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LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
dated as of October 1, 1995
among
NEVADA POWER COMPANY,
THE BANKS NAMED HEREIN
and
BARCLAYS BANK PLC, NEW YORK BRANCH,
as Administrative Agent and Letter of Credit Bank
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Defined Terms...................... 1
SECTION 1.02. Computation of Time Periods.................10
SECTION 1.03. Accounting Terms...........................10
SECTION 1.04. Interpretation.............................10
ARTICLE II AMOUNT AND TERMS OF THE LETTERS OF CREDIT
SECTION 2.01. The Letters of Credit......................11
SECTION 2.02. Issuing the Letters of Credit..............11
SECTION 2.03. Commissions and Fees.......................11
SECTION 2.04. Reimbursement On Demand....................11
SECTION 2.05. Advances and Interest......................12
SECTION 2.06. Prepayments................................13
SECTION 2.07. Increased Costs............................13
SECTION 2.08. Increased Capital..........................14
SECTION 2.09. Payments and Computations..................15
SECTION 2.10. Non-Business Days..........................15
SECTION 2.11. Extension of the Stated Termination Date...15
SECTION 2.12. Evidence of Debt...........................15
SECTION 2.13. Obligations Absolute.......................16
SECTION 2.14. Taxes......................................16
SECTION 2.15. Additional Interest.........................17
SECTION 2.16. Funding Indemnity...........................18
SECTION 2.17. Illegality, etc.............................18
SECTION 2.18. Reinstatement of Letter of Credit...........19
ARTICLE III CONDITIONS PRECEDENT
SECTION 3.01. Condition Precedent to Issuance of the
Letters of Credit..........................19
SECTION 3.02. Additional Conditions Precedent to
Issuance of the Letters of Credit..........21
SECTION 3.03. Conditions Precedent to Each Advance.......21
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Company....................................22
ARTICLE V COVENANTS OF THE COMPANY
SECTION 5.01. Affirmative Covenants......................26
TABLE OF CONTENTS
(Continued)
Page
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SECTION 5.02. Negative Covenants.........................30
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default..........................31
SECTION 6.02. Upon an Event of Default...................33
ARTICLE VII MISCELLANEOUS
SECTION 7.01. Amendments, Etc............................34
SECTION 7.02. Notices, Etc...............................35
SECTION 7.03. No Waiver: Remedies........................35
SECTION 7.04. Right of Set-off...........................35
SECTION 7.05. Indemnification............................36
SECTION 7.06. Banks Not Liable...........................36
SECTION 7.07. Costs, Expenses and Taxes..................37
SECTION 7.08. Binding Effect.............................38
SECTION 7.09. Severability...............................38
SECTION 7.10. Governing Law; Submission to Jurisdiction;
Etc. ......................................38
SECTION 7.11. Headings...................................39
SECTION 7.12. Counterparts...............................39
SECTION 7.13. Waiver of Jury Trial.......................39
SECTION 7.14. Participation and Assignment...............39
ARTICLE VIII SYNDICATION..................................40
SECTION 8.01. Syndication................................40
SECTION 8.02. Sharing of Payments........................41
ARTICLE IX THE ADMINISTRATIVE AGENT AND THE LC BANK......41
SECTION 9.01. Authorization and Action...................41
SECTION 9.02. Administrative Agent's Reliance, Etc........42
SECTION 9.03. Bank Credit Decision.......................42
SECTION 9.04. Indemnification............................42
SECTION 9.05. Barclays and Affiliates....................43
SECTION 9.06. Successor Administrative Agent.............43
EXHIBIT A Form of Irrevocable Letter of Credit with
Exhibits 1 through 5 thereto
EXHIBIT B Form of Custodian Agreement
-ii-
TABLE OF CONTENTS
(Continued)
Page
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EXHIBIT C Form of Opinion of General Counsel of the Company
EXHIBIT D Form of Opinion of Special Counsel to the Company
-iii-
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated as of October
1, 1995, among NEVADA POWER COMPANY, a Nevada corporation (the "Company"),
BARCLAYS BANK PLC, NEW YORK BRANCH, as Administrative Agent and Letter of
Credit Bank, and the Banks (as defined herein).
PRELIMINARY STATEMENTS. (1) ▇▇▇▇▇ County, Nevada (the "Issuer")
has issued various refunding bonds for the purpose of refunding certain tax-
exempt bonds issued for the benefit of the Company and has issued the Series
A Bonds (as defined herein) for the purpose of financing the cost of
facilities for the local furnishing of electric energy.
