EXHIBIT 10.2
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$250,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 4, 2005,
Among
SIERRA PACIFIC POWER COMPANY,
as Borrower
and
THE LENDERS PARTY HERETO,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Issuing Bank
WACHOVIA CAPITAL MARKETS, LLC,
as Global Coordinator
WACHOVIA CAPITAL MARKETS, LLC,
DEUTSCHE BANK SECURITIES INC.
as Joint Book Managers
WACHOVIA CAPITAL MARKETS, LLC,
DEUTSCHE BANK SECURITIES INC.
as Joint Lead Arrangers
DEUTSCHE BANK SECURITIES INC.,
UNION BANK OF CALIFORNIA, N.A.,
CITIBANK NORTH AMERICA, INC.,
each as a Syndication Agent
and
LASALLE BANK, N.A.
as Documentation Agent
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TABLE OF CONTENTS
PAGE
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Article I DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Certain Defined Terms........................................ 1
Section 1.2 Computation of Time Periods; Construction.................... 24
Section 1.3 Accounting Terms............................................. 25
Article II COMMITMENTS
Section 2.1 The Commitments.............................................. 25
Section 2.2 Fees......................................................... 25
Section 2.3 Reduction of the Commitments................................. 26
Section 2.4 Computations of Outstandings................................. 27
Section 2.5 Optional Increase of the Commitments......................... 27
Article III LOANS
Section 3.1 Loans........................................................ 29
Section 3.2 Conversion of Loans.......................................... 31
Section 3.3 Interest Periods............................................. 31
Section 3.4 Other Terms Relating to the Making and Conversion of Loans... 31
Section 3.5 Repayment of Loans; Interest................................. 34
Section 3.6 Additional Interest on LIBOR Rate Loans...................... 34
Section 3.7 Default Rate................................................. 35
Section 3.8 New Lenders.................................................. 35
Article IV LETTERS OF CREDIT
Section 4.1 Issuing Banks................................................ 35
Section 4.2 Letters of Credit............................................ 35
Section 4.3 Issuing Bank Fees............................................ 37
Section 4.4 Reimbursement to Issuing Banks............................... 37
Section 4.5 Obligations Absolute......................................... 38
Section 4.6 Liability of Issuing Banks and the Lenders................... 39
Article V PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
Section 5.1 Payments and Computations.................................... 39
Section 5.2 Interest Rate Determination.................................. 41
Section 5.3 Prepayments.................................................. 41
Section 5.4 Yield Protection............................................. 42
Section 5.5 Sharing of Payments, Etc..................................... 43
Section 5.6 Taxes........................................................ 44
Article VI CONDITIONS PRECEDENT
Section 6.1 Conditions Precedent to Effectiveness of this Agreement...... 46
Section 6.2 Conditions Precedent to Each Extension of Credit............. 48
Section 6.3 Determinations Under Section 6.1............................. 49
Section 6.4 Reliance on Certificates..................................... 49
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Article VII REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and Warranties of the Borrower............... 49
Article VIII COVENANTS OF THE BORROWER
Section 8.1 Affirmative Covenants........................................ 55
Section 8.2 Negative Covenants........................................... 58
Section 8.3 Financial Covenants.......................................... 71
Article IX DEFAULTS
Section 9.1 Events of Default............................................ 71
Section 9.2 Remedies..................................................... 74
Section 9.3 Rights and Remedies Cumulative; Non-Waiver; etc.............. 75
Section 9.4 Crediting of Payments and Proceeds........................... 75
Section 9.5 Administrative Agent May File Proofs of Claim................ 76
Article X THE ADMINISTRATIVE AGENT
Section 10.1 Appointment and Authority.................................... 76
Section 10.2 Rights as a Lender........................................... 77
Section 10.3 Exculpatory Provisions....................................... 77
Section 10.4 Reliance by the Administrative Agent......................... 78
Section 10.5 Delegation of Duties......................................... 78
Section 10.6 Resignation of Administrative Agent.......................... 78
Section 10.7 Non-Reliance on Administrative Agent and Other Lenders....... 79
Section 10.8 No Other Duties, etc......................................... 80
Section 10.9 Collateral and Guaranty Matters.............................. 80
Article XI MISCELLANEOUS
Section 11.1 Amendments, Etc.............................................. 80
Section 11.2 Notices, Etc................................................. 81
Section 11.3 No Waiver of Remedies........................................ 82
Section 11.4 Costs, Expenses and Indemnification.......................... 82
Section 11.5 Right of Set-off............................................. 83
Section 11.6 Binding Effect............................................... 84
Section 11.7 Successors and Assigns; Participations....................... 84
Section 11.8 Confidentiality.............................................. 87
Section 11.9 Waiver of Jury Trial......................................... 88
Section 11.10 Governing Law; Submission to Jurisdiction.................... 88
Section 11.11 Relation of the Parties; No Beneficiary...................... 88
Section 11.12 Execution in Counterparts.................................... 89
Section 11.13 Survival of Agreement........................................ 89
Section 11.14 Survival of Indemnities...................................... 89
Section 11.15 Patriot Act Notice........................................... 89
Section 11.16 Amendment and Restatement; No Novation....................... 89
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EXHIBITS
EXHIBIT A-1 - Form of Note
EXHIBIT A-2 - Form of Notice of Borrowing
EXHIBIT B - Form of Notice of Conversion
EXHIBIT C - Form of Assignment and Assumption
EXHIBIT D - Form of Officer's Certificate
EXHIBIT E - Form of Secretary's Certificate
SCHEDULES
SCHEDULE 1.1(A) Applicable Lending Offices
SCHEDULE 1.1(B) Existing Letters of Credit
SCHEDULE 7.1(b) Disclosed Matters
SCHEDULE 7.1(d) Consents, Authorizations, Filings and Notices
SCHEDULE 7.1(f) Material Litigation
SCHEDULE 7.1(g) Contractual Obligations
SCHEDULE 7.1(p) Subsidiaries
SCHEDULE 8.2(a)(ii) Existing Indebtedness
SCHEDULE 8.2(b)(vii) Liens
SCHEDULE 8.2(d) Scheduled Asset Sales
SCHEDULE 9.1(e)(ii) Certain Hedge Agreements
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THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 4, 2005 is
made by and among:
(i) Sierra Pacific Power Company, a Nevada corporation (the
"Borrower"),
(ii) the banks and other financial institutions listed on the
signature pages of this Agreement and the other Lenders (as
hereinafter defined) from time to time party hereto, and
(iii) Wachovia Bank, National Association, as administrative agent (in
such capacity, together with its successors and assigns in such
capacity, the "Administrative Agent") for the Lenders hereunder,
and as an Issuing Bank (as hereinafter defined).
PRELIMINARY STATEMENTS
The Borrower, certain lenders and Union Bank of California, N.A. ("UBOC"),
as administrative agent, previously entered into that certain Credit Agreement,
dated as of October 22, 2004 (as amended, supplemented or otherwise modified,
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 1.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"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.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
11.2.
"Administrative Questionnaire" means an administrative questionnaire in a
form supplied by the Administrative Agent.
"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,
restated, supplemented or otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Lender, (i) such
Lender's Domestic Lending Office, in the case of a Base Rate Loan, and (ii) such
Lender's Eurodollar Lending Office, in the case of a LIBOR Rate Loan.
"Applicable Margin" means the corresponding percentages per annum as set
forth below based on the applicable Debt Ratings:
APPLICABLE LIBOR APPLICABLE BASE COMMITMENT
LEVEL DEBT RATING RATE MARGIN RATE MARGIN FEE
----- ------------------------------------------------ ---------------- --------------- ----------
I BBB or higher from S&P/BBB or higher from 0.625% 0.000% 0.125%
Fitch/Baa2 or higher from Xxxxx'x
II BBB- from S&P/ BBB- from Fitch/Baa3 from Xxxxx'x 0.750% 0.000% 0.150%
III BB+ from S&P/BB+ from Fitch/Ba1 from Xxxxx'x 0.875% 0.000% 0.200%
IV BB from S&P/ BB from Fitch/Ba2 from Xxxxx'x 1.125% 0.125% 0.250%
V BB- from S&P/BB- from Fitch/Ba3 from Xxxxx'x 1.500% 0.500% 0.375%
VI B+ or lower from S&P/ B+ or lower from Fitch/B1 2.000% 1.000% 0.500%
or lower from Xxxxx'x
In all cases in determining the Applicable Margin, (a) if the Debt Ratings shall
fall within different levels and Debt Ratings are then maintained by all three
Rating Agencies, (i) if two applicable Debt Ratings are equal and higher than
the third applicable Debt Rating, the higher applicable Debt Rating will apply,
(ii) if two applicable Debt Ratings are equal and lower than the third
applicable Debt Rating, the lower applicable Debt Rating will apply, (iii) if no
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applicable Debt Ratings are equal, the intermediate applicable Debt Rating will
apply; (b) if the Debt Ratings established by the Rating Agencies shall fall
within different levels and Debt Ratings are then maintained by two Rating
Agencies, the applicable Debt Rating shall be based on the higher of the two
applicable Debt Ratings unless one of the two applicable Debt Ratings is two or
more levels lower than the other, in which case the applicable Debt Rating shall
be determined by reference to the level one Debt Rating lower than the higher of
the two applicable Debt Ratings. The Applicable Margins shall be increased or
decreased in accordance with this definition upon any change in the applicable
Debt Rating, and such increased or decreased Applicable Margins shall be
effective from the date of announcement of any such new Debt Rating. The
Borrower agrees to notify the Administrative Agent promptly after each change in
any Debt Rating. If the rating system of any Rating Agency 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 Debt Ratings from such Rating Agency and, pending the
effectiveness of any such amendment, the Applicable Margin shall be determined
by reference to the Debt Rating most recently in effect prior to such change or
cessation.
