.
The Closing Date shall take place on or before October 22, 2004, at the
offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., or such other time and/or location as the
parties hereto may mutually agree.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITMENT" means, for each Lender, the obligation of such Lender
to make Loans to the Borrower and to participate in Extensions of Credit
resulting from the issuance or, pursuant to Section 4.02(d), deemed
issuance (or extension, modification or amendment) of any Letter of Credit
in an aggregate amount no greater than (i) the amount set forth opposite
such Lender's name on Schedule 1.01A hereto or (ii) if such Lender has
entered into one or more Lender Assignments, the amount set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 11.07(c), in each such case as such amount may be reduced from
time to time pursuant to Section 2.03. "COMMITMENTS" means the total of
the Lenders' Commitments hereunder. The Commitments shall in no event
exceed $350 million.
"COMMONLY CONTROLLED ENTITY" means 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.
"CONFIDENTIAL INFORMATION" has the meaning assigned to that term in
Section 11.08.
"CONSOLIDATED CAPITAL" means, at any date of determination, the sum
of (i) Consolidated Indebtedness, (ii) consolidated equity of the common
stockholders of the Borrower and its consolidated Subsidiaries, (iii)
trust-originated or partnership-originated preferred securities of the
Borrower and its consolidated Subsidiaries, (iv) consolidated equity of
the preference stockholders of the Borrower and its consolidated
Subsidiaries, and (v) consolidated equity of the preferred stockholders of
the Borrower and its consolidated Subsidiaries, in the case of clauses
(ii) through (v) above, determined at such date in accordance with GAAP.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus:
(a) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Subsidiaries in
connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
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(b) provision for taxes based on income or profits of such
Person and its Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(c) consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations), to the extent that any such
expense was deducted in computing such Consolidated Net Income; plus
(d) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period of such Person and its Subsidiaries) for such period to the
extent that such depreciation, amortization and other noncash
expenses were deducted in computing such Consolidated Net Income;
plus
(e) all extraordinary, unusual or non-recurring items of loss
or expense, to the extent that any such loss or expense was deducted
in computing such Consolidated Net Income; minus
(f) all extraordinary, unusual or non-recurring items of gain
or revenue, to the extent that any such gain or revenue was included
in computing such Consolidated Net Income; minus
(g) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary
course of business,
in each case, on a consolidated basis and determined in accordance with
GAAP; provided that non-cash expenses recorded as a result of deferred
energy accounting will not be added to Consolidated Net Income.
"CONSOLIDATED INDEBTEDNESS" means, at any date of determination,
without duplication, the aggregate Indebtedness of the Borrower and its
consolidated Subsidiaries; provided, however, that Consolidated
Indebtedness shall not include junior subordinated debentures issued by
the Borrower in connection with the issuance of (i) preferred trust
securities or trust-issued preferred securities by any Trust Preferred
Vehicle and (ii) other similar trust-originated preferred securities by
any Subsidiary of the Borrower, provided that (A) the issuer of such
preferred securities lends substantially all of the proceeds from such
issuance to the Borrower in exchange for such junior subordinated
debentures and (B) substantially all of the assets of such issuer consist
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solely of such junior subordinated debentures and payments made from time
to time in respect thereof.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, for any period, the
ratio of (i) Consolidated Cash Flow of the Borrower and its Subsidiaries
for such period (provided, that, solely for purposes of calculating the
Consolidated Interest Coverage Ratio, amortization of deferred energy
costs for such period as set forth in the Borrower's consolidated
statement(s) of cash flows shall be added to Consolidated Net Income) to
(ii) Consolidated Interest Expense for such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum,
without duplication, of:
(a) the consolidated interest expense of the Borrower and its
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations; plus
(b) the consolidated interest of the Borrower and its
Subsidiaries that was capitalized during such period; plus
(c) any interest expense on Indebtedness of another Person
that is Guaranteed by the Borrower or one of its Subsidiaries or
secured by a Lien on assets of the Borrower or one of its
Subsidiaries, whether or not such Guarantee or Lien is called upon.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (a) the Net Income (but not loss) of
any Person that is not a Subsidiary or that is accounted for by the equity
method of accounting will be included only to the extent of the amount of
dividends or distributions paid in cash to such Person or a Subsidiary of
such Person, (b) the Net Income of any Subsidiary will be excluded to the
extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of such Net Income is not at the date of
determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary or
its stockholders, (c) the cumulative effect of a change in accounting
principles will be excluded and (d) any equity in earnings or losses of
Sierra Pacific Resources will be excluded.
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"CONTRACTUAL OBLIGATION" means, 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.
"CONVERSION", "CONVERT" or "CONVERTED" refers to a conversion of
Loans of one Type into Loans of another Type, or to the selection of a
new, or the renewal of the same, Interest Period for Loans, as the case
may be, pursuant to Section 3.02.
"CREDIT FACILITIES" means one or more debt facilities or commercial
paper facilities (excluding the facilities provided under this Agreement),
in each case with banks or other institutional lenders providing for
revolving credit loans, term loans or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time, including any securities issued
pursuant to the General and Refunding Mortgage Indenture in order to
secure any amounts outstanding under a Credit Facility from time to time;
provided that the obligation of the Borrower to make any payment on any
such securities shall be:
(i) no greater than the amount required to be paid under such
Credit Facility that is secured by such payment obligation;
(ii) payable no earlier than the date on which such amount is
required to be paid under such Credit Facility; and
(iii) deemed to have been paid or otherwise satisfied and
discharged to the extent that the Borrower has paid such amount
under such Credit Facility;
provided further, that any amounts the Borrower is obligated to pay under
such securities will not be included for purposes of determining the
aggregate amount outstanding under Credit Facilities that is permitted
under clause (A) of Section 8.02(a)(ii).
"DEFAULT" means any of the events specified in Section 9.01, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"DEFAULT RATE" means a rate per annum equal at all times to the
Applicable Rate for an ABR Loan in effect from time to time.
"DISPOSITION" means, 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.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it
is exchangeable, in each case at the option of the holder of the Capital
Stock), or upon the happening of any event (other than as a result of an
optional redemption by the issuer thereof), matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder of the Capital Stock, in whole or
in part, on or prior to the date that is 91 days after the Final Maturity
Date. Notwithstanding
11
the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the holders of the Capital Stock have
the right to require the Borrower to repurchase such Capital Stock upon
the occurrence of a change of control or an asset sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that the
Borrower may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with Section
8.02(e).
"DOLLARS" and the sign "$" each means lawful money of the United
States.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the
office or Affiliate of such Lender specified as its "Domestic Lending
Office" opposite its name on Schedule 1.01B hereto or in the Lender
Assignment pursuant to which it became a Lender, or such other office or
Affiliate of such Lender as such Lender may from time to time specify in
writing to the Borrower and the Administrative Agent.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank or trust company
organized under the laws of the United States, or any State thereof; (b) a
commercial bank organized under the laws of any other country that is a
member of the OECD, or a political subdivision of any such country,
provided that such bank is acting through a branch or agency located in
the United States; (c) the central bank of any country that is a member of
the OECD; (d) any other commercial bank or other financial institution
engaged generally in the business of extending credit or purchasing debt
instruments; and (e) a Lender or an Affiliate of a Lender; provided,
however, that (A) any such Person described in clauses (a) through (e)
above shall also (i) have outstanding unsecured indebtedness that is rated
A- or better by S&P or A3 or better by Moody's (or an equivalent rating by
another nationally-recognized credit rating agency of similar standing if
neither of such corporations is then in the business of rating unsecured
indebtedness of entities engaged in such businesses) or (ii) have combined
capital and surplus (as established in its most recent report of condition
to its primary regulator) of not less than $250,000,000 (or its equivalent
in foreign currency), (B) any Person described in clause (b), (c), or (d)
above, shall, on the date on which it is to become a Lender hereunder, (1)
be entitled to receive payments hereunder without deduction or withholding
of any United States Federal income taxes (as contemplated by Section
5.06) and (2) not be incurring any losses, costs or expenses of the type
for which such Person could demand payment under Section 5.04(a) or (c)
(except to the extent that, in the absence of the making of an assignment
to such Person, the assigning Lender would have incurred an equal or
greater amount of such losses, costs or expenses and such losses, costs or
expenses would have been payable by the Borrower to such assigning Lender
hereunder), and (C) any Person described in clause (a), (b), (c), (d) or
(e) above that is not a Lender shall, in addition, be acceptable to each
Issuing Bank based upon its then-existing credit criteria.
"ENVIRONMENTAL LAWS" means 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
12
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 LIABILITY" means, with respect to any Person, any
liability, contingent or otherwise (including any liability for damages,
costs of environmental remediation, fines, penalties or indemnities), of
such Person or any of its Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal
of any Hazardous Substances, (c) exposure to any Hazardous Substances, (d)
the release or threatened release of any Hazardous Substances into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of
the foregoing.
"ENVIRONMENTAL PERMITS" means any and all permits, licenses,
approvals, registrations, notifications, exemptions and other
authorizations required under any Environmental Law.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board, as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the
office or Affiliate of such Lender specified as its "Eurodollar Lending
Office" opposite its name on Schedule 1.01B hereto or in the Lender
Assignment pursuant to which it became a Lender (or, if no such office or
Affiliate is specified, its Domestic Lending Office), or such other office
or Affiliate of such Lender as such Lender may from time to time specify
in writing to the Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, for each Interest Period for each
Eurodollar Rate Loan made as part of the same Borrowing, an interest rate
per annum (rounded upwards, if necessary, to the nearest whole multiple of
1/16 of 1%) equal to the rate at which Dollar deposits are offered for
such Interest Period as displayed on the Reuters Screen LIBO Page (or, if
such rate is not displayed on the Reuters Screen LIBO Page, then on the
Telerate Screen LIBO Page) at or about 9:00 A.M. (Los Angeles, California
time) two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of such Eurodollar Rate Loan and for a
period approximately equal to such Interest Period. If for any Interest
Period for a Eurodollar Rate Loan no such displayed rate is available, the
Administrative Agent shall determine such rate based on the average rate
at which the Administrative Agent is offered deposits in Dollars of such
duration and in the amount of $5,000,000 by prime banks in the London
interbank market as of approximately 11:00
▇▇
▇.▇. (▇▇▇▇▇▇, ▇▇▇▇▇▇▇ time) two Business Days before the commencement of
such Interest Period.
"EURODOLLAR RATE LOAN" means a Loan that bears interest as provided
in Section 3.05(b)(ii).
"EURODOLLAR RESERVE PERCENTAGE" of any Lender for each Interest
Period for each Eurodollar Rate Loan means the reserve percentage
applicable to such Lender during such Interest Period (or if more than one
such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under Regulation D or other regulations
issued from time to time by the Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) then applicable to such Lender with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
"EVENT OF DEFAULT" means any of the events specified in Section
9.01, provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"EVERGREEN LETTER OF CREDIT" means any Letter of Credit that, by its
terms, provides that it shall be automatically renewed or extended for a
stated period of time at the end of its then-scheduled expiration date
unless the applicable Issuing Bank notifies the beneficiary thereof prior
to such expiration date that such Issuing Bank elects not to renew or
extend such Letter of Credit.
"EXISTING BANKS" has the meaning assigned to that term in the
preamble hereto.
"EXISTING CREDIT AGREEMENT" has the meaning assigned to that term in
the Preliminary Statements hereto.
"EXISTING INDEBTEDNESS" means all Indebtedness of the Borrower and
its Subsidiaries (other than Indebtedness under the Loan Documents) in
existence on the Closing Date and listed on Schedule 8.02(a)(ii), until
such amounts are repaid.
"EXISTING LETTER OF CREDIT" means each of the letters of credit set
forth in Schedule 4.02(d) hereto and any other letter of credit issued by
an Issuing Bank (whether prior to or after the date hereof) for the
account of the Borrower pursuant to any agreement (other than this
Agreement) to which the Borrower is a party.
"EXTENSION OF CREDIT" means (i) the making of a Borrowing (including
any Conversion), (ii) the issuance (or, pursuant to Section 4.02(d),
deemed issuance) of a Letter of Credit, or (iii) the amendment of any
Letter of Credit having the effect of extending the stated termination
date thereof, increasing the LC Outstandings thereunder, or otherwise
altering any of the material terms or conditions thereof.
14
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%)
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 that is a Business Day,
the average (rounded upwards, if necessary, to the next 1/100 of 1%) of
the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by the Administrative Agent.
"FEE LETTER" has the meaning assigned to that term in Section
2.02(c).
"FINAL MATURITY DATE" means October 8, 2007.
"FIRST MORTGAGE INDENTURE" means the Indenture of Mortgage dated as
of October 1, 1953, from the Borrower to Deutsche Bank Trust Company
Americas, as trustee, as modified, amended or supplemented at any time or
from time to time by supplemental indentures.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person and its
Subsidiaries for such period to the Fixed Charges of such Person and its
Subsidiaries for such period. In the event that such Person or any of its
Subsidiaries incurs, assumes, Guarantees, repays, repurchases or redeems
any Indebtedness (other than ordinary working capital borrowings) or
issues, repurchases or redeems preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which
the calculation of the Fixed Charge Coverage Ratio is made (the
"CALCULATION DATE"), then the Fixed Charge Coverage Ratio will be
calculated giving pro forma effect to such incurrence, assumption,
Guarantee, repayment, repurchase or redemption of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period. In addition, for purposes of
calculating the Fixed Charge Coverage Ratio:
(a) acquisitions that have been made by such Person or any of
its Subsidiaries, including through mergers, consolidations or
otherwise (including acquisitions of assets used in a Permitted
Business) and including any related financing transactions, during
the four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date will be given pro
forma effect as if they had occurred on the first day of the
four-quarter reference period, including any pro forma expense and
cost reductions that have occurred or are reasonably expected to
occur, in the reasonable judgment of the chief financial officer of
the Borrower (regardless of whether those cost savings or operating
improvements could then be reflected in pro forma financial
statements in accordance with Regulation S-X promulgated under the
Securities Act of 1933, as
15
amended, or any other regulation or policy of the Securities and
Exchange Commission, or any successor agency, related thereto);
(b) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be
excluded; and
(c) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded, but
only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of such Person or any of its
Subsidiaries following the Calculation Date.
"FIXED CHARGES" means, with respect to any Person for any period,
the sum, without duplication, of:
(a) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations; plus
(b) the consolidated interest of such Person and its
Subsidiaries that was capitalized during such period; plus
(c) any interest expense on Indebtedness of another Person
that is Guaranteed by such Person or one of its Subsidiaries or
secured by a Lien on assets of such Person or one of its
Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus
(d) the product of (i) all dividends, whether paid or accrued
and whether or not in cash, on any series of preferred stock of such
Person or any of its Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Borrower (other
than Disqualified Stock) or to the Borrower or a Subsidiary of the
Borrower, times (ii) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP; plus
(e) all distributions by a Trust Preferred Vehicle to Persons
other than the Borrower of amounts received as interest by such
trust on the Subordinated Debt of the Borrower held by such trust.
16
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, except that, for
purposes of determining the Fixed Charge Coverage Ratio and for purposes
of the related definitions, GAAP shall be determined on the basis of such
principles in effect on the date hereof.
"G&R SERIES K MORTGAGE BOND" means the Borrower's General and
Refunding Mortgage Bond, Series K, due the Final Maturity Date, issued to
the Administrative Agent under the General and Refunding Mortgage
Indenture, in the principal amount of $350,000,000.
"GENERAL AND REFUNDING MORTGAGE INDENTURE" means 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" means the government of the United States
of America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, bureau, instrumentality,
regulatory body, court, tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government.
"GRANTING LENDER" has the meaning assigned to that term in Section
11.07(j).
"GUARANTEE" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner, including, without limitation, by way
of a pledge of assets or through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any Indebtedness.
"HAZARDOUS SUBSTANCE" means any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau, or instrumentality of the United
States or of the State or locality in which the same is located having or
exercising jurisdiction over such waste, substance or material.
"HEDGE AGREEMENTS" means, with respect to any Person, the collective
reference to any of the following: (a) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements designed
to protect such Person against fluctuations in interest rates with respect
to Indebtedness incurred and not for purposes of speculation, (b) foreign
exchange contracts and currency protection agreements entered into with
one of more financial institutions designed to protect such Person against
fluctuations in currency exchange rates with respect to Indebtedness
incurred and not for purposes of speculation, (c) any commodity futures
contract, commodity option or other similar
17
agreement or arrangement designed to protect against fluctuations in the
price of commodities used by such Person at the time and (d) other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates or currency exchange rates. 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.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person incurred in the normal course of business and
consistent with past practices and not for speculative purposes under any
Hedge Agreement.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent (a) in respect of borrowed
money, (b) evidenced by notes, bonds, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof), (c) in
respect of banker's acceptances, (d) representing Capital Lease
Obligations, (e) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that constitutes
an accrued expense or trade payable or (f) representing any Hedging
Obligations, if and to the extent any of the preceding items (other than
letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others
secured by a Lien on any asset of such Person (whether or not such
Indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other
Person. The amount of any Indebtedness outstanding as of any date will be
(x) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount, and (y) the principal
amount of the Indebtedness, together with any interest on the Indebtedness
that is more than 30 days past due, in the case of any other Indebtedness.
"INDEMNIFIED PERSON" has the meaning assigned to that term in
Section 11.04(b).
"INDEX DEBT" means the long-term, secured Indebtedness of the
Borrower issued under the General and Refunding Mortgage Indenture that is
not guaranteed by any other Person or subject to any other credit
enhancement.
"INITIAL CLOSING DATE" has the meaning assigned to the term "Closing
Date" contained in Section 1.01 of the Existing Credit Agreement. The
Initial Closing Date occurred on October 8, 2004.