"Applicable Rate" means:
(i) in the case of each Base Rate Loan, a rate per annum equal at all times
to the sum of the 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 LIBOR 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 LIBOR Rate for such Interest Period plus the Applicable Margin in
effect from time to time during such Interest Period.
"Approved Fund" means any Person (other than a natural Person), including,
without limitation, any special purpose entity, that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business; provided,
that such Approved Fund must be administered, managed or underwritten by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"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;
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(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 8.2(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 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 8.2(e); and
(vi) transfers of assets by the Borrower and its Subsidiaries required
under statute or regulation in connection with renewable energy contracts.
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 11.7), and accepted by the Administrative Agent,
in substantially the form of EXHIBIT C or any other form approved by the
Administrative Agent.
"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.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon the
Base Rate provided in Section 3.5(b)(i).
"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
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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 Charlotte, North Carolina 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, LIBOR 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.
"CPUC" means the California Public Utilities Commission or any successor
agency.
"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 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 Xxxxx'x 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.
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"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
(other than shares of the Borrower's Class A, Series 1 preferred stock); 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.
"Closing Date" means the date upon which each of the conditions precedent
enumerated in Section 6.1 has been fulfilled to the satisfaction of the
Administrative Agent. The Closing Date shall take place on or before November 4,
2005, at the offices of Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P., 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 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, and the rules and
regulations thereunder, each as amended or modified 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, 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 the Register or (ii) if such Lender has
entered into one or more Assignments and Assumptions, the amount set forth for
such Lender in the Register, in each such case as such amount may be reduced or
increased from time to time pursuant to the terms hereof to give effect to such
assignments. "Commitments" means the total of the Lenders' Commitments
hereunder. As of the Closing Date, the Commitments shall not exceed
$250,000,000.
"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
11.8.
"Consolidated" means, when used with reference to financial statements or
financial statement items of any Person, such statements or items on a
consolidated basis in accordance with applicable principles of consolidation
under GAAP.
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"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 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 Subsidiaries, and (v) Consolidated equity of the preferred
stockholders of the Borrower and its 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) 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
(b) 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
(c) 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
(d) all extraordinary, unusual or non-recurring items of loss or expense
(including, without limitation, in connection with an Asset Sale), to the extent
that any such loss or expense was deducted in computing such Consolidated Net
Income; minus
(e) all extraordinary, unusual or non-recurring items of gain or revenue
(including, without limitation, in connection with an Asset Sale), to the extent
that any such gain or revenue was included in computing such Consolidated Net
Income; minus
(f) 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.
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"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 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
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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.
"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 3.2.
"Debt Rating" means, (a) at any time prior to a Debt Ratings Trigger, the
Secured Debt Rating and (b) at any time on or after a Debt Ratings Trigger, the
Unsecured Debt Rating.
"Debt Ratings Trigger" shall mean the date which the Borrower shall have
obtained an Unsecured Debt Rating from at least two (2) of the Rating Agencies
of (i) BBB- or higher from S&P, and/or (ii) BBB- or higher from Fitch and/or
(iii) Baa3 or higher from Moody's, in each case with a stable or better outlook.
"Default" means any of the events specified in Section 9.1, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans, or participations in any LC Outstandings required to be
funded by it hereunder within one Business Day of the date required to be funded
by it hereunder, unless such failure has been cured, (b) has otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless such amount is the subject of a good faith dispute or such failure
has been cured, or (c) has been deemed insolvent or become the subject of a
bankruptcy or insolvency proceeding.
"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 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 8.2(e).
"Dollars" and the sign "$" each means lawful money of the United States.
9
"Domestic Lending Office" means, with respect to any Lender, the office of
such Lender or Affiliate of such Lender specified as its "Domestic Lending
Office" opposite its name on Schedule 1.1(A) hereto or in the Assignment and
Assumption pursuant to which it became a Lender, or such other office of such
Lender 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 Lender, (b) an Affiliate of a Lender, (c)
an Approved Fund, and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, and each Issuing Bank, and (ii) unless
a Default or Event of Default has occurred and is continuing, the Borrower (each
such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
"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 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
of such Lender or Affiliate of such Lender specified as its "Eurodollar Lending
Office" opposite its name on Schedule 1.1(A) hereto or in the Assignment and
Assumption pursuant to which it became a Lender (or, if no such office or
Affiliate is specified, its Domestic Lending Office), or such other
10
office of such Lender or Affiliate of such Lender as such Lender may from time
to time specify in writing to the Borrower and the Administrative Agent.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Board of
Governors of the Federal Reserve system (or any successor) for determining the
maximum reserve requirement (including, without limitation, any basic,
supplemental or emergency reserves) in respect of eurocurrency liabilities or
any similar category of liabilities for a member bank of the Federal Reserve
System in New York City.
"Event of Default" means any of the events specified in Section 9.1,
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 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 8.2(a)(ii), until such amounts are
repaid.
"Existing Letter of Credit" means (i) each of the letters of credit set
forth in Schedule 1.1(B) hereto and (ii) to the extent provided in Section
4.2(d), any other letter of credit issued by an Issuing Bank 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, as to any Lender at any time, (a) an amount
equal to the sum of (i) the aggregate principal amount of all Loans made by such
Lender then outstanding, (ii) such Lender's Percentage of the LC Outstandings,
or (b) the making of any Loan or participation in any Letter of Credit by such
Lender, as the context requires.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. Rates for weekends or holidays shall be the same as the rate
for the most immediately preceding Business Day.
"Fee Letter" has the meaning assigned to that term in Section 2.2(d).
"Final Maturity Date" means November 4, 2010.
11
"First Mortgage Indenture" means the Indenture of Mortgage dated as of
December 1, 1940, from the Borrower to U.S. Bank National Association (successor
to the New England Trust Company), as Trustee, and Xxxxxx X. Xxxxxxx (successor
to Xxx X. Xxxxxx), as co-Trustee, as modified, amended or supplemented at any
time or from time to time by supplemental indentures.
"Fitch" means Fitch Ratings, and any successor thereto.
"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 and reasonably acceptable to the
Administrative Agent (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
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:
12
(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.
"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.
"General and Refunding Mortgage Bonds" means, collectively, (a) the
Borrower's General and Refunding Mortgage Bonds, Series L, due the Final
Maturity Date, assigned or issued as of the Closing Date to the Administrative
Agent under the General and Refunding Mortgage Indenture and any supplemental
indenture or Officer's Certificate related thereto, in the aggregate principal
amount of $250,000,000, and (b) any additional General and Refunding Mortgage
Bonds issued by the Borrower to the Administrative Agent under the General and
Refunding Mortgage Indenture and any supplemental indentures or Officer's
Certificate related thereto in connection with any increase in the Commitments
pursuant to Section 2.5, in each case as collateral securing the Obligations.
13
"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.
"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, interest rate collar agreements and any other 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 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, all existing or
future payment and other obligations owing by such Person under any Hedge
Agreement (which such Hedge Agreement is permitted hereunder) with any Person
that is a Lender or an Affiliate of a Lender, in each case at the time such
Hedge Agreement is executed.
"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 arising in the ordinary course of business that is (i) less than
$1,000,000 or (ii) not more than one hundred twenty (120) days past due or (f)
representing any Net Hedging Obligations, if and to the extent any of the
14
preceding items (other than letters of credit and Net 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.
"Indemnitee" has the meaning assigned to that term in Section 11.4(b).
"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, know-how and processes, and all
rights to xxx 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 3.3.
"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 8.2(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 8.2(e).
"ISP98" means the International Standby Practices (1998 Revision, effective
January 1, 1999), International Chamber of Commerce Publication No. 590.
15
"Issuing Bank" means (a) any of Wachovia or Deutsche Bank Trust Company
Americas in their respective capacities as an issuer of any Letter of Credit
issued under this Agreement (other than the Existing Letters of Credit), or any
successors thereto, (b) UBOC, or any successor thereto, solely with respect to
each Existing Letter of Credit and (c) any other Lender approved as an Issuing
Bank pursuant to Section 4.1 of this Agreement.
"Issuing Bank Agreement" means an agreement between an Issuing Bank and the
Borrower, providing for the issuance (or, pursuant to Section 4.2(d), deemed
issuance) of one or more Letters of Credit 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
4.4(b).
"LC Outstandings" means, for any Letter of Credit on any date of
determination, (a) the maximum amount available to be drawn under such Letter of
Credit at any time on or after such date (assuming the satisfaction of all
conditions for drawing enumerated therein) and (b) the aggregate amount of
drawings under Letters of Credit which have not then been reimbursed.
"Lenders" means the banks and other financial institutions listed on the
signature pages hereof as lenders (including, without limitation, any Issuing
Bank), each Eligible Assignee that shall become a party hereto pursuant to
Section 11.7.
"Letter of Credit" means a standby letter of credit issued (or, pursuant to
Section 4.2(d) deemed issued) by an Issuing Bank pursuant to Section 4.2
(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 with respect to any Letter of
Credit (other than any Existing Letter of Credit) the earlier of (a) one (1)
year after the date of issuance of such Letter of Credit and (b) five (5)
Business Days prior to the Final Maturity Date.
"Letter of Credit Sublimit" means the lesser of (a) One Hundred
Eighty-Seven Million Five Hundred Thousand Dollars ($187,500,000) or (b) the
Commitments. 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.
"LIBOR" means the rate of interest per annum determined on the basis of the
rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Telerate
Page 3750 at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of the applicable Interest Period (rounded upward, if
necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does not
appear on Telerate Page 3750, then "LIBOR" shall be determined by the
Administrative Agent to be the arithmetic average of the rate per annum at which
deposits in Dollars in minimum amounts of at least $5,000,000 would be offered
by first class banks in the London interbank market to the Administrative Agent
at approximately 11:00 a.m. (London time) two (2)
16
Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period. Each calculation by the Administrative
Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest
error.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
----------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the
LIBOR Rate as provided in Section 3.5(b)(ii).
"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 3.1 (or
deemed made pursuant to Section 4.4) and refers to a Base Rate Loan or a LIBOR
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, each
Subsidiary Guarantee, if any, each Issuing Bank Agreement, the Officer's
Certificate and the General and Refunding Mortgage Bonds, and each other
document, instrument, certificate and agreement executed and delivered by the
Borrower or any Subsidiary thereof in connection with this Agreement (excluding
any Hedge Agreement), all as may be amended, restated, supplemented or otherwise
modified from time to time.
"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 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.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor thereto.
17
"Multiemployer Plan" means a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Hedging Obligations" means, as of any date, any net obligations
associated with the Termination Value of any such Hedge Agreement on such date.
"Net Income" means, with respect to any Person, the net income (or 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).
"Notice of Borrowing" has the meaning assigned to that term in Section
3.1(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 (including any Hedging Obligations), 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 Administrative Agent, any Issuing Bank or any Lender that are required to
be paid by the Borrower pursuant hereto) or otherwise.
"OFAC" means the U.S. Department of the Treasury's Office of Foreign Assets
Control.
"Officer's Certificate" means an "Officer's Certificate" (as defined in the
General and Refunding Mortgage Indenture) setting forth the terms of each series
of the General and Refunding Mortgage Bonds, 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 11.7(d).
"Payment Amounts" has the meaning assigned to that term in Section 9.1(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
18
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
8.2(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
8.2(d);
(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 or any Investment pursuant to a Hedge Agreement, in
each case, incurred in the normal course of business and not for speculative
purposes;
(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 $20,000,000.
"Permitted Liens" has the meaning assigned to that term in Section 8.2(b).
19
"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) 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 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
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.
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by Wachovia as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in such prime rate occurs. The parties hereto acknowledge that the rate
announced publicly by Wachovia as its prime rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.
"Promissory Note" means any promissory note of the Borrower payable to the
order of a Lender (and, if requested, its registered assigns), evidencing the
Loans made by such Lender, substantially in the form of EXHIBIT A-1, and any
amendments, supplements, and modifications thereto, any substitutes therefor,
and any replacements, restatements, renewals or extension thereof; in whole or
in part and "Promissory Notes" means any or all of the foregoing.
20
"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.
"Rating Agencies" means the collective reference to S&P, Fitch and Xxxxx'x.
"Recipient" has the meaning assigned to that term in Section 11.8.
"Register" has the meaning assigned to that term in Section 11.7(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
4.2(a).
"Required Lenders" means, on any date of determination, Lenders that,
collectively, on such date (i) hold more than 50% of the Commitments and (ii) if
the Commitments have been terminated pursuant to Section 9.2, those Lenders
having Percentages in the aggregate of more than 50% of the aggregate Extensions
of Credit, provided that the Commitment of any Defaulting Lender or, if no Loans
are then outstanding, the Percentage of Extensions of Credit of any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders. 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.
21
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payments" has the meaning assigned to such term in Section
8.2(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 2.3 or 9.2.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"Sale and Leaseback Transaction" has the meaning assigned to such term in
Section 8.2(h).
"Sanctioned Entity" shall mean (i) an agency of the government of, (ii) an
organization directly or indirectly controlled by, or (iii) a person resident in
a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxxx/xxxxx.xxxx, or as
otherwise published from time to time as such program may be applicable to such
agency, organization or person.
"Sanctioned Person" shall mean a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/ enforcement/ofac/sdn/index.html, or as otherwise
published from time to time.
"SEC" means the Securities and Exchange Commission (or successors thereto
or an analogous Governmental Authority).
"Secured Debt Rating" means, as of any date of determination, the
Borrower's senior secured long term debt rating as determined by each of the
Rating Agencies to be in effect as of such date.
"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 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
22
(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.
"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
8.2(o).
"Subsidiary Guarantor" means any Subsidiary of the Borrower that executes a
Subsidiary Guarantee, and its successors and assigns.
"Termination Value" means, in respect of any one or more Hedge Agreements
after taking into account the effect of any legally enforceable netting
agreement relating to such Hedge Agreement, (x) for any date on or after the
date such Hedge Agreement has been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (y) for any
date prior to the date referenced in clause (x), the amount(s) determined as the
xxxx-to-market value(s) for such Hedge Agreement, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Hedge Agreement (which may include a Lender or any
Affiliate of a Lender). Notwithstanding the foregoing, any calculation of the
aggregate Termination Value shall exclude (a) the Termination Value of each
forward energy contract entered into by the Borrower and its Subsidiaries with
(i) Enron Power Marketing, Inc., (ii) Xxxxxx Xxxxxxx Capital Group, Inc. and
(iii) El Paso Merchant Energy, in each case to the extent the Termination Value
of such Hedge Agreement is being contested by appropriate proceedings and with
respect to which adequate reserves determined in accordance with GAAP have been
provided on the books of the Borrower or its Subsidiaries, as the case may be
and (b) any Termination Value of Hedge Agreements that are accounted for by the
Borrower as regulatory assets or liabilities or risk management assets or
liabilities pursuant to Financial Accounting Standards Board Statement No. 71.
23
"Trust Preferred Vehicle" means any statutory business 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.
"UBOC" has the meaning assigned to that term in the Preliminary Statements
hereto.
"Unsecured Debt Rating" means, as of any date of determination, the
Borrower's senior unsecured long term debt rating as determined by each of the
Rating Agencies to be in effect as of such date.
"Wachovia" means Wachovia Bank, National Association, a national banking
association, and its successors.
"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.
Section 1.2 Computation of Time Periods; Construction.
(a) Unless otherwise indicated, each reference in this Agreement to a
specific time of day is a reference to Eastern 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 herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement.
24
Section 1.3 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 8.1(a).
ARTICLE II
COMMITMENTS
Section 2.1 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 4.2(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 of Loans
outstanding plus the amount of LC Outstandings hereunder to exceed the
Commitments.
Section 2.2 Fees.
(a) Commencing on the Closing Date, the Borrower shall pay to the
Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate per annum equal to the Applicable Margin on the average
daily unused portion of the Commitments. The commitment fee shall be payable in
arrears on the last Business Day of each calendar quarter during the term of
this Agreement commencing December 31, 2005 and ending on the Revolving Credit
Termination Date. Such commitment fee shall be distributed by the Administrative
Agent to the Lenders pro rata in accordance with the Lenders' respective
Percentages.
(b) The Borrower shall pay to the Administrative Agent, for the
account of each Lender a letter of credit commission with respect of each Letter
of Credit in an amount equal to the face amount of such Letter of Credit
multiplied by the Applicable Margin with respect to Loans that are LIBOR Rate
Loans (determined on a per annum basis). Such commission shall be payable
quarterly in arrears on the last Business Day of each calendar quarter, on the
Revolving Credit Termination Date and thereafter on demand of the Administrative
Agent. The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Lenders all commissions received pursuant to this Section in
accordance with their respective Percentages.
(c) In addition to the foregoing commission provided for in subsection
(b) above, the Borrower shall pay to the Administrative Agent, for the account
of the applicable Issuing Bank an issuance fee with respect to each Letter of
Credit issued by such Issuing Bank
25
(other than Existing Letters of Credit) in an amount equal to the face amount of
such Letter of Credit multiplied by 0.125 percent per annum. Such issuance fee
shall be payable quarterly in arrears on the last Business Day of each calendar
quarter commencing with the first such date to occur after the issuance of such
Letter of Credit, on the Revolving Credit Termination Date and thereafter on
demand of the Administrative Agent.
(d) In addition to the fees provided for in subsections (a), (b) and
(c) above and Section 4.3, the Borrower shall pay to the Administrative Agent,
for its own account, such other fees as are provided for in that certain letter
agreement, dated as of October 3, 2005, among the Borrower, Sierra Pacific Power
Company and the Administrative Agent and/or certain of its affiliates (the "Fee
Letter"), in the amounts and at the times specified therein.
Section 2.3 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 (3) Business Days' prior
written 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. All commitment fees
accrued until the effective date of any termination of the Commitments shall be
paid on the effective date of such termination.
(c) The Commitments shall be automatically and permanently reduced by
$200,000,000 on the one year anniversary of the Closing Date; provided, however,
that if the Administrative Agent shall have received prior to such time,
satisfactory evidence of new or supplemental regulatory authority by the PUCN,
the CPUC (if applicable) or any other applicable regulatory body, authorizing
the issuance by the Borrower of long-term debt securities, the Commitments shall
only be reduced in the event that the amount authorized by such new or
supplemental regulatory authority is less than (i) $200,000,000 if the Borrower
receives incremental PUCN or CPUC (if applicable) authority or (ii) $250,000,000
if the Borrower receives supplemental and superseding PUCN or CPUC (if
applicable) authority, and in either case, the Commitments shall be reduced by
the difference between (x) $200,000,000 and the amount authorized by such new or
supplemental regulatory authority if the Borrower receives incremental PUCN or
CPUC (if applicable) authority or (y) $250,000,000 and the amount authorized by
such supplemental and superseding PUCN or CPUC (if applicable) authority.