"INSOLVENCY" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245
of ERISA; and the term "INSOLVENT" shall have a correlative meaning
(pertaining to a condition of Insolvency).
"INTELLECTUAL PROPERTY" means 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,
18
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 PERIOD" has the meaning assigned to that term in Section
3.03.
"INVESTMENTS" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including
Affiliates) in the forms of loans (including Guarantees or other
obligations), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), or purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all
items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Borrower or any Subsidiary of the
Borrower sells or otherwise disposes of any Equity Interests of any direct
or indirect Subsidiary of the Borrower such that, after giving effect to
any such sale or disposition, such Person is no longer a Subsidiary of the
Borrower, the Borrower will be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the
Equity Interests of such Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 8.02(e). The
acquisition by the Borrower or any Subsidiary of the Borrower of a Person
that holds an Investment in a third Person will be deemed to be an
Investment by the Borrower or such Subsidiary in such third Person in an
amount equal to the fair market value of the Investment held by the
acquired Person in such third Person in an amount determined as provided
in the final paragraph of Section 8.02(e).
"ISSUING BANK" means any Lender designated by the Borrower, and
acceptable to the Administrative Agent, in accordance with Section 4.01,
as the issuer of a Letter of Credit pursuant to an Issuing Bank Agreement.
As of the Closing Date, the Borrower has designated Union Bank as an
Issuing Bank, such designee has agreed to act as an Issuing Bank
hereunder, and the Administrative Agent has accepted such designee
pursuant to Section 4.01.
"ISSUING BANK AGREEMENT" means an agreement between an Issuing Bank
and the Borrower, in form and substance satisfactory to the Administrative
Agent, providing for the issuance (or, pursuant to Section 4.02(d), deemed
issuance) of one or more Letters of Credit, in form and substance
satisfactory to the Administrative Agent, in support of (i) the Borrower's
obligations owing to gas, electric power or other energy suppliers or (ii)
other general corporate activities of the Borrower. In the event of any
conflict between the terms of this Agreement and the terms of any Issuing
Bank Agreement, the terms of this Agreement shall control and such
conflicting terms under such Issuing Bank Agreement shall be of no force
or effect.
"LC PAYMENT NOTICE" has the meaning assigned to that term in Section
4.04(b).
"LC OUTSTANDINGS" means, for any Letter of Credit on any date of
determination, the maximum amount available to be drawn under such Letter
of Credit at any time on or
19
after such date (assuming the satisfaction of all conditions for drawing
enumerated therein).
"LENDER ASSIGNMENT" means an assignment and agreement entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit F.
"LENDERS" means the Banks listed on the signature pages hereof, each
Eligible Assignee that shall become a party hereto pursuant to Section
11.07, and, to the extent provided in Section 4.04(c), each Issuing Bank.
"LETTER OF CREDIT" means a letter of credit issued (or, pursuant to
Section 4.02(d), deemed issued) by an Issuing Bank pursuant to Section
4.02 (including any Existing Letters of Credit), as such letter of credit
may from time to time be amended, modified or extended in accordance with
the terms of this Agreement and the related Issuing Bank Agreement.
"LETTER OF CREDIT EXPIRATION DATE" means the date that occurs five
Business Days prior to the Final Maturity Date.
"LETTER OF CREDIT SUBLIMIT" means $75,000,000. In no event shall the
aggregate LC Outstandings of all Letters of Credit outstanding on any date
of determination (after giving effect to all Extensions of Credit on such
date) exceed the Letter of Credit Sublimit.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction.
"LOAN" means a loan by a Lender to the Borrower pursuant to Section
3.01 (or deemed made pursuant to Section 4.04(c) or (d)), and refers to an
ABR Loan or a Eurodollar Rate Loan (each of which shall be a "TYPE" of
Loan). All Loans by a Lender of the same Type, having the same Interest
Period and made or Converted on the same day shall be deemed to be a
single Loan by such Lender until repaid or next Converted.
"LOAN DOCUMENTS" means this Agreement, any Promissory Notes, the Fee
Letter, the Issuing Bank Agreement(s), the Officer's Certificate and the
G&R Series K Mortgage Bond, and any amendment, waiver, supplement or other
modification to any of the foregoing.
"MATERIAL ADVERSE EFFECT" means 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
20
any of the other Loan Documents or the rights or remedies of the
Administrative Agent, the Issuing Banks or the Lenders hereunder or
thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN" means 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.
"MOAPA ACQUISITION AGREEMENT" means the Purchase Agreement, dated as
of June 22, 2004, between Duke Energy North America, LLC, a Delaware
limited liability company, and Duke Energy Moapa, LLC, a Delaware limited
liability company, as the sellers, and the Borrower, as purchaser.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
"MULTIEMPLOYER PLAN" means a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (a)
any gain (but not loss), together with any related provision for taxes on
such gain (but not loss), realized in connection with (i) any Asset Sale
or (ii) the disposition of any securities by such Person or any of its
Subsidiaries or the extinguishment of any Indebtedness of such Person or
any of its Subsidiaries and (b) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain
(but not loss).
"NEW BANKS" has the meaning assigned to that term in the preamble
hereto.
"NOTICE OF BORROWING" has the meaning assigned to that term in
Section 3.01(a).
"OECD" means the Organization for Economic Cooperation and
Development.
"OBLIGATIONS" means 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, any Issuing Bank or 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 Promissory Note, any Letter of Credit, any other Loan
Document or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest, fees,
indemnities, costs, expenses (including, without limitation, all fees,
charges and disbursements of counsel to the
21
Administrative Agent, any Issuing Bank or any Lender that are required to
be paid by the Borrower pursuant hereto) or otherwise.
"OFFICER'S CERTIFICATE" means an "Officer's Certificate" (as defined
in the General and Refunding Mortgage Indenture) setting forth the terms
of the G&R Series K Mortgage Bond, executed by a duly authorized officer
of the Borrower and authenticated by the trustee under the General and
Refunding Mortgage Indenture.
"PARTICIPANT" has the meaning assigned to that term in Section
11.07(e).
"PAYMENT AMOUNTS" has the meaning assigned to that term in Section
9.01(e).
"PBGC" means, the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERCENTAGE" means, for any Lender on any date of determination, the
percentage obtained by dividing such Lender's Commitment on such date by
the total of the Commitments on such date, and multiplying the quotient so
obtained by 100%. In the event that the Commitments have been terminated,
each Lender's Percentage shall be calculated on the basis of the
Commitments in effect immediately prior to such termination.
"PERMITTED BUSINESS" means any business that derives a majority of
its revenues from the business engaged in by the Borrower and its
Subsidiaries on the Closing Date and/or activities that are reasonably
similar, ancillary, incidental, complementary or related to, or a
reasonable extension, development or expansion of, the businesses in which
the Borrower and its Subsidiaries are engaged on the Closing Date, as
determined in good faith by the Board of Directors of the Borrower.
"PERMITTED DEBT" has the meaning assigned to that term in Section
8.02(a)(ii).
"PERMITTED INVESTMENTS" means any of the following Investments:
(a) any Investment in the Borrower or in a Subsidiary of the
Borrower;
(b) any Investment in Cash Equivalents;
(c) any Investment by the Borrower or any Subsidiary of the
Borrower in a Person, if as a result of such Investment, (i) such
Person becomes a Subsidiary of the Borrower or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into,
the Borrower or a Subsidiary of the Borrower;
(d) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made in compliance with
Section 8.02(d);
22
(e) any acquisition of assets to the extent it is in exchange
for the issuance of Equity Interests (other than Disqualified Stock)
of the Borrower;
(f) any Investments received in compromise of obligations of
trade creditors or customers that were incurred in the ordinary
course of business, including pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of any
trade creditor or customer;
(g) Hedging Obligations;
(h) any Investments made in accordance with clause (v) of the
definition of "Asset Sales"; and
(i) other Investments in any Person that is not also a
Subsidiary of the Borrower having an aggregate fair market value
(measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (i) since
the Closing Date, not to exceed $30,000,000.
"PERMITTED LIENS" has the meaning assigned to that term in Section
8.02(b).
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Borrower or any of its Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease
or refund other Indebtedness of the Borrower or any of its Subsidiaries
(other than intercompany Indebtedness); provided that:
(a) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the
Indebtedness extended, refinanced, renewed, replaced, defeased or
refunded (plus all accrued and unpaid interest on the Indebtedness
and the amount of all expenses and premiums incurred in connection
therewith);
(b) if such Permitted Refinancing Indebtedness is issued on or
after the first anniversary of the Closing Date, such Permitted
Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(c) if such Permitted Refinancing Indebtedness is issued on or
after the first anniversary of the Closing Date, and the
Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded is Subordinated Debt, such Permitted Refinancing
Indebtedness has a final maturity date later than the Final Maturity
Date of, and is subordinated in right of payment to, the Loans and
other Obligations on terms at least as favorable to the Lenders as
those contained in the
23
documentation governing the Subordinated Debt being extended,
refinanced, renewed, replaced, defeased or refunded; and
(d) such Indebtedness is incurred either by the Borrower or by
the Subsidiary which is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"PERSON" means 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" means, 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.
"PROMISSORY NOTE" means any promissory note of the Borrower payable
to the order of a Lender (and, if requested, its registered assigns),
issued pursuant to Section 3.01(d); and "PROMISSORY NOTES" means any or
all of the foregoing.
"PROPERTY" means 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.
"PUCN" means the Public Utilities Commission of Nevada, or any
successor agency.
"RECIPIENT" has the meaning assigned to that term in Section 11.08.
"REFERENCE RATE" means the rate of interest announced publicly by
Union Bank in Los Angeles, California, from time to time, as the Union
Bank Reference Rate.
"REGISTER" has the meaning assigned to that term in Section
11.07(c).
"REGULATION U" means Regulation U of the Board as in effect from
time to time.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees and
agents of such Person and of such Person's Affiliates.
"REORGANIZATION" means, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31, .32,
.34 or .35 of PBGC Reg. Section 4043.
"REQUEST FOR ISSUANCE" has the meaning assigned to that term in
Section 4.02(a).
24
"REQUIRED LENDERS" means, on any date of determination, Lenders
that, collectively, on such date (i) hold at least 51% of the then
aggregate outstanding principal amount of the Loans owing to Lenders and
(ii) if no Loans are then outstanding, have Percentages in the aggregate
of at least 51%. Any determination of those Lenders constituting the
Required Lenders shall be made by the Administrative Agent and shall be
conclusive and binding on all parties absent manifest error.
"REQUIREMENT OF LAW" means, 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.
"RESPONSIBLE OFFICER" means the chief executive officer, president,
senior vice-president, vice-president, chief financial officer, treasurer
or assistant treasurer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer or the treasurer of the
Borrower.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PAYMENTS" means has the meaning assigned to such term in
Section 8.02(e).
"REVOLVING CREDIT TERMINATION DATE" means the earlier to occur of
(i) the Final Maturity Date and (ii) the date of termination or reduction
in whole of the Commitments pursuant to Section 2.03 or 9.02.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"SALE AND LEASEBACK TRANSACTION" has the meaning assigned to such
term in Section 8.02(h).
"SEC" means the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"SIERRA PACIFIC RESOURCES" means Sierra Pacific Resources, a Nevada
corporation.
"SINGLE EMPLOYER PLAN" means any Plan that is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SOLVENT" means, 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
25
present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the
liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim"
means any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right
to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"SPC" has the meaning assigned to that term in Section 11.07(j).
"STATED MATURITY" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which the payment
of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"SUBORDINATED DEBT" means any debt that is subordinated to the prior
payment of the Loans and other Obligations.
"SUBSIDIARY" means, 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.
"SUBSIDIARY GUARANTEE" means any Guarantee of the Loans and other
Obligations to be executed by any Subsidiary of the Borrower pursuant to
Section 8.02(o).
"SUBSIDIARY GUARANTOR" means any Subsidiary of the Borrower that
executes a Subsidiary Guarantee, and its successors and assigns.
"TRUST PREFERRED VEHICLE" means NVP Capital I (Trust), NVP Capital
III (Trust) or any future similar trust, the only assets of which are
Subordinated Debt of the Borrower.
"TYPE" has the meaning assigned to such term (i) in the definition
of "Loan" when used in such context and (ii) in the definition of
"Borrowing" when used in such context.
26
"UNDRAWN FEE RATE" means, for any day, the applicable percentage per
annum set forth below under the caption "Undrawn Fee Rate", based upon the
ratings by S&P and Moody's applicable on such date to the Index Debt:
Undrawn Fee
Rate
----
Category 1
BBB- or higher by S&P and 0.25%
Baa3 or higher by Moody's
Category 2
BB+ or higher by S&P and 0.375%
Ba1 or higher by Moody's
Category 3
BB or higher by S&P and 0.50%
Ba2 or higher by Moody's
Category 4
BB- or higher by S&P and 0.625%
Ba3 or higher by Moody's
Category 5
B+ or lower by S&P or 0.75%
B1 or lower by Moody's
For purposes of the foregoing, (A) if Moody's or S&P shall not have in
effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating in
Category 5, (B) if more than one Category (other than Category 5) is
applicable at any one time, the Undrawn Fee Rate shall be based on the
applicable Category having the lowest number (i.e., Category 1 is lower
than Category 2), and (C) in the event that, and
27
at all times during which, Category 5 is applicable, the Undrawn Fee Rate
shall be based on Category 5. The Undrawn Fee Rate shall be increased or
decreased in accordance with this definition upon any change in the
applicable ratings of the Index Debt, and such increased or decreased
Undrawn Fee Rate shall be effective from the date of announcement of any
such new ratings. The Borrower agrees to notify the Administrative Agent
promptly after each change in any rating of the Index Debt. If the rating
system of Moody's or S&P shall change, or if any such rating agency shall
cease to be in the business of rating corporate debt obligations, the
Borrower and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the non-availability
of ratings from such rating agency and, pending the effectiveness of any
such amendment, the Undrawn Fee Rate shall be determined by reference to
the rating most recently in effect prior to such change or cessation.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
sum of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of
the Indebtedness, by (ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by (b) the then outstanding principal amount of such
Indebtedness.
"WHOLLY-OWNED SUBSIDIARY" means, 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.
SECTION 1.02. COMPUTATION OF TIME PERIODS; CONSTRUCTION. (a) Unless
otherwise indicated, each reference in this Agreement to a specific time of day
is a reference to New York City time. In the computation of periods of time
under this Agreement, any period of a specified number of days or months shall
be computed by including the first day or month occurring during such period and
excluding the last such day or month. Unless the context requires otherwise, in
the case of a period of time "from" a specified date "to" or "until" a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
(b) The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes", and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be construed to have
the same meaning and effect as the word "shall". Unless the context requires
otherwise (i) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person's successors and assigns, (iii) the
words "herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, and (iv) all references
28
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, applied in a manner
consistent with those applied in the preparation of the financial statements
referred to in Section 7.01(a).
ARTICLE II
COMMITMENTS
SECTION 2.01. THE COMMITMENTS. (a) Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make Loans to the Borrower and to
participate in the issuance (or, pursuant to Section 4.02(d), deemed issuance)
of Letters of Credit (and the LC Outstandings thereunder) during the period from
the Closing Date until the Revolving Credit Termination Date, in an aggregate
outstanding amount not to exceed on any day such Lender's Available Commitment
(after giving effect to all Extensions of Credit to be made on such day and the
application of the proceeds thereof). Within the limits hereinafter set forth,
the Borrower may, from the Closing Date until the Revolving Credit Termination
Date, request Extensions of Credit hereunder, prepay Loans, or reduce or cancel
Letters of Credit, and use the resulting increase in the Available Commitments
for further Extensions of Credit in accordance with the terms hereof.
(b) In no event shall the Borrower be entitled to request or receive any
Extensions of Credit that would cause the principal amount outstanding hereunder
to exceed the Commitments.
SECTION 2.02. FEES. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender an undrawn commitment fee on the average
daily amount of such Lender's Available Commitment at a rate per annum equal to
the Undrawn Fee Rate in effect from time to time, from the Initial Closing Date,
in the case of each Existing Bank, from the date hereof, in the case of each New
Bank, and from the effective date specified in the Lender Assignment pursuant to
which it became a Lender, in the case of each other Lender, until the Revolving
Credit Termination Date, payable quarterly in arrears on the last day of each
March, June, September and December, commencing on the first such date to occur
following the date hereof, and on the Revolving Credit Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a commission on the average daily aggregate amount of the LC
Outstandings, from the Initial Closing Date, in the case of each Existing Bank,
from the date hereof, in the case of each New Bank, and from the effective date
specified in the Lender Assignment pursuant to which it became a Lender, in the
case of each other Lender, until the Letter of Credit Expiration Date, at a rate
per annum equal to the Applicable Margin with respect to Eurodollar Rate Loans
from time to time, payable quarterly in arrears on the last day of each March,
June, September and December, commencing on the first such date to occur
following the date hereof, and on the Letter of Credit Expiration Date.
(c) In addition to the fees provided for in subsections (a) and (b) above,
the Borrower shall pay to the Administrative Agent, for its own account, such
other fees as are provided for in
29
that certain letter agreement, dated the Initial Closing Date, between the
Borrower and the Administrative Agent (the "FEE LETTER"), in the amounts and at
the times specified therein.
SECTION 2.03. REDUCTION OF THE COMMITMENTS. (a) The Commitments shall be
automatically and permanently terminated on the Revolving Credit Termination
Date.