Satisfactory evidence of new or supplemental regulatory authority for this
provision shall consist of (i) a copy of an order duly and validly issued by the
PUCN or CPUC (if applicable) after the date hereof authorizing the Borrower to
incur additional long-term indebtedness in an aggregate amount not less than the
aggregate amount of the Commitments on the effective date of such order in
excess of $50,000,000, certified to be true, correct and complete by a
Responsible Officer, (ii) a legal opinion from counsel to the Borrower, in form
and substance satisfactory to the Administrative Agent, with respect to such
approval and the authority of the Borrower to perform its obligations under this
Agreement, and to incur such additional indebtedness in excess of $50,000,000
provided
26
for in this Agreement and the other Loan Documents, through the Final Maturity
Date, and a certificate of a Responsible Officer certifying that (A) the
representations and warranties of the Borrower set forth in each of the Loan
Documents to which it is a party (other than the representations and warranties
set forth in Section 7.1(b) of this Agreement) are true and correct in all
material respects on and as of such date with the same effect as if made on such
date (except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date) and (B) no
Default or Event of Default has occurred and is continuing.
(d) Each permanent reduction permitted or required pursuant to this
Section shall be accompanied by a payment of principal of the Loans sufficient
to reduce the aggregate outstanding Loans and LC Outstandings, as applicable,
after such reduction to the amount of the Commitments as so reduced, and if the
Commitments as so reduced is less than the aggregate amount of all LC
Outstandings, the Borrower shall be required to deposit cash collateral in a
cash collateral account opened by and under the control of the Administrative
Agent in an amount equal to the aggregate then undrawn and unexpired amount of
such Letters of Credit. Such cash collateral shall be applied in accordance with
Section 9.2(b). Any reduction of the Commitments to zero shall be accompanied by
payment of all outstanding Loans (and furnishing of cash collateral satisfactory
to the Administrative Agent for all LC Outstandings) and shall result in the
termination of the Commitments and the Revolving Credit Facility. Such cash
collateral shall be applied in accordance with Section 9.2(b) If the reduction
of the Commitments requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.4
hereof.
(e) No repayment or prepayment or reduction pursuant to this Section
shall affect any of the Borrower's obligations under any Hedge Agreement.
Section 2.4 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.
Section 2.5 Optional Increase of the Commitments. At any time following the
Closing Date, the Borrower shall have the right, in consultation with the
Administrative Agent, from time to time and upon not less than thirty (30) days
prior written notice to the Administrative Agent to request an increase in the
Commitments; provided that:
(a) no Default or Event of Default shall have occurred and be continuing or
would result from any such requested increase or Extension of Credit made on the
date of such increase;
27
(b) the Borrower shall provide the Administrative Agent with a certificate
of a Responsible Officer dated as of the date of such increase in form and
substance substantially similar to the certificate delivered under Section
8.1(b)(i) demonstrating pro forma compliance with each of the covenants
contained in Section 8.3 after giving effect to any Extensions of Credit made on
the date of such increase;
(c) each increase in Commitments shall be in an aggregate principal amount
of at least $10,000,000 or a whole multiple of $10,000,000 in excess thereof, or
in each case if less, the remaining principal amount of increases to Commitments
that are available under this Section 2.5 (after giving effect to all prior
increases pursuant to this Section 2.5);
(d) the aggregate amount of all Commitment increases made pursuant to this
Section 2.5 shall not exceed $100,000,000;
(e) increases in Commitments pursuant to this Section 2.5 shall not
increase or otherwise affect the Letter of Credit Sublimit;
(f) the Commitment of any Lender shall not be increased without the
approval of such Lender;
(g) in connection with each proposed increase, the Borrower may solicit
commitments from (i) any Lender (provided that no Lender shall have an
obligation to commit to all or a portion of the proposed increase) or (ii) any
third party financial institutions that are Eligible Assignees that are
reasonably acceptable to both the Administrative Agent and the Borrower;
(h) the Loans made or Letters of Credit issued in respect of any increase
in Commitments pursuant to this Section 2.5 (A) will rank pari passu in right of
payment and security with the other Loans made and Letters of Credit issued
hereunder and shall constitute and be part of the "Obligations" arising under
this Agreement, and (B) shall have the same pricing and tenor as the other Loans
and Letters of Credit hereunder;
(i) in the event that any existing Lender or any new lender commits to such
requested increase, (i) any new lender will execute an accession agreement to
this Agreement, (ii) the Commitment of any existing Lender which has committed
to provide any of the requested increase shall be increased, (iii) the
Percentages of the Lenders shall be adjusted, and (iv) other changes shall be
made to the Loan Documents as may be necessary to reflect the aggregate amount,
if any, by which the Lenders have agreed to increase their respective
Commitments or new lenders have agreed to or make new commitments in response to
the Borrower's request for an increase pursuant to this Section 2.5, and which
other changes do not adversely affect the rights of those Lenders not
participating in any such increase;
(j) with respect to each increase in Commitments and until such time as a
Debt Ratings Trigger shall have occurred, the Borrower will issue to the
Administrative Agent General and Refunding Mortgage Bonds in an aggregate
principal amount equal to the difference between the principal amount of the
Commitments (after giving effect to such increase and any prior increases or
permanent reductions to the Commitments) and the outstanding principal
28
amount of General and Refunding Mortgage Bonds previously issued to the
Administrative Agent as collateral support for the Obligations; and
(k) with respect to each such increase, the Borrower shall provide
satisfactory evidence of new or supplemental regulatory approval by the PUCN or
CPUC (if applicable) and any other applicable regulatory body, in each case
authorizing the issuance of long-term debt securities in an aggregate principal
amount equal to such new issuance of General and Refunding Mortgage Bonds and/or
the principal amount of such increase, as applicable.
ARTICLE III
LOANS
Section 3.1 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 2:00 P.M. on the third Business Day prior to the date of the proposed
Borrowing or, in the case of Base Rate Loans, on the same Business Day. 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-2 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 Final Maturity 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 3.3 and 3.4.
(b) Each Lender shall, before 4:00 P.M. 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 Office, 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 make such funds available to
the Borrower at the Administrative Agent's Office. Notwithstanding the
foregoing, unless the Administrative Agent shall have received notice from a
Lender prior to the time 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 shall not have made available
to the Administrative Agent, in accordance with subsection (b) above, such
Defaulting Lender's Percentage of any Borrowing, the Defaulting 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
Defaulting 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
29
such Borrowing and (ii) in the case of such Lender, the Federal Funds 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 other Lenders to fund such repayment to the Administrative
Agent. If a Defaulting 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 Defaulting Lender; if and so
long as such Defaulting Lender shall not repay such amount, and unless and until
an Eligible Assignee shall have assumed and performed the obligations of such
Defaulting 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 Defaulting Lender, and any amounts
paid to the Administrative Agent for the account of such Defaulting Lender shall
be held by the Administrative Agent in trust for such Defaulting 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 Defaulting 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) The Extensions of Credit made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Extensions of Credit made by the
Lenders to the Borrower and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error.
(e) Any Lender may request that its Commitment 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 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 11.7) 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).
Each Lender may attach schedules to its Promissory Notes and endorse thereon the
date, amount and maturity of its Loans and payments with respect thereto.
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Section 3.2 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 2:00 P.M. on (x) the
third Business Day prior to the date of any proposed Conversion into a LIBOR
Rate Loan and (y) the same Business Day as to the date of any proposed
Conversion into a Base Rate 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 3.3 and 3.4.Section
3.3 Interest Periods. The period between the date each LIBOR Rate Loan is made
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 3.1 or 3.2, select; provided, however, that:
(i) the Borrower may not select any Interest Period that ends
after the Final Maturity 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 3.4 Other Terms Relating to the Making and Conversion of Loans.
(a) Notwithstanding anything in Section 3.1 or 3.2 to the contrary:
(i) each Borrowing (other than a Borrowing deemed made under
Section 4.4) shall be in an aggregate amount not less than (A) in the
case of LIBOR Rate Loans, $5,000,000 or an integral multiple of
$1,000,000 in excess thereof, or (B) in the case of Base Rate Loans,
$1,000,000 or an integral multiple of $500,000 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
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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 ten (10) different Borrowings
comprising LIBOR Rate Loans be outstanding hereunder;
(iv) no LIBOR 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 5.4(b) are paid within two Business Days after the
Administrative Agent provides written notice to the Borrower as to
amounts owing under Section 5.4(b) in connection with such Conversion;
(v) if the Borrower shall either fail to give a timely Notice of
Conversion pursuant to Section 3.2 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 LIBOR
Rate Loans in accordance with Section 3.3, 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, Base Rate 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, Base Rate 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,
LIBOR Rate Loans hereunder, (i) the obligation of such Lender to make, or to
Convert Loans into, LIBOR 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 LIBOR
Rate Loans, and (ii) if the maintenance of LIBOR 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 prepay or Convert all LIBOR 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 LIBOR Rate Loans by
such fifth Business Day, then such LIBOR Rate Loans shall be deemed
automatically Converted to Base Rate 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
32
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
LIBOR Rate for LIBOR 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 LIBOR Rate Loans for such Borrowing, the right
of the Borrower to select LIBOR 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 a Base Rate Loan.
(d) If any Lender shall have delivered a notice to the Borrower or the
Administrative Agent described in Section 3.4(b) or Section 3.6, or shall become
a Defaulting Lender under Section 3.1(c) or Section 4.4, and if and so long as
such Lender shall not have withdrawn such notice or corrected such
non-performance in accordance with said Section 3.1(c), Section 3.4(b), Section
3.6, or Section 4.4, the Borrower or the Administrative Agent may demand that
such Lender assign in accordance with Section 11.7, 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 Assignment and Assumption attached hereto as EXHIBIT C 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 limitation, all
accrued interest and fees and, to the extent not paid by the Borrower, any
payments required pursuant to Section 5.4(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 LIBOR Rate Loans, the Borrower shall indemnify each Lender against any loss,
cost or expense incurred by such Lender
33
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 3.4(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 3.5 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) Base Rate Loans. If such Loan is a Base Rate 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 Base Rate Loan and on the date such Base Rate Loan shall become
due and payable or shall otherwise be paid in full.
(ii) LIBOR Rate Loans. If such Loan is a LIBOR 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 3.6 Additional Interest on LIBOR 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 LIBOR 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 LIBOR Rate Loan of such Lender,
from the date of such LIBOR 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 LIBOR Rate for the Interest Period for such LIBOR Rate
Loan from (ii) the rate obtained by dividing such LIBOR Rate by a percentage
equal to 100% minus the Eurodollar Reserve Percentage of such Lender for such
Interest Period, payable on each date on which interest is payable on such LIBOR
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
3.6). 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
34
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 3.7 Default Rate. Subject to Section 9.3, (i) immediately upon the
occurrence and during the continuance of an Event of Default under Section
9.1(a) or (f), or (ii) at the election of the Required Lenders, upon the
occurrence and during the continuance of any other Event of Default, (A) the
Borrower shall no longer have the option to request LIBOR Rate Loans or Letters
of Credit, (B) all outstanding LIBOR Rate Loans shall bear interest at a rate
per annum of two percent (2%) in excess of the Applicable Rate with respect to
LIBOR Rate Loans until the end of the applicable Interest Period and thereafter
at a rate per annum equal to two percent (2%) in excess of the Applicable Rate
with respect to Base Rate Loans, and (C) all outstanding Base Rate Loans and
other Obligations arising hereunder or under any other Loan Document shall bear
interest at a rate per annum equal to two percent (2%) in excess of the
Applicable Rate with respect to Base Rate Loans. Interest shall continue to
accrue on the Obligations after the filing by or against the Borrower of any
petition seeking any relief in bankruptcy or under any act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign.
Section 3.8 New Lenders. On the Closing Date, each Lender not party to the
Existing Credit Agreement on the Closing Date shall purchase by assignment from
one or more lenders party to the Existing Credit Agreement which will not be
Lenders hereunder 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 Lender shall
equal such Lender's Percentage of the aggregate amount of Loans owing to all
Lenders.
ARTICLE IV
LETTERS OF CREDIT
Section 4.1 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 4.2(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 4.2 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,
35
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 Final
Maturity 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 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 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
4.2(d), deemed issuance (or extension, modification or amendment) of such Letter
of Credit, in the manner and the amount provided in Section 4.4(b), and the
issuance (or, pursuant to Section 4.2(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; provided that any Existing Letter of Credit on Schedule 1.1(B) shall
be deemed to be a Letter of Credit issued hereunder without any further notice
or other action by the Borrower. 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 6.2, 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,
36
however, that nothing contained in this Section 4.2 shall extend, modify or
otherwise affect the existing expiry date under any such Existing Letter of
Credit.
(e) Each Letter of Credit shall be subject to ISP98.
Section 4.3 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 4.4 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 4.2(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 Base Rate
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 4.2(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 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 4.4, 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 Defaulting Lender shall fail to make any payment to the
Administrative Agent for the account of an Issuing Bank in accordance with
subsection (b)
37
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 5.5 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 a Base Rate 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 4.2(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.
(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 Existing Letter of
Credit or an Evergreen Letter of Credit that occurs after the Final Maturity
Date. In furtherance of the foregoing, any Existing Letter of Credit or
Evergreen Letter of Credit that remains outstanding after the Final Maturity
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 Final Maturity Date.
Section 4.5 Obligations Absolute. Subject to Section 4.4(e), the payment
obligations of each Lender under Section 4.4(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 4.4(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 4.6 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;
38
(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 4.2(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 4.6 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 to Section 4.2(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 4.2(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 5.1 Payments and Computations.
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(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's Office in same day funds, except payments to be made
directly to the Issuing Banks 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 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 of such unpaid
amount. Upon the Administrative Agent's acceptance of a Assignment and
Assumption and recording of the information contained therein in the Register
pursuant to Section 11.7, from and after the effective date specified in such
Assignment and Assumption, 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 Assignment
and Assumption 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 Base 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 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 LIBOR 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
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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 Rate.
(f) 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 5.2 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 3.5(b)(i) or
(ii).
Section 5.3 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 LIBOR Rate Loans, and one Business Day's notice, with respect to Base
Rate 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 LIBOR Rate Loans, and subject to Section 5.4(d), any amount
payable to the Lenders pursuant to Section 5.4(b); provided, however, that each
partial prepayment shall be in an aggregate principal amount of not less than
(A) in the case of LIBOR Loans, $5,000,000 or an integral multiple of $1,000,000
in excess thereof or (B) in the case of Base Rate Loans, $1,000,000 or an
integral multiple of $500,000 in excess thereof.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.3, 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 of Loans hereunder and the aggregate
amount of LC Outstandings 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 LIBOR Rate Loans, and subject to
Section 5.4(d), any amount payable to the Lenders pursuant to Section 5.4(b).
Any prepayments required by this subsection (b) shall be applied to outstanding
Base Rate Loans up to the full amount thereof before they are applied to
outstanding LIBOR Rate Loans.
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Section 5.4 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 any
increase in (A) the cost to any Lender of agreeing to make or making, funding or
maintaining LIBOR Rate Loans, or of participating in the issuance, maintenance
or funding of any Letter of Credit, or (B) the cost to the 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 2.3(d) or
Section 5.3, an acceleration of maturity of the Loans pursuant to Section 9.2,
or any other reason, any Lender receives payments of principal of any LIBOR Rate
Loan other than on the last day of the Interest Period relating to such Loan, or
if the Borrower shall Convert any LIBOR 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 3.4(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 Banks, whether directly, or indirectly as a
result of commitments of any corporation controlling such Lender or Issuing
Banks (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 Banks, the Borrower shall pay to the Administrative Agent for the
account of such Lender or Issuing Banks from time
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to time as specified by such Lender or Issuing Banks additional amounts
sufficient to compensate such Lender or Issuing Banks in the light of such
circumstances, to the extent that such Lender or Issuing Banks 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 Administrative Agent by such Lender or Issuing
Banks 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 5.4 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 5.4 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 5.4, 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 5.4 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 5.4 was done so in error, such Lender will promptly
return such amount to the Borrower. Notwithstanding any other provision of this
Section 5.4, no Lender or Issuing Banks 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 Banks (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 5.4 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 5.5 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 or other obligations owing to it
pursuant to this Agreement (other than pursuant to Section 5.4, 5.6, 11.4 or
11.7) 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
43
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 Lender so purchasing a participation
from another Lender pursuant to this Section 5.5 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 5.5, on the date of
receipt of such excess payment, return such excess payment to the Administrative
Agent for distribution in accordance with Section 5.1(a).
Section 5.6 Taxes.
(a) All payments by the Borrower hereunder and under the other Loan
Documents shall be made in accordance with Section 5.1, 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, the
Issuing Banks 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
5.6) such Lender, such Issuing Banks 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 5.6) paid by
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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 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 11.2, 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 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 5.6 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
45
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 5.6 ("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 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 5.6 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 5.6 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 6.1 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 Lender, (ii) the General and Refunding Mortgage Bonds in a
principal amount equal to the Commitments, 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) the Promissory Notes (if
requested by any Lender pursuant to Section 3.1(e)), duly executed by the
Borrower and (iv) any other applicable Loan Documents, each of which shall have
been duly authorized, executed and delivered to the Administrative Agent.
(b) Approvals. All governmental and third party approvals (including,
without limitation, any required approvals of the PUCN, the CPUC and any other
applicable regulatory body, including without limitation, any relevant Federal
regulatory bodies) necessary
46
in connection with the transactions contemplated herein, the issuance and
delivery to the Administrative Agent of the General and Refunding Mortgage Bonds
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 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 and the Administrative Agent, Wachovia Capital
Markets, LLC and Deutsche Bank Securities Inc. (each in its capacity as Joint
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 D, and a secretary's certificate of the Borrower, dated
the Closing Date, substantially in the form of EXHIBIT E, with appropriate
insertions and attachments.
(f) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Xxxxxx, Xxxx & Xxxxxxx, special counsel
to the Borrower, in form and substance satisfactory to the
Administrative Agent (including, without limitation, matters governed
by New York law); and
(ii) the legal opinion of Xxxxxxxx and Wedge, Nevada counsel to
the Borrower, in form and substance satisfactory to the Administrative
Agent.
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) General and Refunding Mortgage Bond Documents.
(i) Assignment of General and Refunding Series L Mortgage Bond.
The Administrative Agent shall have received (A) all documents
necessary to transfer the General and Refunding Series L Mortgage Bond
to the Administrative Agent and (B) a legal opinion with respect to
such transfer; and
(ii) New General and Refunding Mortgage Bonds. 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 General and Refunding Mortgage Bonds; a "Company Order"
requesting authentication of the General
47
and Refunding Mortgage Bond by the trustee under the General and
Refunding Mortgage Indenture; and all legal opinions provided in
connection with the issuance of the General and Refunding Mortgage
Bonds.