(b) The Borrower may, upon at least three Business Days' notice to the
Administrative Agent (which shall promptly distribute copies thereof to the
Lenders), terminate in whole or reduce ratably in part the unused portions of
the Commitments (which termination or reduction (as the case may be), upon its
effectiveness, shall be permanent and irrevocable); provided that any such
partial reduction shall be in the aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof; and provided, further, that the
Commitments shall in no event be reduced to an amount which is less than the
aggregate LC Outstandings of all Letters of Credit then outstanding.
SECTION 2.04. COMPUTATIONS OF OUTSTANDINGS. Whenever reference is made in
this Agreement to the principal amount outstanding on any date under this
Agreement, such reference shall refer to the sum of (i) the aggregate principal
amount of all Loans outstanding on such date plus (ii) the aggregate LC
Outstandings of all Letters of Credit outstanding on such date, in each case
after giving effect to all Extensions of Credit to be made on such date and the
application of the proceeds thereof. At no time shall the principal amount
outstanding under this Agreement exceed the aggregate amount of the Commitments.
References to the unused portion of the Commitments shall refer to the excess,
if any, of the Commitments over the principal amount outstanding hereunder; and
references to the unused portion of any Lender's Commitment shall refer to such
Lender's Percentage of the unused Commitments.
ARTICLE III
LOANS
SECTION 3.01. LOANS. (a) The Borrower may request a Borrowing (other than
a Conversion) by delivering a notice (a "NOTICE OF BORROWING") to the
Administrative Agent no later than 3:00 P.M. on the third Business Day or, in
the case of ABR Loans, on the first Business Day, prior to the date of the
proposed Borrowing. The Administrative Agent shall give each Lender prompt
notice of each Notice of Borrowing. Each Notice of Borrowing shall be in
substantially the form of Exhibit A and shall specify the requested (i) date of
such Borrowing (which shall be a Business Day, but in no event later than the
Business Day immediately preceding the Revolving Credit Termination Date), (ii)
Type of Loans to be made in connection with such Borrowing, (iii) Interest
Period, if any, for such Loans and (iv) amount of such Borrowing. Each proposed
Borrowing shall conform to the requirements of Sections 3.03 and 3.04.
(b) Each Lender shall, before 12:00 noon on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's address referred to in
Section 11.02, in same day funds, such Lender's Percentage of such Borrowing.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article VI, the Administrative Agent will
30
make such funds available to the Borrower at the Administrative Agent's
aforesaid address. Notwithstanding the foregoing, unless the Administrative
Agent shall have received notice from a Lender prior to the date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's Percentage of such Borrowing, the Administrative Agent may assume
that such Lender has made such Percentage available to the Administrative Agent
on the date of such Borrowing in accordance with the first sentence of this
subsection (b), and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
(c) If and to the extent that any Lender (a "NON-PERFORMING LENDER") shall
not have made available to the Administrative Agent, in accordance with
subsection (b) above, such Lender's Percentage of any Borrowing, the
non-performing Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand corresponding amounts (not to exceed
the aggregate amount that such non-performing Lender failed to make available to
the Administrative Agent), together with interest thereon for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to Loans made in connection with such
Borrowing and (ii) in the case of such Lender, the Federal Funds Effective Rate.
Within the limits of each Lender's Available Commitment and subject to the other
terms and conditions set forth in this Agreement for the making of Loans, the
Borrower may request (and the Lenders shall honor) one or more additional
Borrowings from the performing Lenders to fund such repayment to the
Administrative Agent. If a non-performing Lender shall repay to the
Administrative Agent such corresponding amount in full (with interest as above
provided), (x) the Administrative Agent shall apply such corresponding amount
and interest to the repayment to the Administrative Agent (or repayment of Loans
made to fund such repayment to the Administrative Agent), and shall make any
remainder available to the Borrower and (y) such amount so repaid shall be
deemed to constitute such Lender's Loan, made as part of such Borrowing for
purposes of this Agreement as if funded concurrently with the other Loans made
as part of such Borrowing, and such Lender shall forthwith cease to be deemed a
non-performing Lender; if and so long as such non-performing Lender shall not
repay such amount, and unless and until an Eligible Assignee shall have assumed
and performed the obligations of such non-performing Lender, all computations by
the Administrative Agent of Percentages, Commitments and payments hereunder
shall be made without regard to the Commitments, or outstanding Loans, of such
non-performing Lender, and any amounts paid to the Administrative Agent for the
account of such non-performing Lender shall be held by the Administrative Agent
in trust for such non-performing Lender in a non-interest-bearing special
purpose account. Nothing herein shall in any way limit, waive or otherwise
reduce any claims that any party hereto may have against any non-performing
Lender. The failure of any Lender to make the Loan to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on the date of any Borrowing.
(d) Any Lender may request that Loans made by it hereunder be evidenced by
a Promissory Note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a Promissory Note payable to the order of such Lender
(or, if requested by such Lender, to such
31
Lender and its registered assigns) and in a form approved by the Administrative
Agent. Thereafter, the Loans evidenced by such Promissory Note and interest
thereon shall at all times (including after assignment pursuant to Section
11.07) be represented by one or more Promissory Notes in such form payable to
the order of the payee named therein (or, if such Promissory Note is a
registered note, to such payee and its registered assigns).
SECTION 3.02. CONVERSION OF LOANS. The Borrower may from time to time
Convert any Loan (or portion thereof) of any Type to one or more Loans of the
same or any other Type by delivering a notice of such Conversion (a "NOTICE OF
CONVERSION") to the Administrative Agent no later than 3:00 P.M. on (x) the
third Business Day prior to the date of any proposed Conversion into a
Eurodollar Rate Loan and (y) the first Business Day prior to the date of any
proposed Conversion into an ABR Loan. The Administrative Agent shall give each
Lender prompt notice of each Notice of Conversion. Each Notice of Conversion
shall be in substantially the form of Exhibit B and shall specify (i) the
requested date of such Conversion, (ii) the Type of, and Interest Period, if
any, applicable to, the Loans (or portions thereof) proposed to be Converted,
(iii) the requested Type of Loans to which such Loans (or portions thereof) are
proposed to be Converted, (iv) the requested initial Interest Period, if any, to
be applicable to the Loans resulting from such Conversion and (v) the aggregate
amount of Loans (or portions thereof) proposed to be Converted. Each proposed
Conversion shall be subject to the provisions of Sections 3.03 and 3.04.
SECTION 3.03. INTEREST PERIODS. The period between the date of each
Eurodollar Rate Loan and the date of payment in full of such Loan shall be
divided into successive periods ("INTEREST PERIODS") for purposes of computing
interest applicable thereto. The initial Interest Period for each such Loan
shall begin on the day such Loan is made, and each subsequent Interest Period
shall begin on the last day of the immediately preceding Interest Period for
such Loan. The duration of each Interest Period shall be 1, 2, 3, or 6 months,
as the Borrower may, in accordance with Section 3.01 or 3.02, select; provided,
however, that:
(i) the Borrower may not select any Interest Period that ends
after the Revolving Credit Termination Date;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall occur on the next succeeding Business
Day, provided that if such extension would cause the last day of
such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next
preceding Business Day; and
(iii) any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period.
SECTION 3.04. OTHER TERMS RELATING TO THE MAKING AND CONVERSION OF LOANS.
(a) Notwithstanding anything in Section 3.01 or 3.02 to the contrary:
32
(i) each Borrowing (other than a Borrowing deemed made under
Section 4.04(c) or (d)) shall be in an aggregate amount not less
than (A) in the case of Eurodollar Loans, $5,000,000 or an integral
multiple of $1,000,000 in excess thereof, or (B) in the case of ABR
Loans, $1,000,000 or an integral multiple of $1,000,000 in excess
thereof (or, in each case, such lesser amount as shall be equal to
the total amount of the Available Commitments on such date, after
giving effect to all other Extensions of Credit to be made on such
date), and shall consist of Loans of the same Type, having the same
Interest Period and made or Converted on the same day by the Lenders
ratably according to their respective Percentages;
(ii) the Borrower may request that more than one Borrowing be
made on the same day;
(iii) at no time shall more than twelve (12) different
Borrowings comprising Eurodollar Rate Loans be outstanding
hereunder;
(iv) no Eurodollar Rate Loan may be Converted on a date other
than the last day of the Interest Period applicable to such Loan
unless the corresponding amounts, if any, payable to the Lenders
pursuant to Section 5.04(b) are paid within two Business Days after
the Administrative Agent provides written notice to the Borrower as
to amounts owing under Section 5.04(b) in connection with such
Conversion;
(v) if the Borrower shall either fail to give a timely Notice
of Conversion pursuant to Section 3.02 in respect of any Loans or
fail, in any Notice of Conversion that has been timely given, to
select the duration of any Interest Period for Loans to be Converted
into Eurodollar Rate Loans in accordance with Section 3.03, such
Loans shall, on the last day of the then existing Interest Period
therefor, automatically Convert into, or remain as, as the case may
be, ABR Loans; and
(vi) if, on the date of any proposed Conversion, any Event of
Default shall have occurred and be continuing, all Loans then
outstanding shall, on such date, automatically Convert into, or
remain as, as the case may be, ABR Loans.
(b) If any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Applicable Lending
Office to perform its obligations hereunder to make, or to fund or maintain,
Eurodollar Rate Loans hereunder, (i) the obligation of such Lender to make, or
to Convert Loans into, Eurodollar Rate Loans for such Borrowing or any
subsequent Borrowing from such Lender shall be forthwith suspended until the
earlier to occur of the date upon which (A) such Lender shall cease to be a
party hereto and (B) it is no longer unlawful for such Lender to make, fund or
maintain Eurodollar Rate Loans, and (ii) if the maintenance of Eurodollar Rate
Loans then outstanding through the last day of the Interest Period therefor
would cause such Lender to be in violation of such law, regulation or assertion,
such Lender may require the Borrower to either
33
prepay or Convert all Eurodollar Rate Loans from such Lender within five
Business Days after the Borrower's receipt of such notice, and if the Borrower
shall not have so prepaid or Converted such Eurodollar Rate Loans by such fifth
Business Day, then such Eurodollar Rate Loans shall be deemed automatically
Converted to ABR Loans on such fifth Business Day. Promptly upon becoming aware
that the circumstances that caused such Lender to deliver such notice no longer
exist, such Lender shall deliver notice thereof to the Administrative Agent (but
the failure to do so shall impose no liability upon such Lender). Promptly upon
receipt of such notice from such Lender (or upon such Lender's assigning all of
its Commitments, Loans, participation and other rights and obligations hereunder
to an Eligible Assignee), the Administrative Agent shall deliver notice thereof
to the Borrower and the Lenders and such suspension shall terminate. Prior to
any Lender giving notice to the Administrative Agent or the Borrower under this
subsection (b), such Lender shall use reasonable efforts to change the
jurisdiction of its Applicable Lending Office, if such change would avoid such
unlawfulness and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.
(c) If the Required Lenders shall, at least one Business Day before the
date of any requested Borrowing, notify the Administrative Agent that the
Eurodollar Rate for Eurodollar Rate Loans to be made in connection with such
Borrowing will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Loans for such
Borrowing, the right of the Borrower to select Eurodollar Rate Loans for such
Borrowing and any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Loan to be made
or Converted in connection with such Borrowing shall be an ABR Loan.
(d) If any Lender shall have delivered a notice to the Borrower or the
Administrative Agent described in Section 3.04(b) or Section 3.06, or shall
become a non-performing Lender under Section 3.01(c) or Section 4.04(c), and if
and so long as such Lender shall not have withdrawn such notice or corrected
such non-performance in accordance with said Section 3.04(b), Section 3.06,
Section 3.01(c) or Section 4.04(c), the Borrower or the Administrative Agent may
demand that such Lender assign in accordance with Section 11.07, to one or more
Eligible Assignees designated by the Borrower or the Administrative Agent, all
(but not less than all) of such Lender's Commitments, Loans, participation and
other rights and obligations hereunder; provided that any such demand by the
Borrower during the continuance of a Default or an Event of Default shall be
ineffective without the consent of the Required Lenders. If, within 30 days
following any such demand by the Administrative Agent or the Borrower, any such
Eligible Assignee so designated shall fail to consummate such assignment on
terms reasonably satisfactory to such Lender, or the Borrower and the
Administrative Agent shall have failed to designate any such Eligible Assignee,
then such demand by the Borrower or the Administrative Agent shall become
ineffective, it being understood for purposes of this provision that such
assignment shall be conclusively deemed to be on terms reasonably satisfactory
to such Lender, and such Lender shall be compelled to consummate such assignment
forthwith, if such Eligible Assignee (i) shall agree to such assignment in
substantially the form of the Lender Assignment attached hereto as Exhibit F and
(ii) shall tender payment to such Lender in an amount equal to the full
outstanding dollar amount accrued in favor of such Lender hereunder (as computed
in accordance with the records of the Administrative Agent), including, without
34
limitation, all accrued interest and fees and, to the extent not paid by the
Borrower, any payments required pursuant to Section 5.04(b).
(e) Each Notice of Borrowing and Notice of Conversion shall be irrevocable
and binding on the Borrower. In the case of any Borrowing which the related
Notice of Borrowing or Notice of Conversion specifies is to be comprised of
Eurodollar Rate Loans, the Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure by the
Borrower to fulfill, on or before the date specified in such Notice of Borrowing
or Notice of Conversion for such Borrowing, the applicable conditions (if any)
set forth in this Article III (other than failure pursuant to the provisions of
Section 3.04(c) hereof) or in Article VI, including any such loss (including
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund the Loan to be made by such Lender when such Loan, as a result of such
failure, is not made on such date.
SECTION 3.05. REPAYMENT OF LOANS; INTEREST.
(a) Principal. The Borrower shall repay the outstanding principal amount
of the Loans on the Revolving Credit Termination Date.
(b) Interest. The Borrower shall pay interest on the unpaid principal
amount of each Loan owing to each Lender from the date of such Loan until such
principal amount shall be paid in full, at the Applicable Rate for such Loan,
payable as follows:
(i) ABR Loans. If such Loan is an ABR Loan, interest thereon shall
be payable quarterly in arrears on the last day of each March, June,
September and December, on the date of any Conversion of such ABR Loan and
on the date such ABR Loan shall become due and payable or shall otherwise
be paid in full.
(ii) Eurodollar Rate Loans. If such Loan is a Eurodollar Rate Loan,
interest thereon shall be payable on the last day of each Interest Period
for such Loan and, if the Interest Period for such Loan has a duration of
more than three months, on that day of each third month during such
Interest Period that corresponds to the first day of such Interest Period
(or, if any such month does not have a corresponding day, then on the last
day of such month).
SECTION 3.06. ADDITIONAL INTEREST ON EURODOLLAR RATE LOANS. The Borrower
shall pay to the Administrative Agent for the account of each Lender any costs
actually incurred by such Lender with respect to Eurodollar Rate Loans that are
attributable to such Lender's compliance with regulations of the Board requiring
the maintenance of reserves with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities. Such costs shall be paid to the
Administrative Agent for the account of such Lender in the form of additional
interest on the unpaid principal amount of each Eurodollar Rate Loan of such
Lender, from the date of such Eurodollar Rate Loan until such principal amount
is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Eurodollar Rate Loan from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Reserve
Percentage of such Lender for
35
such Interest Period, payable on each date on which interest is payable on such
Eurodollar Rate Loan (but in no event earlier than ten Business Days after the
Borrower's receipt of the certificate referred to in the last sentence of this
Section 3.06). Such additional interest shall be determined by such Lender and
notified to the Borrower through the Administrative Agent. A certificate as to
the amount of such additional interest and giving a reasonable explanation and
calculation thereof shall be submitted to the Borrower and the Administrative
Agent by such Lender and shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 3.07. NEW BANKS. On the Closing Date, each New Bank shall purchase
by assignment from the Existing Banks such portion of the Loans (if any) owing
to them as shall be designated by the Administrative Agent such that, after
giving effect to all such purchases and assignments, the outstanding Loans owing
to each Bank shall equal such Bank's Percentage of the aggregate amount of Loans
owing to all Banks.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. ISSUING BANKS. Subject to the terms and conditions hereof,
the Borrower may from time to time identify and arrange for one or more Lenders
to act as Issuing Banks hereunder. Any such designation by the Borrower shall be
notified to the Administrative Agent at least four Business Days prior to the
first date upon which the Borrower proposes that such Issuing Bank issue (or,
pursuant to Section 4.02(d), be deemed to have issued) its first Letter of
Credit, so as to provide adequate time for such proposed Issuing Bank to be
approved by the Administrative Agent hereunder (such approval not to be
unreasonably withheld). Within two Business Days following the receipt of any
such designation of a proposed Issuing Bank, the Administrative Agent shall
notify the Borrower as to whether such designee is acceptable to the
Administrative Agent. Nothing contained herein shall be deemed to require any
Lender to agree to act as an Issuing Bank, if it does not so desire.
SECTION 4.02. LETTERS OF CREDIT. (a) Each Letter of Credit (other than an
Existing Letter of Credit) shall be issued (or the stated maturity thereof
extended or terms thereof modified or amended) on not less than three Business
Days' prior written notice thereof to the Administrative Agent (which shall
promptly distribute copies thereof to the Lenders) and the relevant Issuing
Bank; provided, however, that no such notice shall be required in connection
with the automatic extension of an Evergreen Letter of Credit. Each such notice
(a "REQUEST FOR ISSUANCE") shall specify (i) the date (which shall be a Business
Day, but in no event later than the date that occurs ten (10) Business Days
prior to the Revolving Credit Termination Date) of issuance of such Letter of
Credit (or the date of effectiveness of such extension, modification or
amendment) and the stated expiry date thereof (which shall be no later than the
date that occurs one year from the date of issuance of such Letter of Credit
(or, in the case of any extension of a Letter of Credit, one year from the date
of effectiveness of such extension), and in any event no later than the Letter
of Credit Expiration Date (subject, in the case of any Evergreen Letter of
Credit, to automatic annual renewal or extension)), (ii) the proposed stated
amount of such Letter of Credit (which shall be in Dollars and shall not be less
than $100,000) and (iii) such other information as shall demonstrate compliance
of such Letter of Credit with the requirements specified therefor in this
Agreement and the relevant Issuing Bank Agreement. Each Request for
36
Issuance shall be irrevocable unless modified or rescinded by the Borrower not
less than one Business Day prior to the proposed date of issuance (or
effectiveness) specified therein. Not later than 12:00 noon on the proposed date
of issuance (or effectiveness) specified in such Request for Issuance, and upon
fulfillment of the applicable conditions precedent and the other requirements
set forth herein and in the relevant Issuing Bank Agreement, such Issuing Bank
shall issue (or extend, amend or modify) such Letter of Credit and provide
notice and a copy thereof to the Administrative Agent, which shall promptly
furnish copies thereof to the Lenders.
(b) Each Lender severally agrees with such Issuing Bank to participate in
the Extension of Credit resulting from the issuance or, pursuant to Section
4.02(d), deemed issuance (or extension, modification or amendment) of such
Letter of Credit, in the manner and the amount provided in Section 4.04(b), and
the issuance (or, pursuant to Section 4.02(d), deemed issuance) of such Letter
of Credit shall be deemed to be a confirmation by such Issuing Bank and each
Lender of such participation in such amount.
(c) Notwithstanding anything herein to the contrary, the aggregate LC
Outstandings of all Letters of Credit outstanding at any one time shall not
exceed the Letter of Credit Sublimit.
(d) Subject to the requirements of subsection (a) above, upon at least
four Business Days prior written notice to the Administrative Agent, the
Borrower may request that an Existing Letter of Credit be deemed to be a Letter
of Credit issued hereunder. Such request shall be accompanied by a copy of such
Existing Letter of Credit and a consent of the bank or other financial
institution that issued such Existing Letter of Credit to its deemed issuance
hereunder. If the Administrative Agent determines that such Existing Letter of
Credit meets the requirements specified therefor in this Agreement (including
the requirements set forth in clauses (i) and (ii) of subsection (a) above and
in subsection (c) above) and the relevant Issuing Bank Agreement, then (i) the
Administrative Agent shall promptly provide a copy of such Existing Letter of
Credit to the Lenders and (ii) subject to the satisfaction of the conditions
precedent set forth in Section 6.02, and notwithstanding any reference in such
Existing Letter of Credit to any credit facility pursuant to which such Existing
Letter of Credit was issued, such Existing Letter of Credit shall be deemed to
constitute a Letter of Credit and to have been issued hereunder on the date set
forth in the Borrower's notice to the Administrative Agent (by the Issuing Bank
that issued or was deemed to have issued such Existing Letter of Credit under
such credit facility); provided, however, that nothing contained in this Section
4.02 shall extend, modify or otherwise affect the existing expiry date under any
such Existing Letter of Credit. Notwithstanding the foregoing, the parties
hereto acknowledge and agree that the letters of credit set forth in Schedule
4.02(d) hereto shall constitute Letters of Credit for all purposes hereunder.
SECTION 4.03. ISSUING BANK FEES. The Borrower shall pay directly to each
Issuing Bank such fees and expenses, if any, specified to be paid to such
Issuing Bank pursuant to the Issuing Bank Agreement to which it is a party, at
the times, and in the manner, specified in such Issuing Bank Agreement.
SECTION 4.04. REIMBURSEMENT TO ISSUING BANKS. (a) The Borrower hereby
agrees to pay to the Administrative Agent for the account of each Issuing Bank,
on demand made by such Issuing Bank to the Borrower and the Administrative
Agent, on and after each date on which such Issuing Bank shall pay any amount
under the Letter of Credit issued (or, pursuant to Section
37
4.02(d), deemed issued) by such Issuing Bank, a sum equal to the amount so paid
plus interest on such amount from the date so paid by such Issuing Bank until
repayment to such Issuing Bank in full at a fluctuating interest rate per annum
equal at all times to the Applicable Rate for ABR Loans.
(b) If any Issuing Bank shall not have been reimbursed in full for any
payment made by such Issuing Bank under the Letter of Credit issued (or,
pursuant to Section 4.02(d), deemed issued) by such Issuing Bank on the date of
such payment, such Issuing Bank shall give the Administrative Agent and each
Lender prompt notice thereof (an "LC PAYMENT NOTICE") no later than 12:00 noon
on the Business Day immediately succeeding the date of such payment by such
Issuing Bank. Each Lender severally agrees to purchase a participation in the
reimbursement obligation of the Borrower to such Issuing Bank under subsection
(a) above, by paying to the Administrative Agent for the account of such Issuing
Bank an amount equal to such Lender's Percentage of such unreimbursed amount
paid by such Issuing Bank, plus interest on such amount at a rate per annum
equal to the Federal Funds Effective Rate from the date of such payment by such
Issuing Bank to the date of payment to such Issuing Bank by such Lender. Each
such payment by a Lender shall be made not later than 3:00 P.M. on the later to
occur of (i) the Business Day immediately following the date of such payment by
such Issuing Bank and (ii) the Business Day on which such Lender shall have
received an LC Payment Notice from such Issuing Bank. Each Lender's obligation
to make each such payment to the Administrative Agent for the account of such
Issuing Bank shall be several and shall not be affected by (A) the occurrence or
continuance of any Default or Event of Default, (B) the failure of any other
Lender to make any payment under this Section 4.04, or (C) subject to subsection
(e) below, the date of the drawing under the applicable Letter of Credit issued
by such Issuing Bank. Each Lender further agrees that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
(c) The failure of any Lender to make any payment to the Administrative
Agent for the account of an Issuing Bank in accordance with subsection (b) above
shall not relieve any other Lender of its obligation to make payment, but no
Lender shall be responsible for the failure of any other Lender. If any Lender
(a "NON-PERFORMING LENDER") shall fail to make any payment to the Administrative
Agent for the account of an Issuing Bank in accordance with subsection (b) above
within five Business Days after the LC Payment Notice relating thereto, then,
for so long as such failure shall continue, such Issuing Bank shall be deemed,
for purposes of Section 5.05 and Article IX hereof, to be a Lender hereunder
owed a Loan in an amount equal to the outstanding principal amount due and
payable by such Lender to the Administrative Agent for the account of such
Issuing Bank pursuant to subsection (b) above.
(d) Each participation purchased by a Lender under subsection (b) above
shall constitute an ABR Loan deemed made by such Lender to the Borrower on the
date of such payment by the relevant Issuing Bank under the Letter of Credit
issued (or, pursuant to Section 4.02(d), deemed issued) by such Issuing Bank
(irrespective of the Borrower's noncompliance, if any, with the conditions
precedent for Loans hereunder); and all such payments by the Lenders in respect
of any one such payment by such Issuing Bank shall constitute a single Borrowing
hereunder.
38
(e) Notwithstanding subsections (b), (c) and (d) above or any other
provision contained in this Agreement or any other Loan Document to the
contrary, in no event shall the Lenders have any obligation to purchase a
participation in the reimbursement obligation of the Borrower to any Issuing
Bank, or otherwise to pay any amount to (or for the account of) such Issuing
Bank or any other Person, in respect of a drawing under an Evergreen Letter of
Credit that occurs after the Letter of Credit Expiration Date. In furtherance of
the foregoing, any Evergreen Letter of Credit that remains outstanding after the
Letter of Credit Expiration Date shall, for purposes of this Agreement and the
other Loan Documents (other than the Issuing Bank Agreement to which such
Issuing Bank is a party), be deemed to have expired on the Letter of Credit
Expiration Date.
SECTION 4.05. OBLIGATIONS ABSOLUTE. Subject to Section 4.04(e), the
payment obligations of each Lender under Section 4.04(b) and of the Borrower
under this Agreement in respect of any payment under any Letter of Credit and
any Loan deemed made under Section 4.04(c) or (d) shall be unconditional and
irrevocable (subject only to the Borrower's right to bring suit against an
Issuing Bank pursuant to Section 4.06 following the reimbursement of such
Issuing Bank for any such payment), and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including the
following circumstances:
(i) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto or to
such Letter of Credit;
(ii) any amendment or waiver of, or any consent to departure
from, all or any of the Loan Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any
beneficiary, or any transferee, of such Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), any Issuing Bank, or any other Person, whether in
connection with this Agreement, the transactions contemplated herein
or by such Letter of Credit, or any unrelated transaction;
(iv) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment in good faith by any Issuing Bank under the Letter
of Credit issued (or, pursuant to Section 4.02(d), deemed issued) by
such Issuing Bank against presentation of a draft or certificate
which does not comply with the terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
SECTION 4.06. LIABILITY OF ISSUING BANKS AND THE LENDERS. The Borrower
assumes all risks of the acts and omissions of any beneficiary or transferee of
any Letter of Credit in connection with such Letter of Credit, and neither the
Issuing Bank that has issued (or, pursuant
39
to Section 4.02(d), deemed to have issued) such Letter of Credit, the Lenders
nor any of their respective officers, directors, employees, agents or Affiliates
shall be liable or responsible for (a) the use that may be made of such Letter
of Credit or any acts or omissions of any beneficiary or transferee thereof in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by such
Issuing Bank against presentation of documents that do not comply with the terms
of such Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under such Letter
of Credit, except that the Borrower shall have the right to bring suit against
such Issuing Bank, and such Issuing Bank shall be liable to the Borrower and any
Lender, to the extent of any direct, as opposed to consequential, damages
suffered by the Borrower or such Lender which the Borrower or such Lender proves
were caused by such Issuing Bank's willful misconduct or gross negligence,
including such Issuing Bank's willful failure to make timely payment under such
Letter of Credit following the presentation to it by the beneficiary thereof of
a draft and accompanying certificate(s) which strictly comply with the terms and
conditions of such Letter of Credit. In furtherance and not in limitation of the
foregoing, any Issuing Bank may accept sight drafts and accompanying
certificates presented under the Letter of Credit issued (or, pursuant to
Section 4.02(d), deemed issued) by such Issuing Bank that appear on their face
to be in order, without responsibility for further investigation.
Notwithstanding the foregoing, no Lender shall be obligated to indemnify the
Borrower for damages caused by any Issuing Bank's willful misconduct or gross
negligence, and the obligation of the Borrower to reimburse the Lenders
hereunder shall be absolute and unconditional, notwithstanding the gross
negligence or willful misconduct of any Issuing Bank.
ARTICLE V
PAYMENTS, COMPUTATIONS AND
YIELD PROTECTION
SECTION 5.01. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make each
payment hereunder and under the other Loan Documents not later than 3:00 P.M. on
the day when due in Dollars to the Administrative Agent at its address referred
to in Section 11.02 in same day funds, except payments to be made directly to
any Issuing Bank as expressly provided herein; any payment received after 3:00
P.M. shall be deemed to have been received at the start of business on the next
succeeding Business Day. The Administrative Agent will promptly thereafter cause
to be distributed like funds relating to the payment of principal, interest,
fees or other amounts payable to the Lenders, to the respective Lenders to which
the same are payable, for the account of their respective Applicable Lending
Offices, in each case to be applied in accordance with the terms of this
Agreement. If and to the extent that any distribution of any payment from the
Borrower required to be made to any Lender pursuant to the preceding sentence
shall not be made in full by the Administrative Agent on the date such payment
was received by the Administrative Agent, the Administrative Agent shall pay to
such Lender, upon demand, interest on the unpaid amount of such distribution, at
a rate per annum equal to the Federal Funds Effective Rate, from the date of
such payment by the Borrower to the Administrative Agent to the date of payment
in full by the Administrative Agent to such Lender
40
of such unpaid amount. Upon the Administrative Agent's acceptance of a Lender
Assignment and recording of the information contained therein in the Register
pursuant to Section 11.07, from and after the effective date specified in such
Lender Assignment, the Administrative Agent shall make all payments hereunder
and under any Promissory Notes in respect of the interest assigned thereby to
the Lender assignee thereunder, and the parties to such Lender Assignment shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) The Borrower hereby authorizes the Administrative Agent, each Lender
and each Issuing Bank, if and to the extent payment owed by the Borrower to the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, is
not made when due hereunder (or, in the case of a Lender, under any Promissory
Note held by such Lender), to charge from time to time against any or all of the
Borrower's accounts with the Administrative Agent, such Lender or such Issuing
Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate (when
the Alternate Base Rate is based on the Reference Rate) shall be made by the
Administrative Agent on the basis of a year of 365 or 366 days, as the case may
be. All other computations of interest and fees hereunder (including
computations of interest based on the Eurodollar Rate and the Federal Funds
Effective Rate) shall be made by the Administrative Agent on the basis of a year
of 360 days. In each such case, such computation shall be made for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable. Each such determination
by the Administrative Agent or a Lender shall be conclusive and binding for all
purposes, absent manifest error.
(d) Whenever any payment hereunder or under any other Loan Document shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest and fees
hereunder; provided, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Loans to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date, and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, such
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender, together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal Funds Effective
Rate.
(f) Any fees, interest, costs, expenses or other amount (other than the
principal amount of any Loan, which shall accrue interest at the Applicable Rate
for such Loan) payable by the Borrower hereunder or under any of the Promissory
Notes that is not paid when due
41
(whether at stated maturity, by acceleration or otherwise) shall (to the fullest
extent permitted by law) bear interest, from the date when due until paid in
full, at a rate per annum equal at all times to the Default Rate, payable on
demand.
(g) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties,
and (ii) second, towards payment of principal then due hereunder, ratably among
the parties entitled thereto.
SECTION 5.02. INTEREST RATE DETERMINATION. The Administrative Agent shall
give prompt notice to the Borrower and the Lenders of the applicable interest
rate determined by the Administrative Agent for purposes of Section 3.05(b)(i)
or (ii).
SECTION 5.03. PREPAYMENTS. The Borrower shall have no right to prepay any
principal amount of any Loans other than as provided in subsections (a) and (b)
below.
(a) The Borrower may, upon at least three Business Days' notice, with
respect to Eurodollar Rate Loans, and one Business Day's notice, with respect to
ABR Loans, to the Administrative Agent stating the proposed date and the
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amounts of Loans made as part
of the same Borrowing, in whole or ratably in part, together with (i) accrued
interest to the date of such prepayment on the principal amount prepaid and (ii)
in the case of Eurodollar Rate Loans, and subject to Section 5.04(d), any amount
payable to the Lenders pursuant to Section 5.04(b); provided, however, that each
partial prepayment shall be in an aggregate principal amount of not less than
(A) in the case of Eurodollar Loans, $5,000,000 or an integral multiple of
$1,000,000 in excess thereof or (B) in the case of ABR Loans, $1,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.03, the Borrower shall pay or prepay so much of the
principal amount outstanding hereunder as shall be necessary in order that the
aggregate principal amount outstanding hereunder (after giving effect to all
Extensions of Credit to be made on such date and the application of the proceeds
thereof) will not exceed the Commitments following such termination or
reduction, together with (i) accrued interest to the date of such prepayment on
the principal amount prepaid and (ii) in the case of prepayments of Eurodollar
Rate Loans, and subject to Section 5.04(d), any amount payable to the Lenders
pursuant to Section 5.04(b). Any prepayments required by this subsection (b)
shall be applied to outstanding ABR Loans up to the full amount thereof before
they are applied to outstanding Eurodollar Rate Loans.
SECTION 5.04. YIELD PROTECTION.
(a) Increased Costs. If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation after the date
hereof, or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law)
issued or made after the date hereof, there shall be reasonably incurred
42
any increase in (A) the cost to any Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans, or of participating in the
issuance, maintenance or funding of any Letter of Credit, or (B) the cost to any
Issuing Bank of issuing or maintaining any Letter of Credit, then the Borrower
shall from time to time, promptly after receipt of written demand by such Lender
or Issuing Bank, as the case may be (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender or Issuing Bank, as the case may be, additional amounts sufficient to
compensate such Lender or Issuing Bank, as the case may be, for such increased
cost. A certificate as to the amount of such increased cost and giving a
reasonable explanation and calculation thereof shall be submitted to the
Borrower and the Administrative Agent by such Lender or such Issuing Bank, as
the case may be, shall constitute such demand and shall be conclusive and
binding for all purposes, absent manifest error.
(b) Breakage. If, due to any prepayment pursuant to Section 5.03, an
acceleration of maturity of the Loans pursuant to Section 9.02, or any other
reason, any Lender receives payments of principal of any Eurodollar Rate Loan
other than on the last day of the Interest Period relating to such Loan, or if
the Borrower shall Convert any Eurodollar Rate Loans on any day other than the
last day of the Interest Period therefor, the Borrower shall, promptly after
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for additional losses, costs, or expenses
(including anticipated lost profits) that such Lender may reasonably incur as a
result of such payment or Conversion, including any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain such Loan. For purposes of this
subsection (b) and Section 3.04(e), a certificate setting forth the amount of
such additional losses, costs, or expenses and giving a reasonable explanation
and calculation thereof shall be submitted to the Borrower and the
Administrative Agent by such Lender, shall constitute such demand and shall be
conclusive and binding for all purposes, absent manifest error.