(h) 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 7.1(a) and (ii) projections for the Borrower
through the fiscal year ending December 31, 2010.
(i) 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 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.
(j) 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 with respect to the Borrower by the
Secretary of State in the Borrower's jurisdiction of incorporation.
(k) 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.
Section 6.2 Conditions Precedent to Each Extension of Credit. The
obligation of each Lender or Issuing Banks, 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) 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 made after the
occurrence of a Debt Ratings Trigger and during the period that the Borrower's
Unsecured Debt Ratings remain at the levels required to give effect to the Debt
Ratings Trigger, the representations and warranties set forth in Section 7.1(b)
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 (b) 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.
Section 6.3 Determinations Under Section 6.1. For purposes of determining
compliance with the conditions specified in Section 6.1, 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 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.
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Section 6.4 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 7.1 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, 2003 and December 31, 2004 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 and its Subsidiaries 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, 2004 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, 2004, 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 7.1(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
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,
49
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 or
assignment of the General and Refunding Mortgage Bonds 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 7.1(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 (other than
pursuant to the Loan Documents) 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 7.1(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 7.1(g). No Default or Event of Default has
occurred and is continuing.
(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.
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(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.
The CPUC has issued an order exempting the Borrower from any requirement to
obtain the consent of the CPUC connection with any financing transaction or
granting of a security interest, and such exemption 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 expected to have a Material Adverse Effect. All payments due from
the Borrower or any of its
51
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 and California administered
by the PUCN and the CPUC, respectively).
(p) Subsidiaries.
(i) The Subsidiaries listed on Schedule 7.1(p) constitute all the
Subsidiaries of the Borrower at the date hereof. Schedule 7.1(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 for working capital and general corporate purposes of the Borrower and its
Subsidiaries, including, without limitation, the refinancing of certain
Indebtedness outstanding as of the Closing Date, Capital Expenditures in the
ordinary course of business, acquisitions permitted hereunder, commercial paper
back-stop purposes and the payment of certain fees and expenses incurred in
connection with the transactions contemplated by this Agreement.
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(r) Environmental Matters. Except with respect to matters existing on
the Closing Date as set forth in the Borrower's Annual Report on Form 10-K for
the fiscal year ended December 31, 2004 and Quarterly Reports on Form 10-Q for
the fiscal quarters ended March 31, 2005 and June 30, 2005, and 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:
(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.
53
(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.
(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) General and Refunding Mortgage Bonds.
(i) The General and Refunding Mortgage Bonds, 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 valid and binding
obligations of the Borrower, enforceable against the Borrower in
accordance with their 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
General and Refunding Mortgage Bonds in accordance with and upon the
terms and conditions set forth herein.
(ii) The General and Refunding Mortgage Bonds have been duly and
validly issued and are entitled to the security and benefits of the
General and Refunding
54
Mortgage Indenture; are secured equally and ratably with, and only
with, all other securities issued and outstanding under the General
and Refunding Mortgage Indenture; and are 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.
(v) OFAC. None of the Borrower, any Subsidiary of the Borrower or any
Affiliate of the Borrower: (i) is a Sanctioned Person, (ii) has more than 10% of
its assets in Sanctioned Entities, or (iii) derives more than 10% of its
operating income from investments in, or transactions with Sanctioned Persons or
Sanctioned Entities. The proceeds of any Extension of Credit will not be used
and have not been used to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned
Entity
ARTICLE VIII
COVENANTS OF THE BORROWER
Section 8.1 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 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 (or, if
earlier, on the date of any required public filing thereof) 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; provided that, electronic delivery by
the Borrower to the Administrative Agent and the Lenders of the
Borrower's annual report to the SEC on Form 10-K with respect to any
fiscal year within the period specified above shall be deemed to be
compliance by the Borrower with this Section 8.1(a)(i); and
(ii) as soon as available, but in any event not later than 45
(or, if earlier, on the date of any required public filing thereof)
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
55
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); provided that, electronic delivery by the Borrower to
the Administrative Agent and the Lenders of the Borrower's quarterly
report to the SEC on Form 10-Q with respect to any fiscal quarter
within the period specified above shall be deemed to be compliance by
the Borrower with this Section 8.1(a)(ii).
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 8.1(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 8.3;
(ii) if requested by the Administrative Agent or another Lender
within five days after such request, 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 such request, copies of all financial statements and
reports that the Borrower may make to, or file with, the SEC; and
(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.
56
(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 8.2(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 7.1(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, hazard 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 accounts 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;
(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
57
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;
(v) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect; and
(vi) any change in the Borrower's Debt Ratings.
Each notice pursuant to this Section (other than clause (vi)) 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. Except where the failure to take the following
actions could not reasonably be expected to have a Material Adverse Effect,
(i) comply with, and ensure compliance by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply with and maintain, and ensure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by
applicable Environmental Laws; and
(ii) conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply with all lawful orders
and directives of all Governmental Authorities regarding Environmental
Laws.
Section 8.2 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
(collectively, "incur"), with respect to 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 2.0 to 1,
determined on a pro forma basis (including a pro forma application of
the net
58
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 8.2(a) will not prohibit the incurrence of any of
the following items of Indebtedness (collectively, "Permitted Debt"):
(A) the incurrence by the Borrower of Indebtedness pursuant
to any Loan Document, the aggregate principal amount of which is
evidenced by the General and Refunding Mortgage Bonds, and the
incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee
of such Indebtedness pursuant to Section 8.2(o);
(B) the incurrence by the Borrower and its Subsidiaries of
the Existing Indebtedness;
(C) 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 (C), not to exceed $20,000,000 at any
time outstanding;
(D) 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 8.2(a)(i) or clauses (B), (C) or
(J) of this Section 8.2(a)(ii);
(E) the incurrence by the Borrower or any of its
Subsidiaries of intercompany Indebtedness between or among the
Borrower, any of its Subsidiaries, Sierra Pacific Resources or
Nevada Power Company; provided, however, that:
(I) 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, unless such Indebtedness
constitutes ordinary course intercompany payables;
(II) 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;
59
(III) 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 (E); and
(IV) 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 (E)
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;
(F) the incurrence by the Borrower or any of its
Subsidiaries of Hedging Obligations or any Indebtedness pursuant
to a Hedge Agreement, in each case, incurred in the normal course
of business and not for speculative purposes;
(G) 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 8.2(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;
(H) 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
8.2(a); provided, in each such case, that the amount thereof is
included in the Fixed Charges of the Borrower as accrued;
(I) 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);
(J) the incurrence by the Borrower of additional
Indebtedness consisting of securities issued pursuant to the
General and Refunding
60
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;
(K) 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;
(L) the incurrence by the Borrower of additional
Indebtedness to finance capital expenditures incurred pursuant to
the Borrower's 2004 Integrated Resource Plan as approved or
amended under order by the PUCN or the CPUC (as applicable) 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 (L); and
(M) 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 (M), not to
exceed $50,000,000 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
8.2(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 Debt described in clauses (A) through
(M) of Section 8.2(a)(ii), or is entitled to be incurred pursuant
to Section 8.2(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 8.2(a); and
61
(B) with respect to 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 or any other Hedge Agreement, in each case, incurred in
the normal course of business and not for speculative purposes
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 8.2(a)(ii)(C) covering only the
assets acquired with such Indebtedness;
(vii) Liens existing on the Closing Date listed on Schedule
8.2(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 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 or any other Hedge Agreement, in each
case, incurred in the normal
62
course of business and not for speculative purposes) that do not
exceed $15,000,000 at any one time outstanding;
(x) Liens to secure Indebtedness permitted by clauses (F), (K),
(L) or (M) of Section 8.2(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 8.2(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 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;
63
(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
8.2(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
8.2(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 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
64
(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
$50,000,000 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;
(8) the payment of any dividend by the Borrower on
its Class A Series 1 preferred stock outstanding; and
(9) other Restricted Payments in an aggregate
amount since the Closing Date not to exceed $50,000,000;
provided that, with respect to clauses (2), (3), (5), (7) and (9) 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
66
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 8.2(e) were computed, together with a copy
of any fairness opinion or appraisal required under this Agreement; provided
further, that during any period of time that the General and Refunding Mortgage
Bonds have a rating from any two of the Rating Agencies of (i) BBB- or higher
from S&P and/or (ii) BBB- or higher from Fitch and/or (iii) Baa3 or higher from
Xxxxx'x, in each case with a stable or better outlook, and no Default or Event
of Default has occurred and is continuing hereunder or under any Loan Document,
the Borrower and its Subsidiaries shall not be subject to Section 8.2(e),
provided that, if the Borrower and its Subsidiaries are not subject to Section
8.2(e) for any period of time as a result of the foregoing and if, subsequently,
more than one of the Rating Agencies withdraw their ratings or downgrade the
General and Refunding Mortgage Bonds below such required rating or a Default or
Event of Default (other than with respect to Section 8.2(e)) occurs and is
continuing, the Borrower and its Subsidiaries shall thereafter again be subject
to Section 8.2(e), (each such date of reinstatement being the "Reinstatement
Date"). Compliance with Section 8.2(e) with respect to Restricted Payments made
after the Reinstatement Date shall be calculated in accordance with the terms of
Section 8.2(e) as though such covenant had been in effect during the entire
period of time from which the General and Refunding Mortgage Bonds are issued,
provided, however, that no immediate Default or Event of Default shall occur as
a result of such reinstatement of Section 8.2(e).