(c) Capital. If any Lender or Issuing Bank determines that (i) the
introduction of or any change in or in the interpretation of any law or
regulation after the date hereof or (ii) compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) issued or made after the date
hereof, affects or would affect the amount of capital required or expected to be
maintained by such Lender or Issuing Bank, whether directly, or indirectly as a
result of commitments of any corporation controlling such Lender or Issuing Bank
(but without duplication), and the amount of such capital is increased by or
based upon (A) the existence of such Lender's or Issuing Bank's commitment to
lend or issue or participate in any Letter of Credit hereunder, or (B) the
participation in or issuance or maintenance of any Letter of Credit or Loan and
(C) other similar such commitments, then, promptly after demand by such Lender
or Issuing Bank, the Borrower shall pay to the Administrative Agent for the
account of such Lender or Issuing Bank from time to time as specified by such
Lender or Issuing Bank additional amounts sufficient to compensate such Lender
or Issuing Bank in the light of such circumstances, to the extent that such
Lender or Issuing Bank reasonably determines such increase in capital to be
allocable to the transactions contemplated hereby. A certificate as to such
amounts and giving a reasonable explanation and calculation thereof (to the
extent permitted by law) shall be submitted to the Borrower and the
43
Administrative Agent by such Lender or Issuing Bank and shall be conclusive and
binding for all purposes, absent manifest error.
(d) Notices, Etc. Each Lender hereby agrees to use its best efforts to
notify the Borrower of the occurrence of any event referred to in subsection
(a), (b) or (c) of this Section 5.04 promptly after becoming aware of the
occurrence thereof. The Borrower shall pay the Administrative Agent, for the
account of such Lender, the amount shown as due on any certificate delivered
pursuant to this Section 5.04 within ten (10) Business Days after its receipt of
the same. The failure of any Lender to provide such notice or to make demand for
payment under said subsection shall not constitute a waiver of such Lender's
rights hereunder; provided that, notwithstanding any provision to the contrary
contained in this Section 5.04, the Borrower shall not be required to reimburse
any Lender for any amounts or costs incurred under subsection (a), (b) or (c)
above, more than 90 days prior to the date that such Lender notifies the
Borrower in writing thereof, in each case unless, and to the extent that, any
such amounts or costs so incurred shall relate to the retroactive application of
any event notified to the Borrower which entitles such Lender to such
compensation. Each Lender claiming any compensation under this Section 5.04
shall use reasonable efforts to designate a different Applicable Lending Office
if such designation would not result in the incurrence by such Lender of
additional costs or expenses which it deems material or, in the sole judgment of
such Lender, be inadvisable for regulatory, competitive or internal management
reasons. If any Lender shall subsequently determine that any amount demanded and
collected under this Section 5.04 was done so in error, such Lender will
promptly return such amount to the Borrower. Notwithstanding any other provision
of this Section 5.04, no Lender or Issuing Bank shall demand compensation for
any increased cost or increased capital requirement referred to in subsection
(a) or (c) above if it shall not at the time be the general policy or practice
of such Lender or Issuing Bank (as the case may be) to demand such compensation
in similar circumstances under comparable provisions of other credit agreements,
if any.
(e) Survival of Obligations. Subject to subsection (d) above, the
Borrower's obligations under this Section 5.04 shall survive the repayment of
all other amounts owing to the Lenders, the Administrative Agent and the Issuing
Banks under the Loan Documents and the termination of the Commitments.
SECTION 5.05. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans owing to it (other than pursuant
to Section 5.04 or 11.07) in excess of its ratable share of payments obtained by
all the Lenders on account of the Loans of such Lenders, such Lender shall
forthwith purchase from the other Lenders such participation in the Loans owing
to them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any
44
Lender so purchasing a participation from another Lender pursuant to this
Section 5.05 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. Notwithstanding the foregoing, if
any Lender shall obtain any such excess payment involuntarily, such Lender may,
in lieu of purchasing participations from the other Lenders in accordance with
this Section 5.05, on the date of receipt of such excess payment, return such
excess payment to the Administrative Agent for distribution in accordance with
Section 5.01(a).
SECTION 5.06. TAXES. (a) All payments by the Borrower hereunder and under
the other Loan Documents shall be made in accordance with Section 5.01, free and
clear of and without deduction for all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender, each Issuing Bank and the Administrative
Agent, taxes imposed on its overall net or gross income, receipts, capital, net
worth, privilege of transacting business or corporate franchise taxes imposed on
it by the jurisdiction under the laws of which such Lender, such Issuing Bank or
the Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, taxes imposed on its
overall net or gross income, receipts, capital, net worth, privilege of
transacting business or corporate franchise taxes imposed on it by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "TAXES").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any other Loan Document to any Lender, any
Issuing Bank or the Administrative Agent, (i) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 5.06) such
Lender, such Issuing Bank or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, and (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other similar taxes or charges that arise from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower will indemnify each Lender, each Issuing Bank and the
Administrative Agent for the full amount of Taxes and Other Taxes (including any
Taxes and any Other Taxes imposed by any jurisdiction on amounts payable under
this Section 5.06) paid by such Lender, such Issuing Bank or the Administrative
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted, except to the extent that any
such Taxes are attributable to such Person's failure to comply with the
requirements of subsection (e) below. This indemnification shall be made within
30 days from the date such Lender, such Issuing Bank or the Administrative Agent
(as the case may be) makes written
45
demand therefor. Nothing herein shall preclude the right of the Borrower to
contest any such Taxes or Other Taxes so paid, and each Lender, each Issuing
Bank and the Administrative Agent (as the case may be) will, following notice
from, and at the expense of, the Borrower, reasonably cooperate with the
Borrower to preserve the Borrower's rights to contest such Taxes or Other Taxes.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Administrative Agent, at its address referred to in Section
11.02, the original or a certified copy of a receipt evidencing payment thereof.
(e) Each Bank represents and warrants that either (i) it is organized
under the laws of a jurisdiction within the United States or (ii) it has
delivered to the Borrower or the Administrative Agent duly completed copies of
such form or forms prescribed by the United States Internal Revenue Service
indicating that such Bank is entitled to receive payments without deduction or
withholding of any United States federal income taxes, as permitted by the Code
or any tax treaty to which the United States is a party. Each other Lender
agrees that, on or prior to the date upon which it shall become a party hereto,
and upon the reasonable request from time to time of the Borrower or the
Administrative Agent, such Lender will deliver to the Borrower and the
Administrative Agent (to the extent that it is not prohibited by law from doing
so) either (A) a statement that it is organized under the laws of a jurisdiction
within the United States or (B) duly completed copies of such form or forms as
may from time to time be prescribed by the United States Internal Revenue
Service, indicating that such Lender is entitled to receive payments without
deduction or withholding of any United States federal income taxes, as permitted
by the Internal Revenue Code. Each Bank that has delivered, and each other
Lender that hereafter delivers, to the Borrower and the Administrative Agent the
form or forms referred to in the two preceding sentences further undertakes to
deliver to the Borrower and the Administrative Agent, to the extent that it is
not prohibited by law from doing so, further copies of such form or forms, or
successor applicable form or forms, as the case may be, as and when any previous
form filed by it hereunder shall expire or shall become incomplete or inaccurate
in any respect. Each Lender represents and warrants that each such form supplied
by it to the Administrative Agent and the Borrower pursuant to this subsection
(e), and not superseded by another form supplied by it, is or will be, as the
case may be, complete and accurate, and such Lender acknowledges and agrees that
nothing contained herein shall in any way limit, waive, or otherwise reduce any
claim that the Administrative Agent or the Borrower may have against such Lender
in the event that any such form shall not be complete and accurate.
(f) Any Lender claiming any additional amounts payable pursuant to this
Section 5.06 shall use its best efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter accrue and
would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 5.06 ("ADDITIONAL AMOUNTS") who receives a tax credit, rebate,
allowance, remission, deduction, or similar tax benefit as a result of the
Borrower's payment of such Additional Amounts shall, to the extent it can do so
without prejudice to the retention of the amount of the tax benefit so
46
realized (after taking into account any net additional taxes paid in connection
with the realization thereof), notify the Borrower and pay to the Borrower (to
the extent that the same shall not already have been taken into account in
computing any amount previously paid by the Borrower or the amount of any
reimbursement previously received by such Lender) promptly after the realization
thereof an amount that is equal to the net amount thereof (or, in the event of a
deduction from taxable income, the net tax benefit generated thereby, if less
than such deduction) plus any additional tax savings resulting from the payment
of such amount to the Borrower pursuant to this sentence, provided that the
aggregate of all such payments shall not exceed the aggregate of all Additional
Amounts paid by the Borrower with respect to such Lender.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 5.06 shall survive the repayment of all other amounts owing to the
Lenders, the Administrative Agent and the Issuing Banks under the Loan Documents
and the termination of the Commitments. If and to the extent that the
obligations of the Borrower under this Section 5.06 are unenforceable for any
reason, the Borrower agrees to make the maximum contribution to the payment and
satisfaction thereof which is permissible under applicable law.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall become effective on the first date on which all of the
following conditions precedent shall be satisfied or waived:
(a) Loan Documents. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the Borrower
and each Bank, (ii) the G&R Series K Mortgage Bond, duly issued and delivered by
a duly authorized officer of the Borrower and duly authenticated by the trustee
under the General and Refunding Mortgage Indenture, (iii) an Issuing Bank
Agreement, duly executed by the Borrower and Union Bank, in form and substance
satisfactory to the Administrative Agent, (iv) the Fee Letter, duly executed by
the Borrower, in form and substance satisfactory to the Administrative Agent,
and (v) the Promissory Notes (if requested by any Lender pursuant to Section
3.01(d)), duly executed by the Borrower.
(b) Approvals. All governmental and third party approvals (including,
without limitation, any required approvals of the PUCN and any relevant Federal
regulatory bodies) necessary in connection with the transactions contemplated
herein, the issuance and delivery to the Administrative Agent of the G&R Series
K Mortgage Bond and the continuing operations of the Borrower and its
Subsidiaries shall have been obtained and be in full force and effect; and the
Administrative Agent shall have received evidence satisfactory to it that the
foregoing have been accomplished.
(c) Related Agreements. The Administrative Agent shall have received (in a
form reasonably satisfactory to the Administrative Agent) true and correct
copies, certified as to authenticity by the Borrower, of such documents or
instruments as may be reasonably requested
47
by the Administrative Agent, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which the Borrower
may be a party.
(d) Fees. The Lenders, the Administrative Agent and Union Bank (in its
capacity as Sole Lead Arranger) shall have received all fees required to be
paid, and all expenses for which invoices have been presented (including
reasonable fees, disbursements and other charges of counsel to the
Administrative Agent), on or before the Closing Date.
(e) Closing Certificates. The Administrative Agent shall have received an
officer's certificate of the Borrower, dated the Closing Date, substantially in
the form of Exhibit G, and a secretary's certificate of the Borrower, dated the
Closing Date, substantially in the form of Exhibit H, with appropriate
insertions and attachments.
(f) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to
the Borrower, substantially in the form of Exhibit C;
(ii) the legal opinion of ▇▇▇▇▇▇▇▇ and Wedge, Nevada counsel to the
Borrower, substantially in the form of Exhibit D; and
(iii) the legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special New
York counsel to the Administrative Agent, substantially in the form of
Exhibit E.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(g) G&R Series K 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 K Mortgage
Bond; a "Company Order" requesting authentication of the G&R Series K 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 K
Mortgage Bond.
(h) Moapa Acquisition Agreement. The Administrative Agent shall have
received a copy of the Moapa Acquisition Agreement (together with all exhibits
and schedules thereto), certified to be true, complete and correct by a
Responsible Officer, in form and substance satisfactory to the Administrative
Agent and the Lenders.
(i) Financial Statements and Projections. The Lenders and the
Administrative Agent shall have received and be satisfied with (i) the financial
statements referred to in Section 7.01(a) and (ii) projections for the Borrower
through the fiscal year ending December 31, 2007.
(j) Fixed Charge Coverage Ratio. The Administrative Agent shall have
received a certificate of a Responsible Officer certifying that attached thereto
is a true and correct
48
calculation of the Fixed Charge Coverage Ratio for the Borrower's most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the Closing Date, determined on a pro forma
basis (including a pro forma application of the net proceeds from the initial
Extension of Credit hereunder), as if such initial Extension of Credit had been
incurred at the beginning of such four-quarter period.
(k) Good Standing Certificate. The Administrative Agent shall have
received a certificate of good standing (or equivalent certification) issued
within five days prior to the Closing Date by the Nevada Secretary of State with
respect to the Borrower.
(l) Termination of Existing Credit Agreement. The Administrative Agent
shall have received satisfactory evidence that the Credit Agreement, dated as of
May 4, 2004, among the Borrower, the several banks and other financial
institutions or entities from time to time parties thereto, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇ Brothers Inc., as
joint lead arrangers and joint bookrunners, ▇▇▇▇▇▇ Commercial Paper Inc., as
syndication agent, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation, as documentation agent
and administrative agent, has been irrevocably terminated and all obligations of
the Borrower thereunder have been paid in full.
(m) Other Approvals, Etc. The Administrative Agent shall have received
such other approvals, opinions and documents as any Lender, through the
Administrative Agent, may reasonably request.
The parties hereto hereby acknowledge that the conditions precedent set
forth in Sections 6.01(a)(iii), 6.01(a)(iv), 6.01(i) and 6.01(j) were previously
satisfied on the Initial Closing Date and that the documents described therein
will not be required to be redelivered in connection with this Agreement.
SECTION 6.02. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The
obligation of each Lender or Issuing Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit, but excluding
Conversions) shall be subject to the further conditions precedent that (a) the
statements contained in the following clauses (b)(i) and (b)(ii) shall be true
and (b) the Administrative Agent shall have received a certificate of the
Borrower, dated the date of such Extension of Credit, certifying that (i) each
of the representations and warranties made by the Borrower in or pursuant to the
Loan Documents (other than, in the case of any Extension of Credit other than
the initial Extension of Credit, the representations and warranties set forth in
Sections 7.01(b) and 7.01(f) of this Agreement) is true and correct in all
material respects on and as of the date of such Extension of Credit as if made
on such date and (ii) no Default or Event of Default has occurred and is
continuing on the date of such Extension of Credit or after giving effect to the
Extensions of Credit requested to be made on such date. The Administrative Agent
shall be conclusively entitled to rely on the accuracy of the statements
contained in each certificate delivered by the Borrower pursuant to this Section
6.02.
SECTION 6.03. DETERMINATIONS UNDER SECTION 6.01. For purposes of
determining compliance with the conditions specified in Section 6.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the
49
Lenders unless an officer of the Administrative Agent responsible for the
transactions contemplated by this Agreement shall have received written notice
from such Lender prior to the date hereof specifying its objection thereto.
SECTION 6.04. RELIANCE ON CERTIFICATES. The Lenders, the Issuing Banks and
the Administrative Agent shall be entitled to rely conclusively upon the
certificates delivered from time to time by officers of the Borrower as to the
names, incumbency, authority and signatures of the respective individuals named
therein until such time as the Administrative Agent may receive a replacement
certificate, in form acceptable to the Administrative Agent, from an officer of
such Person identified to the Administrative Agent as having authority to
deliver such certificate, setting forth the names and true signatures of the
officers and other representatives of such Person thereafter authorized to act
on behalf of such Person.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. To induce
the Administrative Agent, the Issuing Banks and the Lenders to enter into this
Agreement and to make Extensions of Credit, the Borrower hereby represents and
warrants to the Administrative Agent, each Issuing Bank and each Lender that:
(a) Financial Condition. The audited consolidated balance sheets of the
Borrower as at December 31, 2002 and December 31, 2003 and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
Deloitte & Touche LLP, present fairly the consolidated financial condition of
the Borrower as at such dates, and the consolidated results of its operations
and its consolidated cash flows for the respective fiscal years then ended. 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 Guarantees, 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, 2003 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.
(b) No Change. Since December 31, 2003, 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 7.01(b).
(c) Corporate Existence; Compliance with Law. Each of the Borrower and its
Subsidiaries (i) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) 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, (iii) is duly qualified as a foreign corporation and in
50
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 (iv) is in compliance with all Requirements of Law, except to the extent
that, in the case of clauses (ii), (iii) and (iv) above, the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(d) 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, to authorize the issuance and delivery of the G&R Series
K Mortgage Bond on the terms and conditions of this Agreement and to authorize
such 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 7.01(d),
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).
(e) No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the Extensions of Credit 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. 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.
(f) 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 (i) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (ii) that could reasonably be expected to have a Material
Adverse Effect, except as set forth on Schedule 7.01(f).
(g) 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 7.01(g). No Default or Event of Default has
occurred and is continuing.
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(h) 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 for
Permitted Liens.
(i) Intellectual Property. The Borrower and each of its Subsidiaries owns,
or is licensed to use, all Intellectual Property necessary for the conduct of
its business as currently conducted. No material claim has been asserted and is
pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
the Borrower know of any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person in any material respect.
(j) 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.
(k) Federal Regulations. No part of the proceeds of any Extension of
Credit 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.
(l) Government Approval and Filings. The PUCN 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 to incur the maximum amount of indebtedness
provided for in this Agreement and the other Loan Documents, and such authority
granted to the Borrower pursuant to such order has not been rescinded, revoked
or otherwise modified and remains in full force and effect. 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.
(m) 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
52
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.
(n) 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.
(o) 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 PUCN).
(p) Subsidiaries. (i) The Subsidiaries listed on Schedule 7.01(p)
constitute all the Subsidiaries of the Borrower at the date hereof. Schedule
7.01(p) 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.
(ii) 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.
(q) Use of Proceeds. The proceeds of the Extensions of Credit shall be
used to finance the purchase price under the Moapa Acquisition Agreement, to pay
transaction fees and expenses incurred by the Borrower in connection therewith,
and for other general corporate purposes.
(r) 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:
53
(i) The Borrower and its Subsidiaries: (A) are, and within the
period of all applicable statutes of limitation have been, in compliance
with all applicable Environmental Laws; (B) hold all Environmental Permits
(each of which is in full force and effect) required for any of their
current or intended operations or for any property owned, leased, or
otherwise operated by any of them; (C) are, and within the period of all
applicable statutes of limitation have been, in compliance with all of
their Environmental Permits; and (D) 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.
(ii) 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 (A) 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
(B) interfere with the Borrower's or any of its Subsidiaries' continued
operations, or (C) materially adversely affect the fair saleable value of
any real property owned or leased by the Borrower or any of its
Subsidiaries.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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.
54
(s) Accuracy of Information, etc. No statement or information contained in
this Agreement, any other Loan Document or any other document, certificate or
statement furnished to the Administrative Agent or the Lenders or any of them,
by or on behalf of the Borrower for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to the Borrower that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan Documents
or in any other documents, certificates and statements furnished to the
Administrative Agent and the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
(t) G&R Series K Mortgage Bond. (i) The G&R Series K Mortgage Bond, when
executed by the Borrower and authenticated by the trustee under the General and
Refunding Mortgage Indenture in accordance with the General and Refunding
Mortgage Indenture and delivered to the Administrative Agent in accordance with
the terms hereof, will constitute a valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally. The
Borrower has all requisite corporate power and authority to issue and deliver
the G&R Series K Mortgage Bond in accordance with and upon the terms and
conditions set forth herein.
(ii) The G&R Series K 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; and 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).
(u) 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.
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. AFFIRMATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall
55
remain outstanding or any Lender shall have any Commitment, the Borrower shall
and shall cause each of its Subsidiaries to:
(a) Financial Statements. Furnish to the Administrative Agent and each
Lender:
(i) 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 form the figures 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 independent
certified public accountants of nationally recognized standing; and
(ii) 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 for 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 shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.
(b) Certificates; Other Information. Furnish to the Administrative Agent
and each Lender, or, in the case of clause (iii) below, to the relevant Lender:
(i) concurrently with the delivery of any financial statements
pursuant to Section 8.01(a), (A) 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 (B) a schedule in
form satisfactory to the Administrative Agent of the computations used by
the Borrower in determining, as of the end such fiscal year or quarter (as
the case may be), compliance with the covenants contained in Section 8.03;
(ii) 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; and
56
(iii) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
(c) 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.
(d) Conduct of Business and Maintenance of Existence, etc. (i) (A)
Preserve, renew and keep in full force and effect its corporate existence and
(B) 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 8.02(c) and except, in the case of
clause (B) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (ii) comply with all Contractual
Obligations and Requirements of Law, except (x) to the extent that failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect and (y) as described on Schedule 7.01(g).
(e) Maintenance of Property; Insurance. (i) Keep all Property and systems
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (ii) 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.
(f) Inspection of Property; Books and Records; Discussions. (i) 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 (ii) permit
representatives of any Lender (at such Lender's expense, 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.
(g) Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(i) the occurrence of any Default or Event of Default;
(ii) any (A) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (B) 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;
57
(iii) 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;
(iv) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (A)
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 (B) 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
(v) 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.
(h) Environmental Laws. (i) 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.
(ii) 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.
SECTION 8.02. NEGATIVE COVENANTS. So long as any Loan or any other amount
payable hereunder or under any Promissory Note shall remain unpaid, any Letter
of Credit shall remain outstanding or any Lender shall have any Commitment, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
(a) Limitation on Indebtedness and Preferred Stock. (i) Create, incur,
issue, assume, Guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "INCUR") any
Indebtedness (including Acquired Debt), or issue any Disqualified Stock or, in
the case of any Subsidiary of the Borrower, issue any shares of preferred stock;
provided, however, that the Borrower may incur Indebtedness (including Acquired
Debt) or issue Disqualified Stock, and the Subsidiary Guarantors may incur
Indebtedness (including Acquired Debt) or issue Disqualified Stock if the Fixed
Charge Coverage Ratio for the Borrower's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock is issued would have been at least
58
2.0 to 1, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been incurred
or Disqualified Stock had been issued, as the case may be, at the beginning of
such four-quarter period.
(ii) Section 8.02(a) will not prohibit the incurrence of any of the
following items of Indebtedness (collectively, "PERMITTED DEBT"):
(A) the incurrence by the Borrower of additional Indebtedness
and letters of credit under one or more Credit Facilities (with
letters of credit being deemed to have a principal amount equal to
the maximum potential liability of the Borrower thereunder) in an
aggregate amount up to $50,000,000 at any time outstanding;
(B) the incurrence by the Borrower of Indebtedness pursuant to
any Loan Document, the aggregate principal amount of which is
evidenced by the G&R Series K Mortgage Bond, and the incurrence by
any Subsidiary Guarantor of a Subsidiary Guarantee of such
Indebtedness pursuant to Section 8.02(o);
(C) the incurrence by the Borrower and its Subsidiaries of the
Existing Indebtedness;
(D) the incurrence by the Borrower of $130,000,000 aggregate
principal amount of Indebtedness represented by the 6-1/2% General
and Refunding Mortgage Notes, Series I, due 2012 issued under the
General and Refunding Mortgage Indenture (and the related exchange
notes to be issued pursuant to the registration rights agreement)
and the incurrence by any Subsidiary Guarantor of a Subsidiary
Guarantee of such Indebtedness (including, without limitation, the
related exchange notes to be issued pursuant to the registration
rights agreement entered into in connection therewith);
(E) the incurrence by the Borrower or any of the Subsidiary
Guarantors of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property,
plant or equipment used in the business of the Borrower or such
Subsidiary Guarantor, in an aggregate principal amount, including
all Permitted Refinancing Indebtedness incurred to refund, refinance
or replace any Indebtedness incurred pursuant to this clause (E),
not to exceed $20,000,000 at any time outstanding;
(F) the incurrence by the Borrower or any of its Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was
incurred under Section 8.02(a)(i) or clauses (C), (D) (E) or (L) of
this Section 8.02(a)(ii);
59
(G) the incurrence by the Borrower or any of its Subsidiaries
of intercompany Indebtedness between or among the Borrower or any of
its Subsidiaries; provided, however, that:
(1) if the Borrower is the obligor on such Indebtedness,
such Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Loans and other Obligations;
(2) if a Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to
the prior payment in full in cash of such Subsidiary
Guarantor's Subsidiary Guarantee;
(3) (x) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by
a Person other than the Borrower or a Subsidiary of the
Borrower and (y) any sale or other transfer of any such
Indebtedness to a Person that is not either the Borrower or a
Subsidiary of the Borrower shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Borrower
or such Subsidiary, as the case may be, that was not permitted
by this clause (G); and
(4) any Indebtedness issued by the Borrower or a
Subsidiary to a Trust Preferred Vehicle shall not be treated
as intercompany Indebtedness for purposes of this clause (G)
to the extent of the face amount of the beneficial interests
of the Trust Preferred Vehicle that are not held by the
Borrower or any of its Subsidiaries;
(H) the incurrence by the Borrower or any of its Subsidiaries
of Hedging Obligations;
(I) the Guarantee by the Borrower or any of its Subsidiaries
of Indebtedness of the Borrower or any Subsidiary of the Borrower
that was permitted to be incurred by another provision of this
Section 8.02(a); provided that in the event the Indebtedness that is
being Guaranteed is Subordinated Debt, then the Guarantee of that
Indebtedness shall be subordinated in right of payment to the Loans
and other Obligations on substantially identical terms;
(J) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness
in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional
shares of such Disqualified Stock, each of which will not be deemed
to be an incurrence of Indebtedness or an issuance of Disqualified
Stock for purposes of this Section 8.02(a); provided, in each such
case, that the amount thereof is included in the Fixed Charges of
the Borrower as accrued;
60
(K) Indebtedness in respect of bid, performance or surety
bonds issued for the account of the Borrower or any Subsidiary of
the Borrower in the ordinary course of business, including
Guarantees or obligations of the Borrower or any Subsidiary of the
Borrower with respect to letters of credit supporting such bid,
performance or surety obligations (in each case other than for an
obligation for money borrowed);
(L) the incurrence by the Borrower of additional Indebtedness
consisting of securities issued pursuant to the General and
Refunding Mortgage Indenture in respect of claims relating to the
Borrower's obligations pursuant to agreements with gas, electric
power and other energy suppliers that have been terminated as of
Closing Date;
(M) the incurrence by the Borrower or any of its Subsidiaries
of additional Indebtedness consisting of letters of credit for
purposes of supporting the Borrower's or any such Subsidiary's
obligations now or hereafter owing to gas, electric power or other
energy suppliers, not to exceed $20,000,000 at any time outstanding;
(N) the incurrence by the Borrower of additional Indebtedness
to finance capital expenditures incurred pursuant to the Borrower's
2003 Resource Plan as approved or amended under order by the PUCN or
mandated by statute or by one or more federal or state regulatory
authorities, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (N); and
(O) the incurrence by the Borrower or any Subsidiary of
additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable), including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (O), not to exceed
$40,000,000 at any time outstanding.
(iii) Notwithstanding anything to the contrary in this Agreement,
the Borrower will not issue any additional notes or bonds under its First
Mortgage Indenture.
(iv) The Borrower will not incur any Indebtedness (including
Permitted Debt) that is contractually subordinated in right of payment to
any other Indebtedness of the Borrower unless such Indebtedness is also
contractually subordinated in right of payment to the Loans and other
Obligations on substantially identical terms; provided, however, that no
Indebtedness of the Borrower will be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Borrower
solely by virtue of being secured on a junior basis or by virtue of being
unsecured.
(v) For purposes of determining compliance with this Section
8.02(a):
(A) in the event that an item of proposed Indebtedness,
including Acquired Debt, meets the criteria of more than one of the
categories of Permitted
61
Debt described in clauses (A) through (O) of Section 8.02(a)(ii), or
is entitled to be incurred pursuant to Section 8.02(a)(i), the
Borrower will be permitted to classify (or later classify or
reclassify such Indebtedness, in whole or in part in its sole
discretion) such item of Indebtedness in any manner that complies
with this Section 8.02(a); and
(B) for the purposes of determining compliance with any
dollar-denominated restriction on the incurrence of Indebtedness
denominated in a foreign currency, the dollar-equivalent principal
amount of such Indebtedness incurred pursuant thereto shall be
calculated based on the relevant currency exchange rate in effect on
the date that such Indebtedness was incurred.
(b) Limitation on Liens. Create, incur, assume or suffer to exist any Lien
of any kind securing Indebtedness, Attributable Debt or trade payables on any of
its Property, whether now owned or hereafter acquired, except for the following
(the "PERMITTED LIENS"):
(i) Liens securing the liabilities and obligations of the Borrower
under the Loan Documents and Liens securing any Hedging Obligations
relating to such liabilities and obligations;
(ii) Liens in favor of the Borrower or any Subsidiary Guarantors;
(iii) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Borrower or any Subsidiary
of the Borrower; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Borrower or such Subsidiary;
(iv) Liens on property existing at the time of acquisition of the
property by the Borrower or any Subsidiary of the Borrower; provided that
such Liens were in existence prior to the contemplation of such
acquisition;
(v) Liens to secure the performance of statutory or regulatory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business;
(vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 8.02(a)(ii)(E) covering only the assets
acquired with such Indebtedness;
(vii) Liens existing on the Closing Date listed on Schedule
8.02(b)(vii) (including the Lien of the First Mortgage Indenture and the
Lien of the General and Refunding Mortgage Indenture);
(viii) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings
62
promptly instituted and diligently concluded; provided that any reserve or
other appropriate provision as is required in conformity with GAAP has
been made therefor;
(ix) Liens incurred in the ordinary course of business of the
Borrower or any of its Subsidiaries with respect to obligations (including
Hedging Obligations) that do not exceed $15,000,000 at any one time
outstanding;
(x) Liens to secure Indebtedness permitted by clauses (H), (M), (N)
or (O) of Section 8.02(a)(ii);
(xi) Liens securing any other Indebtedness issued or to be issued
under the General and Refunding Mortgage Indenture that was permitted to
be incurred under Section 8.02(a);
(xii) Liens securing Permitted Refinancing Indebtedness incurred to
refinance Indebtedness that was previously so secured; provided that any
such Lien is limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or, under the written arrangements under
which the original Lien arose, could secure) the Indebtedness being
refinanced or is in respect of property that is the security for a
Permitted Lien hereunder; and
(xiii) Liens, including pledges, rights of offset and bankers'
liens, on deposit accounts, instruments, investment accounts and
investment property (including cash, cash equivalents and marketable
securities) from time to time maintained with or held by any financial
and/or depository institutions, in each case solely to secure any and all
obligations now or hereafter existing of the Borrower or any of its
Subsidiaries in connection with any deposit account, investment account or
cash management service (including ACH, Fedwire, CHIPS, concentration and
zero balance accounts, and controlled disbursement, lockbox or restricted
accounts) now or hereafter provided by any financial and/or depository
institutions to or for the benefit of the Borrower or any of its
Subsidiaries.
(c) 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:
(i) 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
(ii) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower.
(d) Limitation on Disposition of Property. Dispose of any of its Property
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter
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acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary's Capital Stock to any Person, except:
(i) the Disposition of obsolete or worn out property in the ordinary
course of business;
(ii) the sale of inventory in the ordinary course of business;
(iii) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower;
(iv) the Disposition of other assets having a fair market value not
to exceed $10,000,000 in the aggregate for any fiscal year of the
Borrower; and
(v) the Disposition of certain parcels of land listed on Schedule
8.02(d).
(e) Limitation on Restricted Payments. (i) Declare or pay any dividend or
make any other payment or distribution on account of the Borrower's or any of
its Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Borrower or any of
its Subsidiaries) or to the direct or indirect holders of the Borrower's or any
of its Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than Disqualified
Stock) of the Borrower) or to the Borrower or a Subsidiary of the Borrower; (ii)
purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving the
Borrower) any Equity Interests of the Borrower or any direct or indirect parent
of the Borrower; (iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value, any Subordinated Debt,
except a payment of interest or principal at the Stated Maturity thereof; or
(iv) make any Restricted Investment (all such payments and other actions set
forth in these clauses (i) through (iv) above being collectively referred to as
"RESTRICTED PAYMENTS"), unless, at the time of and after giving effect to such
Restricted Payment:
(A) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted
Payment;
(B) the Borrower would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to Section 8.02(a)(i); and
(C) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Borrower and its
Subsidiaries after the Closing Date (excluding Restricted Payments
permitted by clauses (2), (3), (4), (6) and (8) of the next
succeeding paragraph), is less than the sum, without duplication,
of:
(I) 50% of the Consolidated Net Income of the Borrower
for the period (taken as one accounting period) from the
beginning of the first
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fiscal quarter commencing after the Closing Date to the end of
the Borrower's most recently ended fiscal quarter for which
internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus
(II) 100% of the aggregate net cash proceeds received by
the Borrower (including the fair market value of any Permitted
Business or assets used or useful in a Permitted Business to
the extent acquired in consideration of Equity Interests
(other than Disqualified Stock) of the Borrower) since the
Closing Date as a contribution to its common equity capital or
from the issue or sale of Equity Interests of the Borrower
(other than Disqualified Stock and other than sales to a
Subsidiary of the Borrower) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible
or exchangeable debt securities of the Borrower that have been
converted into or exchanged for such Equity Interests (other
than Disqualified Stock or debt securities sold to a
Subsidiary of the Borrower), plus
(III) to the extent that any Restricted Investment that
was made after the Closing Date is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (x) the cash
return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (y) the initial
amount of such Restricted Investment.
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Agreement;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any Subordinated Debt of the Borrower or any Subsidiary
Guarantor or of any Equity Interests of the Borrower or any of its
Subsidiaries in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Borrower)
of, Equity Interests of the Borrower (other than Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement, defeasance or other
acquisition will be excluded from clause (C)(II) of the preceding
paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
Subordinated Debt of the Borrower with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Subsidiary of the Borrower to
the holders of its Equity Interests on a pro rata basis;
65
(5) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Borrower or any Subsidiary of the
Borrower held by any member of the Borrower's (or any of its
Subsidiaries') management pursuant to any management equity subscription
agreement, stock option agreement or similar agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests may not exceed $1,500,000 in any twelve-month
period;
(6) the payment of any distribution by a Trust Preferred Vehicle to
holders of such trust's preferred beneficial interests, to the extent such
distribution does not exceed the amount that is contemporaneously received
by such trust as a payment of interest at its Stated Maturity on the
Subordinated Debt of the Borrower held by such trust;
(7) payments to Sierra Pacific Resources to enable Sierra Pacific
Resources to pay its reasonable expenses (including, but not limited to,
principal, premium, if any, and interest on Sierra Pacific Resources'
Indebtedness and payment obligations on account of Sierra Pacific
Resource's Premium Income Equity Securities) incurred in the ordinary
course of business, which expenses shall not be greater than $60,000,000
for any one calendar year; provided that (x) any such payment complies
with any regulatory restrictions then applicable to the Borrower and (y)
the Fixed Charge Coverage Ratio for the Borrower's most recently ended
four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which any such payment is made
was at least 1.75 to 1; and
(8) other Restricted Payments in an aggregate amount since the
Closing Date not to exceed $25,000,000;
provided that, with respect to clauses (2), (3), (5), (7) and (8) above,
no Default or Event of Default shall have occurred and be continuing
immediately after such transaction.
The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Borrower or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. The fair market value of any
assets or securities that are required to be valued by this covenant will be
determined by the Board of Directors of the Borrower. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $25,000,000. Not later than the date of making any
Restricted Payment, the Borrower will deliver to the Administrative Agent an
officer's certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
8.02(e) were computed, together with a copy of any fairness opinion or appraisal
required under this Agreement.