(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 reasonably
determined by the Administrative Agent to be adverse to the Lenders.
(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
8.2(a)(i);
67
(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 8.2(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 8.2, 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.
(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 the 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;
68
(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 8.2(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;
(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 8.2(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.
69
(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;
(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.
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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 8.2(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 8.3 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 1.00.
(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 2.00 to 1.00.
(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 the Final Maturity
Date, 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.
ARTICLE IX
DEFAULTS
Section 9.1 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 9.2:
(a) The Borrower shall:
(i) fail to pay any principal of any Loan when due in accordance
with the terms hereof; or
(ii) fail to pay any interest on any Loan, or any other amount
payable hereunder or under any other Loan Document, within five (5)
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
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(c) The Borrower shall default in the observance or performance of any
agreement contained in clause (A) or (B) of Section 8.1(d)(i), Section
8.1(g)(i), Section 8.2 or Section 8.3; 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 9.1(e)(ii), (A) default in making any payment of any amount owing to a
counterparty under any Hedge Agreement beyond the period of grace, if any,
provided in such Hedge Agreement; or (B) default in the observance or
performance of any other agreement or condition relating to any such Hedge
Agreement or contained in such Hedge Agreement or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the counterparty under such Hedge Agreement to cause, with
the giving of notice if required, the Borrower or such Subsidiary to make a
termination payment, payment of liquidated damages or similar payment under such
Hedge Agreement (collectively, "Payment Amounts"); provided, that a default,
event or condition described in clause (i) or (ii) of this paragraph (e) shall
not at any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i) and (ii) of
this paragraph (e) shall have occurred and be continuing with respect to
Indebtedness and/or Payment Amounts the outstanding principal amount of which
exceeds $15,000,000 in the aggregate ; 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
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(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
(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
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character to the Events of Default described in paragraphs (c) and (d) of this
Section 9.1 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 of the Issuing Banks 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 9.2 Remedies. Upon the occurrence of an Event of Default, with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower:
(a) Acceleration; Termination of Facilities. Terminate the Commitments
and declare the principal of and interest on the Loans at the time outstanding,
and all other amounts owed to the Lenders and to the Administrative Agent under
this Agreement or any of the other Loan Documents (including, without
limitation, all LC Outstandings, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented or shall be entitled to
present the documents required thereunder) and all other Obligations (other than
Hedging Obligations), to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived by the Borrower, anything
in this Agreement or the other Loan Documents to the contrary notwithstanding,
and terminate the credit facility under this Agreement and any right of the
Borrower to request borrowings or Letters of Credit thereunder; provided, that
upon the occurrence of an Event of Default specified in Section 9.1(f), the
credit facility under this Agreement shall be automatically terminated and all
Obligations (other than Hedging Obligations) shall automatically become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are expressly waived by the Borrower, anything in this Agreement or in any
other Loan Document to the contrary notwithstanding.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Borrower shall at such
time deposit in a cash collateral account opened by and under the control of the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit. Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall
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have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations on a pro rata basis. After all such Letters of Credit shall
have expired or been fully drawn upon, the LC Outstandings shall have been
satisfied and all other Obligations shall have been paid in full, the balance,
if any, in such cash collateral account shall be returned to the Borrower.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations.
Section 9.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
Section 9.4 Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 9.2, all payments received by the
Lenders upon the Obligations and all net proceeds from the enforcement of the
Obligations shall be applied:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts, including attorney fees, payable to the
Administrative Agent in its capacity as such and the Issuing Banks in their
respective capacities as such (ratably among the Administrative Agent and the
Issuing Banks in proportion to the respective amounts described in this clause
First payable to them);
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders, including attorney fees (ratably among the Lenders in proportion to the
respective amounts described in this clause Second payable to them);
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and LC Outstandings and any Hedging Obligations
(including any accrued and unpaid interest thereon, but excluding any
termination payments paid pursuant to Clause Fourth)
(ratably among the Lenders in proportion to the respective amounts described in
this clause Third payable to them);
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Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and LC Outstandings (including any termination payments
paid in connection with Hedging Obligations)(ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them);
Fifth, to the Administrative Agent for the account of the Issuing Banks, to
cash collateralize any LC Outstandings; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Section 9.5 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower, the Administrative Agent (irrespective of
whether the principal of any Loan or LC Outstandings shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, LC Outstandings and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.2, 4.3 and 11.4) allowed in such
judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.2, 4.3 and 11.4.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
ARTICLE X
THE ADMINISTRATIVE AGENT
Section 10.1 Appointment and Authority. Each of the Lenders and the Issuing
Banks hereby irrevocably appoints Wachovia to act on its behalf as the
Administrative Agent hereunder
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and under the other Loan Documents 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 hereof or thereof, together with such
actions and powers as are reasonably incidental thereto. The provisions of this
Article are solely for the benefit of the Administrative Agent, the Lenders and
the Issuing Banks, and neither the Borrower nor any Subsidiary thereof shall
have rights as a third party beneficiary of any of such provisions.
Section 10.2 Rights as a Lender. The Person serving as the 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 the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
Section 10.3 Exculpatory Provisions. The Administrative Agent shall not
have any duties or obligations except those expressly set forth herein and in
the other Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default or Event of Default has occurred and is
continuing;
(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or any Requirement of Law;
and
(c) shall not, except as expressly set forth herein and in the other
Loan Documents, 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
Affiliates that is communicated to or obtained by the Person serving as the
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 (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 9.2 and 11.1) or (ii) in the absence of
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction by final nonappealable judgment. The Administrative Agent
shall be deemed not to have knowledge of any Default or Event of Default unless
and until written notice describing such Default or Event of Default is given to
the Administrative Agent by the Borrower, a Lender or the Issuing Banks.
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The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Article VI or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
Section 10.4 Reliance by the Administrative Agent. 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 (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated 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 have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or the Issuing
Banks, the Administrative Agent may presume that such condition is satisfactory
to such Lender or the Issuing Banks unless the Administrative Agent shall have
received notice to the contrary from such Lender or the Issuing Banks prior to
the making of such Loan or the issuance of such Letter of Credit. 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 accordance with the
advice of any such counsel, accountants or experts.
Section 10.5 Delegation of Duties. The Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article 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.
Section 10.6 Resignation of Administrative Agent.
(a) The Administrative Agent may at any time give notice of its
resignation to the Lenders, the Issuing Banks and the Borrower. Upon receipt of
any such notice of 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 or continuance of an
Event of Default), in consultation with the Borrower, to appoint a successor,
which shall be a bank with an office in the United States, or an Affiliate of
any such bank with an office in the United States. If no such successor shall
have been so appointed by
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the 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 and without the requirement of the consent of any other Person (other than
the successor Administrative Agent), appoint a successor Administrative Agent
meeting the qualifications set forth above; provided that if the Administrative
Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (i) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents (except that in the case of any collateral security
held by the Administrative Agent on behalf of the Lenders or the Issuing Banks
under any of the Loan Documents, the retiring Administrative Agent shall
continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (ii) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and the Issuing Banks directly, until
such time as the Required Lenders appoint a successor Administrative Agent as
provided for above in this paragraph. Upon the acceptance of a successor's
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this paragraph). 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
retiring Administrative Agent's resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 11.4 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 the retiring Administrative Agent was acting as
Administrative Agent.
(b) Any resignation by Wachovia as Administrative Agent pursuant to
this Section shall also constitute its resignation as an Issuing Bank. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, (i)
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Issuing Bank, (ii) the retiring
Issuing Bank shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (iii) the successor
Issuing Bank shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other
arrangement satisfactory to the retiring Issuing Bank to effectively assume the
obligations of the retiring Issuing Bank with respect to such Letters of Credit.
Section 10.7 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender and each Issuing Bank acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties 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 and each Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall
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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 10.8 No Other Duties, etc. Anything herein to the contrary
notwithstanding, none of the syndication agents, documentation agents,
co-agents, book manager, lead manager, arranger, lead arranger or co-arranger
listed on the cover page or signature pages hereof shall have any powers, duties
or responsibilities under this Agreement or any of the other Loan Documents,
except in its capacity, as applicable, as the Administrative Agent, a Lender or
an Issuing Bank hereunder.
Section 10.9 Collateral and Guaranty Matters. The Lenders and the Issuing
Banks irrevocably authorize the Administrative Agent, at its option and in its
discretion,
(a) to release any Lien on any collateral granted to or held by the
Administrative Agent (including, without limitation, the General and Refunding
Mortgage Bonds), for the ratable benefit of itself and the Lenders, under any
Loan Document (i) upon repayment of all outstanding principal of and all accrued
interest on the Loans, payment of all outstanding fees and expenses hereunder,
the termination of the Lenders' Commitments and the expiration or termination of
all Letters of Credit, (ii) upon the occurrence of the Debt Ratings Trigger or
(iii) subject to Section 11.1, if approved, authorized or ratified in writing by
the Required Lenders;
(b) to subordinate any Lien on any collateral granted to or held by
the Administrative Agent under any Loan Document to the holder of any Lien on
such collateral that is permitted by Section 8.2(b)(vii); and
(c) to release any Subsidiary Guarantor from its obligations under the
Subsidiary Guarantee such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent's authority to release or
subordinate its interest in particular types or items of property, or to release
any Subsidiary Guarantor from its obligations under any Subsidiary Guarantee
pursuant to this Section.