(f) Modifications of Instruments, etc. Amend or modify (i) its certificate
of incorporation, (ii) the General and Refunding Mortgage Indenture or (iii) the
First Mortgage Indenture, in each case in any manner determined by the
Administrative Agent to be adverse to the Lenders.
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(g) Limitation on Transactions with Affiliates. 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 or any Subsidiary) unless such transaction is (i) otherwise permitted
under this Agreement, (ii) in the ordinary course of business or consistent with
past practice of the Borrower or such Subsidiary, as the case may be, and (iii)
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.
(h) Limitation on Sales and Leasebacks. Enter into any arrangement with
any Person providing for the leasing by the Borrower or any of its Subsidiaries
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 (a "SALE AND
LEASEBACK TRANSACTION"); provided that the Borrower or any of its Subsidiaries
may enter into a Sale and Leaseback Transaction if:
(i) the Borrower or such Subsidiary, as applicable, could have
incurred Indebtedness in an amount equal to the Attributable Debt relating
to such Sale and Leaseback Transaction under Section 8.02(a)(i);
(ii) the gross cash proceeds of such Sale and Leaseback Transaction
are at least equal to the fair market value, as determined in good faith
by the Board of Directors of the Borrower and set forth in an officer's
certificate delivered to the Administrative Agent, of the property that is
the subject of such Sale and Leaseback Transaction; and
(iii) the transfer of assets in such Sale and Leaseback Transaction
is permitted by Section 8.02(d).
(i) 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.
(j) Limitation on Negative Pledge Clauses. Enter into or suffer to exist
or become effective any agreement that (i) prohibits or limits the ability of
the Borrower or any of its Subsidiaries 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 (x) this Agreement and
the other Loan Documents, (y) 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 (z) any restriction in effect on the date hereof or (ii) contains
covenants more restrictive than the covenants in this Section 8.02, 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 for so long as such
more restrictive covenants remain in effect under such other agreement.
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(k) Limitation on Restrictions on Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary to (i) pay dividends or make other distributions
on its Capital Stock to the Borrower or any of its Subsidiaries, or with respect
to any other interest or participation in, or measured by, its profits, or pay
any Indebtedness owed to the Borrower or any of its Subsidiaries, (ii) make
loans or advances to the Borrower or any other Subsidiary or (iii) transfer any
of its properties or assets to the Borrower or any other Subsidiary, except for
such dividend and other payment restrictions existing under or by reason of:
(A) any restrictions existing under Loan Documents;
(B) any restrictions existing under the Existing Indebtedness
as in effect on the Closing Date and other customary encumbrances
and restrictions existing on or after the Closing Date that are not
more restrictive, taken as a whole, with respect to such dividend
and other payment restrictions than those contained in those
agreements on the Closing Date; provided that the application of
such restrictions or encumbrances to additional Subsidiaries not
subject thereto on the Closing Date shall not be deemed to make such
restrictions more restrictive;
(C) the General and Refunding Mortgage Indenture and other
customary encumbrances and restrictions existing in indentures after
the Closing Date that are not more restrictive, in any material
respect, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in the General and
Refunding Mortgage Indenture;
(D) applicable law (including without limitation, rules,
regulations and agreements with regulatory authorities) or any order
issued pursuant to a federal or state statute or any order by or
agreement with any court or governmental agency or body having
jurisdiction over the Borrower or any of its Subsidiaries or any of
their respective properties;
(E) any instrument governing Indebtedness or Capital Stock of
a Person acquired by the Borrower or any of its Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the
Person, so acquired; provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of Section 8.02(a) to
be incurred;
(F) customary non-assignment provisions in leases entered into
in the ordinary course of business and consistent with past
practices;
(G) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on such
property of the nature described in clause (iii) above;
68
(H) any agreement for the sale or other disposition of a
Subsidiary that restricts distributions or dispositions of assets by
such Subsidiary pending its sale or other disposition;
(I) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness
being refinanced;
(J) Liens securing Indebtedness otherwise permitted to be
incurred under Section 8.02(b) that limit the right of the debtor to
dispose of the assets subject to such Liens; and
(K) provisions with respect to the disposition or distribution
of assets or property in joint venture agreements, asset sale
agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business.
(l) Limitation on Modifications to Subordinated Debt. 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)).
(m) 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.
(n) Limitation 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 (i)
Dispose of such assets or (ii) subject such assets again to the Lien of the
General and Refunding Mortgage Indenture.
(o) Limitation on Subsidiary Guarantees. Permit any Subsidiary to
Guarantee the payment of any Indebtedness of the Borrower unless:
(i) such Subsidiary simultaneously executes and delivers to the
Administrative Agent a Subsidiary Guarantee of such Subsidiary, except
that, with respect to a Guarantee of Indebtedness of the Borrower if such
Indebtedness is by its express terms subordinated in right of payment to
the Loans and other Obligations, any such Guarantee of such Subsidiary
with respect to such Indebtedness shall be subordinated in right of
payment to such Subsidiary's Subsidiary Guarantee with respect to the
Loans and such other Obligations substantially to the same extent as such
Indebtedness is subordinated to the Loans and such other Obligations;
69
(ii) such Subsidiary waives, and will not in any manner whatsoever
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Borrower or any
other Subsidiary of the Borrower as a result of any payment by such
Subsidiary under its Subsidiary Guarantee of the Loans and other
Obligations; and
(iii) such Subsidiary shall deliver to the Administrative Agent an
opinion of counsel to the effect that (A) such Subsidiary Guarantee has
been duly executed and authorized and (B) such Subsidiary Guarantee
constitutes a valid, binding and enforceable obligation of such
Subsidiary, except insofar as enforcement thereof may be limited by
bankruptcy, insolvency or similar laws (including, without limitation, all
laws relating to fraudulent transfers) and except insofar as enforcement
thereof is subject to general principles of equity;
provided that this Section shall not be applicable to any Guarantee of any
Subsidiary that (A) existed at the time such Person became a Subsidiary of the
Borrower and (B) was not incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary of the Borrower.
Notwithstanding the foregoing and the other provisions of this Agreement,
in the event a Subsidiary Guarantor is sold or Disposed of (whether by merger,
consolidation, the sale of its Capital Stock or the sale of all or substantially
all of its assets (other than by lease) and whether or not the Subsidiary
Guarantor is the surviving corporation in such transaction) to a Person which is
not the Borrower or a Subsidiary of the Borrower, such Subsidiary Guarantor will
be released from its obligations under its Subsidiary Guarantee if (1) the sale
or other Disposition is in compliance with Section 8.02(d) and (2) the
Subsidiary Guarantor is also released or discharged from its obligations under
the Guarantee which resulted in the creation of such Subsidiary Guarantee,
except by or as a result of payment under such Guarantee.
SECTION 8.03. FINANCIAL COVENANTS.
(a) Maximum Leverage. The Borrower shall not permit the ratio of (a)
Consolidated Indebtedness to (b) Consolidated Capital, determined as of the last
day of each fiscal quarter, to exceed 0.68 to 1.
(b) Consolidated Interest Coverage Ratio. The Borrower shall not permit
the Consolidated Interest Coverage Ratio, determined as of the last day of each
fiscal quarter for the period of four consecutive fiscal quarters ended as of
such last day, to be less than 2.0 to 1.
(c) Compliance Period. The covenants set forth in subsections (a) and (b)
above shall have no further force or effect, and the Borrower shall no longer be
required to comply therewith, at any time after October 8, 2007, unless at any
such time any Loan or any other amount payable hereunder or under any Promissory
Note shall remain unpaid or any Letter of Credit shall remain outstanding.
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ARTICLE IX
DEFAULTS
SECTION 9.01. EVENTS OF DEFAULT. If any of the following events shall
occur and be continuing, the Administrative Agent and the Lenders shall be
entitled to exercise the remedies set forth in Section 9.02:
(a) The Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Loan, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes due
in accordance with the terms hereof or thereof; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or in any other Loan Document or that is contained in any certificate,
document or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made or furnished; or
(c) The Borrower shall default in the observance or performance of any
agreement contained in clause (A) or (B) of Section 8.01(d)(i), Section
8.01(g)(i), Section 8.02 or Section 8.03; 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 Guarantees, but excluding the Loans) on the scheduled or
original due date with respect thereto; or (B) default in making any payment of
any interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (C) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or to become subject to a mandatory offer to
purchase by the obligor thereunder or (in the case of any such Indebtedness
constituting a Guarantee) to become payable; or (ii) the Borrower or any of its
Subsidiaries shall, other than in respect of those Hedge Agreements listed on
Schedule 9.01(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
71
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 $15,000,000; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
that results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any of its Subsidiaries shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) 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
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(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 $15,000,000 or more,
and all such judgments or decrees shall not have been vacated, discharged,
stayed, paid or bonded pending appeal within 60 days from the entry thereof; or
(i) Any of the Loan 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
Loan 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 Event of Default under (and as defined in) the General and
Refunding Mortgage Indenture shall occur; or
(k) Any Event of Default under (and as defined in) the First Mortgage
Indenture shall occur, other than any such matured Event of Default that (i) is
of similar kind or character to the Events of Default described in paragraphs
(c) and (d) of this Section 9.01 and (ii) has not resulted in the acceleration
of the securities outstanding under the First Mortgage Indenture; provided,
however, that, anything in this Agreement to the contrary notwithstanding, the
waiver or cure of such Event of Default under the First Mortgage Indenture and
the rescission and annulment of the consequences thereof under the First
Mortgage Indenture shall constitute a cure of the corresponding Event of Default
under this paragraph (k) and a rescission and annulment of the consequences
thereof; or
(l) Any Change of Control shall occur; or
(m) At any time any Issuing Bank shall have been served with or otherwise
subjected to a court order, injunction, or other process or decree issued or
granted at the instance of the Borrower restraining or seeking to restrain such
Issuing Bank from paying any amount under any Letter of Credit issued by it and
either (i) there has been a drawing under such Letter of Credit which such
Issuing Bank would otherwise be obligated to pay or (ii) the stated expiration
date or any reduction of the stated amount of such Letter of Credit has occurred
but the right of the beneficiary to draw thereunder has been extended to a date
after the Letter of Credit Expiration Date in connection with the pendency of
the related court action or proceeding.
SECTION 9.02. REMEDIES. If any Event of Default has occurred and is
continuing, then the Administrative Agent shall at the request, or may with the
consent, of the Required Lenders, upon notice to the Borrower (i) declare the
Commitments and the obligation of each Lender to make or Convert Loans (other
than Loans under Section 4.04(b)) and of any Issuing Bank to issue a Letter of
Credit to be terminated, whereupon the same shall forthwith terminate, (ii)
declare the principal amount outstanding hereunder, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the principal amount outstanding hereunder,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further
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notice of any kind, all of which are hereby expressly waived by the Borrower,
and/or (iii) require the Borrower to pay immediately to the Administrative Agent
an amount equal to the aggregate LC Outstandings of all Letters of Credit then
outstanding, to be held by the Administrative Agent (for its benefit and the
benefit of the Issuing Banks and the Lenders) as cash collateral securing LC
Outstandings and the Borrower's reimbursement obligations with respect thereto;
provided, however, upon the occurrence of any Event of Default specified in
Section 9.01(f)(i) or 9.01(f)(ii) with respect to the Borrower, (A) the
Commitments and the obligation of each Lender to make Loans and of any Issuing
Bank to issue any Letter of Credit shall automatically be terminated, (B) the
principal amount outstanding hereunder, all such interest and all such amounts
shall automatically become and be immediately due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower, and (C) the Borrower shall pay immediately to
the Administrative Agent an amount equal to the aggregate LC Outstandings of all
Letters of Credit then outstanding, to be held by the Administrative Agent (for
its benefit and the benefit of the Issuing Banks and the Lenders) as cash
collateral securing LC Outstandings and the Borrower's reimbursement obligations
with respect thereto. Notwithstanding anything to the contrary contained herein,
no notice given or declaration made by the Administrative Agent pursuant to this
Section 9.02 shall affect (1) the obligation of any Issuing Bank to make any
payment under any Letter of Credit issued by such Issuing Bank in accordance
with the terms of such Letter of Credit or (2) the participatory interest of
each Lender in each such payment.
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.01. AUTHORIZATION AND ACTION.
(a) Each of the Lenders and the Issuing Banks hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
(b) Any Lender serving as Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Lender and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any of its Subsidiaries or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
(c) The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (i) the Administrative Agent (in such capacity)
shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or an Event of Default has occurred and is continuing, (ii)
the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
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circumstances as provided in Section 11.01), and (iii) except as expressly set
forth in the Loan Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries or Affiliates that is
communicated to or obtained by the Lender serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 11.01) or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default or Event of Default
unless and until written notice thereof is given to the Administrative Agent by
the Borrower or a Lender (in which case the Administrative Agent shall promptly
give a copy of such written notice to the Lenders and the Issuing Banks). The
Administrative Agent shall not be responsible to any of the Lenders or Issuing
Banks for or have any duty to ascertain or inquire into (A) any statement,
warranty or representation made in or in connection with any Loan Document, (B)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (C) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (D) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (E) the
satisfaction of any condition set forth in Article VI or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
(d) The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in good faith in accordance with the advice of any such counsel, accountants or
experts.
(e) The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through one or more sub-agents appointed by
the Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
subsections of this Section 10.01 shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.
(f) Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this subsection (f), the Administrative
Agent may resign at any time by notifying the Lenders, the Issuing Banks and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
with the consent of the Borrower (which consent shall not be unreasonably
withheld or delayed, and shall not be required upon the occurrence and during
the continuance of an Event of Default), to appoint a successor. If no successor
shall have been so appointed by the
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Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Banks, appoint a successor Administrative Agent which shall be a Lender or an
Affiliate of a Lender. Upon the acceptance of its appointment as Administrative
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the Administrative Agent's resignation hereunder, the provisions of this
Article and Section 11.04 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.
(g) Each Lender acknowledges that it has independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
SECTION 10.02. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective Percentages of the Lenders, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Administrative Agent in
any way relating to or arising out of this Agreement or any other Loan Document
(other than the Fee Letter) or any action taken or omitted by the Administrative
Agent under this Agreement or any other Loan Document (other than the Fee
Letter), provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct, as determined by the final and nonappealable
judgment of a court of competent jurisdiction. Without limitation of the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
counsel fees) incurred by the Administrative Agent in connection with the
preparation, execution, syndication, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any other Loan Document (other than the Fee Letter) to the
extent that the Administrative Agent is entitled to reimbursement for such
expenses pursuant to Section 11.04 but is not reimbursed for such expenses by
the Borrower.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENTS, ETC. No amendment or waiver of any provision of
any Loan Document, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Required Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (i) waive, modify or
eliminate any of the conditions specified in Article VI, (ii) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(iii) reduce the principal of, or interest on, any Loan, any Applicable Margin
or any fees or other amounts payable hereunder (other than fees payable to the
Administrative Agent pursuant to Section 2.02(c)), (iv) extend the Revolving
Credit Termination Date or the Letter of Credit Expiration Date or postpone any
date fixed for any payment of principal of, or interest on, any Loan or any fees
or other amounts payable hereunder (other than fees payable to the
Administrative Agent pursuant to Section 2.02(c)), (v) change the definition of
"Required Lenders" contained in Section 1.01 or change any other provision that
specifies the percentage of the Commitments or of the aggregate unpaid principal
amount of the Loans or the number of Lenders which shall be required for the
Lenders or any of them to take any action hereunder, (vi) amend any Loan
Document in a manner intended to prefer one or more Lenders over any other
Lenders, (vii) take any action that would result in the G&R Series K Mortgage
Bond no longer being secured equally and ratably with all other securities
issued and outstanding under the General and Refunding Mortgage Indenture or no
longer being 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), (viii) release the G&R Series K Mortgage Bond,
except pursuant to the terms thereof, or change any provision of the G&R Series
K Mortgage Bond providing for the release of the G&R Series K Mortgage Bond, or
(ix) amend, waive or modify this Section 11.01; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document; and provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by each Issuing Bank in
addition to the Lenders required above to take such action, affect the rights or
duties of any Issuing Bank under this Agreement or any other Loan Document. Any
request from the Borrower for any amendment, waiver or consent under this
Section 11.01 shall be addressed to the Administrative Agent. The Administrative
Agent, as holder of the G&R Series K 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.
SECTION 11.02. NOTICES, ETC. All notices and other communications provided
for hereunder and under the other Loan Documents shall be in writing (including
telegraphic, facsimile, telex or cable communication) and mailed, telegraphed,
telecopied, telexed, cabled or delivered, (i) if to the Borrower, at its address
at ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); (ii) if to any Bank, at its
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Domestic Lending Office specified opposite its name on Schedule 1.01B; (iii) if
to any Issuing Bank, at its address specified in the Issuing Bank Agreement to
which it is a party; (iv) if to any Lender other than a Bank, at its Domestic
Lending Office specified in the Lender Assignment pursuant to which it became a
Lender; and (v) if to the Administrative Agent, at its address at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); or, as to each party, at such other address as
shall be designated by such party in a written notice to the other parties. All
such notices and communications shall, when mailed, telegraphed, telecopied,
telexed or cabled, be effective five days after being deposited in the mails, or
when delivered to the telegraph company, telecopied, confirmed by telex
answerback or delivered to the cable company, respectively, except that notices
and communications to the Administrative Agent pursuant to Article II, III, or X
shall not be effective until received by the Administrative Agent.