ARTICLE XI
MISCELLANEOUS
Section 11.1 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
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Lenders to any additional obligations (other than as provided by this
Agreement), (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 2.2(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 2.2(d)), (v) change the
definition of "Required Lenders" contained in Section 1.1 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 General and
Refunding Mortgage Bonds 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 General and
Refunding Mortgage Bonds or Subsidiary Guarantees, if any, except pursuant to
the terms thereof or pursuant to Section 10.9 hereof, or change any provision of
the General and Refunding Mortgage Bonds providing for the release of the
General and Refunding Mortgage Bonds, or (ix) amend, waive or modify this
Section 11.1; 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 the Issuing Banks under this
Agreement or any other Loan Document. Any request from the Borrower for any
amendment, waiver or consent under this Section 11.1 shall be addressed to the
Administrative Agent. The Administrative Agent, as holder of the General and
Refunding Mortgage Bonds, 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 11.2 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, sent via
electronic mail, telegraphed, telecopied, telexed, cabled or delivered, (i) if
to the Borrower, at its address at 0000 Xxxxx Xxxx, Xxxx, Xxxxxx, 00000,
Attention: Xxxxxxx X. Xxxxxx (Telecopy No.: (000) 000-0000); (ii) if to any
Lender, at its Domestic Lending Office specified opposite its name on Schedule
1.1(A); (iii) if to any Issuing Bank (other than Wachovia), as Issuing Bank, at
its address specified in its Issuing Bank Agreement; (iv) if to any Lender other
than a Lender listed on Schedule 1.1(A), at its Domestic Lending Office
specified in the Assignment and Assumption pursuant to which it became a Lender;
and (v) if to Wachovia as Administrative Agent or Issuing Bank, at its address
at Wachovia Bank, National Association, Xxxxxxxxx Xxxxx, XX-0, 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Syndication Agency
Services; Telephone No.: (000) 000-0000; Telecopy No.: (000) 000-0000; 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
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communications shall, when mailed, sent via electronic mail, 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 11.3 No Waiver of Remedies. No failure on the part of the Borrower,
any Lender, the Issuing Banks 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 11.4 Costs, Expenses and Indemnification.
(a) Costs and Expenses. The Borrower hereby agrees to pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Banks in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
Issuing Banks (including the fees, charges and disbursements of any counsel for
the Administrative Agent, any Lender or the Issuing Banks), in connection with
the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section,
or (B) in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing
Banks, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims (including, without limitation, any environmental
claims or civil penalties or fines assessed by OFAC), damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee) arising out of, in connection with, or as a result of (i)
the execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Banks to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Substances on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
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environmental claim related in any way to the Borrower or any of its
Subsidiaries, (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, whether brought by a third party or by the Borrower, and
regardless of whether any Indemnitee is a party thereto, or (v) any claim
(including, without limitation, any environmental claims or civil penalties or
fines assessed by OFAC), investigation, litigation or other proceeding (whether
or not the Administrative Agent or any Lender is a party thereto) and the
prosecution and defense thereof, arising out of or in any way connected with the
Loans, this Agreement, any other Loan Document, or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby, including without limitation, reasonable attorneys and consultant's
fees, provided that such indemnity shall not, as to any Indemnitee, 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 willful misconduct of
such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under clause (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the Issuing Banks or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the Issuing Banks or such Related Party, as the case may be, such
Lender's Percentage (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the Issuing Banks in its
capacity as such, or against any Related Party of any of the foregoing acting
for the Administrative Agent (or any such sub-agent) or Issuing Banks in
connection with such capacity. The obligations of the Lenders under this clause
(c) are subject to the provisions of Section 5.5
(d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by any Requirement of Law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in clause
(b) above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.
(e) Payments. All amounts due under this Section shall be payable
promptly after demand therefor.
Section 11.5 Right of Set-off.
(a) If an Event of Default shall have occurred and be continuing, each
Lender, the Issuing Banks and each of their respective Affiliates is hereby
authorized at any time and
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from time to time, to the fullest extent permitted by any Requirement of Law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the Issuing
Banks or any such Affiliate to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower or now or hereafter
existing under this Agreement or any other Loan Document to such Lender or the
Issuing Banks, irrespective of whether or not such Lender or the Issuing Banks
shall have made any demand under this Agreement or any other Loan Document and
although such obligations of the Borrower may be contingent or unmatured or are
owed to a branch or office of such Lender or the Issuing Banks different from
the branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender or the Issuing Banks and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender or the Issuing Banks or their respective
Affiliates may have. Each Lender or the Issuing Banks agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application.
(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 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 not be liable for
any such conduct on the part of any Lender.
Section 11.6 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 11.7 Successors and Assigns; Participations.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of paragraph (b) of this Section, (ii) by way of participation in accordance
with the provisions of paragraph (d) of this Section or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of paragraph
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective
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successors and assigns permitted hereby, Participants to the extent provided in
paragraph (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that
(A) except in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the
Loans at the time owing to it or in the case of an assignment to
a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment
(which for this purpose includes Loans outstanding thereunder)
or, if the applicable Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (determined as of the date
the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is
specified in the Assignment and Assumption, as of the Trade Date)
shall not be less than $5,000,000, unless (A) such assignment is
made to an existing Lender, to an Affiliate thereof, or to an
Approved Fund, in which case no minimum amount shall apply, or
(B) each of the Administrative Agent and, so long as no Default
or Event of Default has occurred and is continuing, the Borrower
otherwise consent (each such consent not to be unreasonably
withheld or delayed); provided that the Borrower shall be deemed
to have given its consent five (5) Business Days after the date
written notice thereof has been delivered by the assigning Lender
(through the Administrative Agent) unless such consent is
expressly refused by the Borrower prior to such fifth (5th)
Business Day;
(B) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loan or the
Commitment assigned
(C) any assignment of a Commitment must be approved by the
Administrative Agent and the Issuing Banks unless the Person that
is the proposed assignee is itself a Lender or an Affiliate of a
Lender with a Commitment (whether or not the proposed assignee
would otherwise qualify as an Eligible Assignee); and
(D) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption,
together with, except in the case of an assignment to a Lender or
an Affiliate of a Lender or an Approved Fund with respect to a
Lender, a processing and
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recordation fee of $3,500 for each assignment, and the Eligible
Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 5.4, 5.6, and 11.4 with respect to
facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at one of its offices in Charlotte,
North Carolina, a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent
of, or notice to, the Borrower or the Administrative Agent, sell participations
to any Person (other than a natural person or the Borrower or any of the
Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or a
portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent 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 to approve any amendment, modification or waiver of
any provision of this Agreement; 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 or modification described in Section
11.1 that directly affects such Participant. Subject to paragraph (e) of this
Section, the
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Borrower agrees that each Participant shall be entitled to the benefits of
Sections 5.4 and 5.6 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to paragraph (b) of this Section. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 11.5 as though it were a Lender, provided such Participant agrees to
be subject to Section 5.5 as though it were a Lender.
(e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Sections 5.4 and 5.6 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 5.6 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 5.6 as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
Section 11.8 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") (a) information which is
identified to the Recipient when delivered as confidential and (b) projections
or similar financial information or forward-looking information, whether or not
identified to the Recipient when delivered as confidential (such information,
other than any such information which (i) was publicly available, or otherwise
known to the Recipient, at the time of disclosure, (ii) subsequently becomes
publicly available other than through any act or omission by the Recipient or
(iii) 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 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 11.8. 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
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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 (or any Hedge
Agreement with a Lender or the Administrative Agent); 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. The agreements in this Section
11.8 shall survive any assignments made pursuant to Section 11.7 or otherwise;
provided, however, that the obligations of a Recipient under this Section 11.8
shall terminate upon the first anniversary of the date of the repayment of the
Loans and other obligations under the Loan Documents and the termination of the
Commitments hereunder.
Section 11.9 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
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 (without regard to the conflicts of laws
principles thereof). The Borrower, the Lenders, the Issuing Banks and the
Administrative Agent each (a) 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, (b) agrees that all claims in such action may be
decided in such court, (c) waives, to the fullest extent it may effectively do
so, the defense of an inconvenient forum and (d) 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
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Lenders, on the one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of creditor and debtor.
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 Survival of Indemnities. Notwithstanding any termination of
this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XI and any other
provision of this Agreement and the other Loan Documents shall continue in full
force and effect and shall protect the Administrative Agent and the Lenders
against events arising after such termination as well as before.
Section 11.15 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.
Section 11.16 Amendment and Restatement; No Novation. This Agreement
constitutes an amendment and restatement of the Existing Credit Agreement
effective from and after the Closing Date. The execution and delivery of this
Agreement shall not constitute a novation of any indebtedness or other
obligations owing to the Lenders or the Administrative Agent under the Existing
Credit Agreement based on any facts or events occurring or existing prior to the
execution and delivery of this Agreement. On the Closing Date, (a) the credit
facilities described in the Existing Credit Agreement shall be amended and
supplemented by the facilities described herein, (b) all Loans outstanding as of
such date under the Existing Credit Agreement shall be deemed to be Loans
outstanding hereunder and the Administrative Agent shall make such transfers of
funds and adjustments to the Register as are necessary in order that the
outstanding balance of such Loans, together with any Loans funded hereunder on
the Closing Date, reflect the Commitments of the Lenders hereunder, and (c) all
Existing Letters of Credit outstanding as of such date under the Existing Credit
Agreement shall be deemed to be Letters of Credit outstanding hereunder, in each
case, without further action by any Person.
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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.
SIERRA PACIFIC POWER COMPANY
By:
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Name:
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Title:
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[Signature pages continue]
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and an
Issuing Bank
By:
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Name:
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Title:
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