SECTION 11.03. NO WAIVER OF REMEDIES. No failure on the part of the
Borrower, any Lender, any Issuing Bank or the Administrative Agent to exercise,
and no delay in exercising, any right hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 11.04. COSTS, EXPENSES AND INDEMNIFICATION. (a) The Borrower
agrees to pay on demand all reasonable costs and expenses of the Administrative
Agent in connection with the preparation, negotiation, syndication, execution
and delivery of the Loan Documents and any proposed modification, amendment,
waiver or consent relating to any Loan Document, including the reasonable fees
and disbursements of counsel to the Administrative Agent with respect thereto
and with respect to the administration of, and advising the Administrative Agent
as to its rights and responsibilities under, this Agreement and the other Loan
Documents. The Borrower further agrees to pay on demand all costs and expenses
of the Administrative Agent and each Lender (including the fees and
disbursements of counsel to the Administrative Agent and counsel for each
Lender) in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, the other Loan Documents and the
other documents to be delivered hereunder.
(b) The Borrower shall indemnify the Administrative Agent, each Issuing
Bank, each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "INDEMNIFIED PERSON") against, and hold each
Indemnified Person harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnified Person (whether or not such
Indemnified Person is named as a party to any proceeding or is otherwise
subjected to judicial or legal process arising from any such proceeding),
incurred by or asserted against any Indemnified Person arising out of, in
connection with, or as a result of (i) the execution or delivery of any Loan
Document or any other agreement or instrument contemplated hereby or thereby,
the performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan, Letter of Credit or other Extension of Credit
or the use or proposed use of the proceeds therefrom (including any refusal by
the Issuing Bank to honor a demand for payment under a Letter of
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Credit if the documents presented in connection with such demand do not comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of any Hazardous Substance on or from any property owned or operated
by the Borrower or any of its Affiliates, or any Environmental Liability related
in any way to the Borrower or any of its Affiliates, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory; provided
that such indemnity shall not, as to any Indemnified Person, be available to the
extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnified Person.
(c) The Borrower's obligations under this Section 11.04 shall survive the
repayment of all amounts owing to the Lenders, the Issuing Banks and the
Administrative Agent under the Loan Documents and the termination of the
Commitments. If and to the extent that the obligations of the Borrower under
this Section 11.04 are unenforceable for any reason, the Borrower agrees to make
the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law, which contribution shall in any event not
exceed the amount that the Borrower would otherwise have been obligated to pay
under this Section 11.04.
SECTION 11.05. RIGHT OF SET-OFF. (a) Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 9.02 to authorize the
Administrative Agent to declare the principal amount outstanding hereunder to be
due and payable pursuant to the provisions of Section 9.02, each Lender and
Issuing Bank is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or Issuing Bank to or for
the credit or the account of the Borrower, against any and all of the
obligations of the Borrower to such Lender or Issuing Bank (as the case may be)
existing under any Loan Document and any Promissory Notes held by such Lender or
the Issuing Bank Agreement to which such Issuing Bank is a party, as the case
may be, irrespective of whether or not such Lender or Issuing Bank shall have
made any demand under such Loan Document, such Promissory Notes or such Issuing
Bank Agreement, as the case may be, and although such obligations may be
unmatured. Each Lender and Issuing Bank agrees to notify promptly the Borrower
after any such set-off and application made by such Lender or Issuing Bank,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender and Issuing Bank under
this Section 11.05 are in addition to other rights and remedies (including other
rights of set-off) which such Lender and Issuing Bank may have. Notwithstanding
the foregoing, no Lender may exercise any right of set-off pursuant to this
Section or under applicable law and apply such set-off to any portion of the
Obligations without the prior written consent of the Required Lenders.
(b) The Borrower agrees that it shall have no right of off-set, deduction
or counterclaim in respect of its obligations hereunder, and that the
obligations of the Lenders hereunder are several and not joint. Nothing
contained herein shall constitute a relinquishment or waiver of the Borrower's
rights to any independent claim that the Borrower may have against the
Administrative Agent or any Lender for the Administrative Agent's or such
Lender's, as the
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case may be, gross negligence or wilful misconduct, but no Lender shall be
liable for any such conduct on the part of the Administrative Agent or any other
Lender, and the Administrative Agent shall be liable for any such conduct on the
part of any Lender.
SECTION 11.06. BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have been notified by each Bank that such
Bank has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.
SECTION 11.07. ASSIGNMENTS AND PARTICIPATION. (a) Each Lender may, with
the consent of the Borrower, the Administrative Agent and the Issuing Banks
(such consent not to be unreasonably withheld or delayed and, in the case of the
Borrower, shall not be required if an Event of Default has occurred and is
continuing), assign to one or more banks or other financial institutions all or
a portion of its rights and obligations under this Agreement and the other Loan
Documents (including all or a portion of its Commitment, the Loans owing to it
and any Promissory Notes held by it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this Agreement, (ii) the amount
of the Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Lender Assignment with respect to
such assignment) shall in no event be less than the lesser of the aggregate
amount of such Lender's Commitment and $5,000,000, (iii) each such assignment
shall be to an Eligible Assignee, and (iv) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, a Lender Assignment, together with any Promissory
Notes subject to such assignment and a processing and recordation fee (payable
by the assigning Lender or such assignee) of $4,000; and provided further,
however, that the consent of the Borrower, the Administrative Agent and the
Issuing Banks shall not be required for any assignments by a Lender to any of
its Affiliates or to any other Lender or any of its Affiliates. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Lender Assignment, which effective date shall be at least five
Business Days after the execution thereof (or such earlier date acceptable to
the Administrative Agent), (A) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Lender Assignment, have the rights and obligations of a
Lender hereunder and (B) the Lender assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it to an Eligible
Assignee pursuant to such Lender Assignment, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of a Lender
Assignment covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto); provided, however, that the limitation set forth in clause (iii) above
shall not apply if an Event of Default shall have occurred and be continuing and
the Administrative Agent shall have declared all Loans to be, or all Loans shall
have automatically become, immediately due and payable hereunder.
Notwithstanding anything to the contrary contained in this Agreement, any Lender
may at any time assign all or any portion of the Loans owing to it to any
Affiliate of such Lender. No such assignment, other than to an Eligible
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Assignee in accordance with this Section 11.07, shall release the assigning
Lender from its obligations hereunder.
(b) By executing and delivering a Lender Assignment, the Lender assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such Lender
Assignment, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument or document furnished pursuant
thereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of each Loan Document, together with copies of the financial statements
referred to in Section 7.01(a) of this Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Lender Assignment; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Lender 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 Documents; (v) such assignee confirms
that it is an Eligible Assignee (unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have declared all Loans to
be immediately due and payable hereunder, in which case no such confirmation is
necessary); (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to in
Section 11.02 a copy of each Lender Assignment delivered to and accepted by it
and a 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 "REGISTER"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower,
any Issuing Bank or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a Lender Assignment executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with any Promissory Notes subject to such assignment, the processing and
recordation fee referred to in subsection (a) above and any written consent to
such assignment required by subsection (a) above, the Administrative Agent
shall, if such Lender Assignment has been completed and is in substantially the
form of Exhibit F, (i) accept such Lender Assignment, (ii) record the
information contained therein in the
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Register and (iii) give prompt notice thereof to the Borrower. New and/or
replacement Promissory Notes payable to the assignee and the assigning Lender
(if the assigning Lender assigned less than all of its rights and obligations
hereunder) shall be issued upon request pursuant to Section 3.01(d), and shall
be dated the effective date of such Lender Assignment.
(e) Each Lender may sell participations to one or more banks or other
financial institutions (a "PARTICIPANT") in or to all or a portion of its rights
and obligations under the Loan Documents (including all or a portion of its
Commitment, the Loans owing to it and any Promissory Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of any such Promissory Notes for all purposes of this Agreement, and (iv) the
Borrower, the Administrative Agent, the Issuing Banks and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided, that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 11.01 that affects such Participant.
Subject to subsection (f) below, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 5.04 and 5.06 (and subject to the
related obligations under such Sections) to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (a)
above. To the extent permitted by law, each Participant shall also be entitled
to the benefits of Section 11.05(a) as though it were a Lender, provided such
Participant agrees to be subject to Section 5.05 as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 5.04 or 5.06 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 5.06 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 5.06 as though it were a Lender.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.07, disclose to
the assignee or Participant or proposed assignee or Participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that (i) prior to any such disclosure, the assignee or
Participant or proposed assignee or Participant shall agree, in accordance with
the terms of Section 11.08, to preserve the confidentiality of any Confidential
Information received by it from such Lender and (ii) such Lender agrees to
notify promptly the Borrower of the names of the recipients of such Confidential
Information, provided, however, that the failure to notify the Borrower shall
impose no additional or independent liability upon such Lender.
(h) If any Lender (or any Participant to which such Lender has sold a
participation) shall make any demand for payment under Section 5.04(a) or (c),
then within 30 days after any
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such demand (if, but only if, such demanded payment has been made by the
Borrower), the Borrower may, with the approval of the Administrative Agent
(which approval shall not be unreasonably withheld) and provided that no Default
or Event of Default shall then have occurred and be continuing, demand that such
Lender assign, at the sole cost and expense of the Borrower, in accordance with
this Section 11.07 to one or more Eligible Assignees designated by the Borrower,
all (but not less than all) of such Lender's Commitment and the Loans owing to
it within the period ending on the later to occur of (x) the last day of the
30-day period described above and (y) the last day of the longest of the then
current Interest Periods for such Loans. If any such Eligible Assignee
designated by the Borrower shall fail to consummate such assignment on terms
acceptable to such Lender, or if the Borrower shall fail to designate any such
Eligible Assignees for all or part of such Lender's Commitment or Loans, then
such demand by the Borrower shall become ineffective; it being understood for
purposes of this subsection (h) that such assignment shall be conclusively
deemed to be on terms acceptable to such Lender, and such Lender shall be
compelled to consummate such assignment to an Eligible Assignee designated by
the Borrower, if such Eligible Assignee (1) shall agree to such assignment by
entering into a Lender Assignment with such Lender and (2) shall offer
compensation to such Lender in an amount equal to all amounts then owing by the
Borrower to such Lender hereunder and under any Promissory Notes made by the
Borrower to such Lender, whether for principal, interest, fees, costs or
expenses (other than the demanded payment referred to above, and payable by the
Borrower as a condition to the Borrower's right to demand such assignment) or
otherwise (including, without limitation, to the extent not paid by the
Borrower, any payments required pursuant to Section 5.04(b)). Notwithstanding
anything set forth above in this subsection (h) to the contrary, the Borrower
shall not be entitled to compel the assignment by any Lender demanding payment
under Section 5.04(a) of its Commitment and Loans if, prior to or promptly
following any such demand by the Borrower, such Lender shall have changed or
shall change, as the case may be, its Applicable Lending Office for its
Eurodollar Rate Loans so as to eliminate the further incurrence of such
increased cost. In furtherance of the foregoing, any such Lender demanding
payment or giving notice as provided above agrees to use reasonable efforts to
so change its Applicable Lending Office if, to do so, would not result in the
incurrence by such Lender of additional costs or expenses which it deems
material or, in the sole judgment of such Lender, be inadvisable for regulatory,
competitive or internal management reasons.
(i) Anything in this Section 11.07 to the contrary notwithstanding, any
Lender may assign and pledge all or any portion of its Commitment and the Loans
owing to it to any Federal Reserve Bank (and its transferees) as collateral
security pursuant to Regulation A of the Board and any Operating Circular issued
by such Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
(j) 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 fund all or any part of any
Loan that such Granting Lender would otherwise be obligated to fund pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPC to make any Loan, and (ii) nothing herein shall excuse any Granting
Lender from its obligations hereunder. The funding of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan
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were funded 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 for which a Lender would otherwise be liable for so long as, and to
the extent, the Granting Lender provides such indemnity or makes such payment.
In furtherance of the foregoing, each Lender 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 senior 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 contained in this subsection (j), any SPC may, with
prior 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 to any
financial institutions (consented to by the Borrower and the Administrative
Agent) providing liquidity and/or credit support to or for the account of such
SPC to support the funding or maintenance of Loans. This subsection (j) may not
be amended without the prior written consent of each Granting Lender, all or any
part of whose Loans are being funded by an SPC at the time of such amendment.
Notwithstanding the foregoing provisions of this subsection, (1) an SPC shall
not be deemed to be a Lender or a Participant and shall have no rights under
this Agreement except as provided in this subsection (j), and in particular, but
not by way of limitation, shall have no rights to compensation for increased
costs pursuant to Article III or Section 5.04 or 5.06, (2) the Granting Lender's
obligations under this Agreement (including its Commitment to the Borrower
hereunder) shall remain unchanged, (3) the Granting Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(4) the Granting Lender shall remain the holder of any Promissory Notes for all
purposes of this Agreement, (5) the Borrower, the Administrative Agent, the
Issuing Banks and the other Lenders shall continue to deal solely and directly
with the Granting Lender in connection with such Granting Lender's rights and
obligations under this Agreement, and (6) the Granting Lender shall indemnify
and hold the Borrower harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be incurred
or shall arise as a result of any grant to an SPC contemplated hereunder.
SECTION 11.08. CONFIDENTIALITY. In connection with the negotiation and
administration of this Agreement and the other Loan Documents, the Borrower has
furnished and will from time to time furnish to the Administrative Agent, the
Issuing Banks and the Lenders (each, a "RECIPIENT") written information which is
identified to the Recipient when delivered as confidential (such information,
other than any such information which (a) was publicly available, or otherwise
known to the Recipient, at the time of disclosure, (b) subsequently becomes
publicly available other than through any act or omission by the Recipient or
(c) otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Borrower, being hereinafter referred to as "CONFIDENTIAL
INFORMATION"). The Recipient will not knowingly disclose any such Confidential
Information to any third party (other than to those persons who have a
confidential relationship with the Recipient), and will take all reasonable
steps to restrict access to such information in a manner designed to maintain
the confidential nature of such information, in
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each case until such time as the same ceases to be Confidential Information or
as the Borrower may otherwise instruct. It is understood, however, that the
foregoing will not restrict the Recipient's ability to freely exchange such
Confidential Information with its Affiliates or with prospective participants in
or assignees of the Recipient's position herein, but the Recipient's ability to
so exchange Confidential Information shall be conditioned upon any such
Affiliate's or prospective participant's or assignee's (as the case may be)
entering into an agreement as to confidentiality similar to this Section 11.08.
It is further understood that the foregoing will not prohibit the disclosure of
any or all Confidential Information if and to the extent that such disclosure
may be required (i) by a regulatory agency or otherwise in connection with an
examination of the Recipient's records by appropriate authorities, (ii) pursuant
to court order, subpoena or other legal process, (iii) otherwise as required by
law, or (iv) in order to protect such Recipient's interests or its rights or
remedies hereunder or under the other Loan Documents; in the event of any
required disclosure under clause (ii), (iii) or (iv), above, the Recipient
agrees to use reasonable efforts to inform the Borrower as promptly as
practicable to the extent not prohibited by law.
SECTION 11.09. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT, THE ISSUING BANKS AND THE LENDERS EACH HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OTHER
INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
SECTION 11.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement
and the Promissory Notes shall be governed by, and construed in accordance with,
the laws of the State of New York. The Borrower, the Lenders, the Issuing Banks
and the Administrative Agent each (i) irrevocably submits to the jurisdiction of
any New York State court or Federal court sitting in New York City in any action
arising out of any Loan Document, (ii) agrees that all claims in such action may
be decided in such court, (iii) waives, to the fullest extent it may effectively
do so, the defense of an inconvenient forum and (iv) consents to the service of
process by mail. A final judgment in any such action shall be conclusive and may
be enforced in other jurisdictions. Nothing herein shall affect the right of any
party to serve legal process in any manner permitted by law or affect its right
to bring any action in any other court.
SECTION 11.11. RELATION OF THE PARTIES; NO BENEFICIARY. No term, provision
or requirement, whether express or implied, of any Loan Document, or actions
taken or to be taken by any party thereunder, shall be construed to create a
partnership, association, or joint venture between such parties or any of them.
No term or provision of the Loan Documents shall be construed to confer a
benefit upon, or grant a right or privilege to, any Person other than the
parties hereto. The Borrower hereby acknowledges that none of the Administrative
Agent, the Issuing Banks nor the Lenders has any fiduciary relationship with or
fiduciary 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
Administrative Agent, the Issuing Banks and the Lenders, on the one hand, and
the Borrower, on the other hand, in connection herewith or therewith is solely
that of creditor and debtor.
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SECTION 11.12. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
SECTION 11.13. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made herein and in the certificates pursuant
hereto shall be considered to have been relied upon by the Administrative Agent,
the Issuing Banks and the Lenders and shall survive the making by the Lenders of
the Extensions of Credit and the execution and delivery to the Lenders of any
Promissory Notes evidencing the Extensions of Credit and shall continue in full
force and effect so long as any Promissory Note or any amount due hereunder or
under any other Loan Document is outstanding and unpaid, any Letter of Credit is
outstanding, or any Commitment of any Lender has not been terminated.
SECTION 11.14. PATRIOT ACT NOTICE. Each Lender and the Administrative
Agent (for itself and not on behalf of any other party) hereby notifies the
Borrower that, pursuant to the requirements of the USA Patriot Act, Title III of
Pub. L. 107-56, signed into law October 26, 2001 (the "PATRIOT ACT"), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Patriot Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
NEVADA POWER COMPANY
By_____________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent
By_____________________________
Name:
Title:
Signature Page to Nevada Power Company Amended and Restated Credit Agreement
S-2
EXISTING BANK
UNION BANK OF CALIFORNIA, N.A.
By_____________________________
Name:
Title:
Signature Page to Nevada Power Company Amended and Restated Credit Agreement
S-3
NEW BANK
[NAME OF BANK]
By_____________________________
Name:
Title:
Signature Page to Nevada Power Company Amended and Restated Credit Agreement