(2) The Company has requested that the Letter of Credit Bank
issue two irrevocable, transferable letters of credit in substantially the
form of Exhibit A hereto (such letters of credit, as they may from time to
time be extended pursuant to the terms of this Agreement, being collectively
the "Letters of Credit" and each individually a "Letter of Credit"), in the
aggregate amount of $123,211,316 (the "Total Commitment"), of which (i)
$120,750,000 shall support the payment of principal of the Series A Bonds
and the Series C Bonds (as defined herein) or the portion of the purchase
price of such Bonds corresponding to principal (the "Principal Component"),
and (ii) $2,461,316 shall support the payment of up to 62 days' interest on
the principal amount of the Series A Bonds and the Series C Bonds or the
portion of the purchase price of such Bonds corresponding to interest (the
"Interest Component"), computed at an assumed rate of 12% per annum on the
basis of a year of 365 days (the Letter of Credit Bank's obligation to issue
the Letters of Credit as hereinafter provided being hereinafter referred to
as the Commitment (the "Commitment").
NOW, THEREFORE, in consideration of the premises and in order to
induce the Letter of Credit Bank to issue the Letters of Credit, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
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the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Advance" has the meaning provided in Section 2.05 (a).
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"Administrative Agent" means Barclays, acting in its capacity as
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Administrative Agent for the Banks hereunder, and any successor
Administrative Agent.
"Affiliate" means any trade or business (whether or not
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incorporated) which is a member of a group of which the Company is a member
and which is under common control within the meaning of the regulations
under Section 414 of the Code.
"Applicable Eurodollar Margin" means the Applicable L/C Rate then
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in effect.
2
"Applicable L/C Rate" shall mean the following percentages: (i)
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.26% for any day that Level I Status exists; (ii) .295% for any day that
Level II Status exists; (iii) .35% for any day that Level III Status exists;
(iv) .40% for any day that Level IV Status exists; and (v) .625% for any day
that Level V Status exists.
"Authorized Representative" means (i) for the Company, the
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Chairman of the Board, the President, any Vice President, the Director,
Treasury and the Secretary and (ii) for any other Person, an authorized
officer of such Person.
"Bank" means each of the LC Bank and each of the parties
----
identified as a "Bank" on the signature pages hereto, and each Bank that
becomes a party hereto in accordance with Section 7.14(b); provided that the
rights of the LC Bank under this Agreement shall not be diminished or
impaired by reason of the LC Bank also being a Bank hereunder.
"Barclays" means Barclays Bank PLC, New York Branch.
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"Base Rate" means a fluctuating interest rate per annum equal at
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all times to the higher of (i) the Prime Rate or (ii) 1/2 of one percent
above the Federal Funds Rate in effect from time to time. The Base Rate
shall change concurrently with each change in the Prime Rate or Federal
Funds Rate, as the case may be.
"Base Rate Advance" means an Advance bearing interest at the Base
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Rate.
"Bond Purchase Agreement" means the Bond Purchase Agreement
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executed with respect to each Series of Bonds.
"Bonds" means, collectively, the Series A Bonds and the Series C
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Bonds.
"Business Day" means a day of the year on which banks are not
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required or authorized by law to close in New York City or in Los Angeles,
California, and if the applicable Business Day relates to a Eurodollar Rate
Advance, on which dealings are carried on the London interbank eurodollar
market.
"Cancellation Date" has the meaning assigned to that term in each
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Letter of Credit.
"Code" means the Internal Revenue Code of 1986, as amended from
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time to time after the date hereof, and the rules and regulations
promulgated thereunder.
"Commitment" has the meaning assigned to that term in the second
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Preliminary Statement hereto.
"Commitment Termination Date" has the meaning assigned to that
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term in Section 2.01.
"Common Equity" means the common stockholders' equity of the
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Company, less the book value of all intangible assets of the Company.
3
"Common Stock" means the $1.00 par value common stock of the
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Company.
"Custodian Agreement" means the Custodian Agreement in
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substantially the form of Exhibit B hereto.
"Date of Issuance" has the meaning assigned to that term in
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Section 2.02.
"Debt" or "Indebtedness" means (i) indebtedness for borrowed money
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or for the deferred purchase price of property or services, (ii) obligations
as lessee under leases which shall have been or should be, in accordance
with generally accepted accounting principles, recorded as capital leases,
(iii) obligations (contingent or otherwise) in respect of bankers'
acceptances or letters of credit, (iv) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against
loss in respect of, indebtedness or obligations of others of the kinds
referred to in clause (i) through (iii) above, (v) liabilities in respect of
unfunded vested benefits under plans covered by Title IV of ERISA, and (vi)
withdrawal liability incurred under ERISA by the Company or any of its
Affiliates to any Multiemployer Plan.
"Default Rate" means a fluctuating interest rate equal at all
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times to 2% per annum above the Base Rate in effect from time to time;
provided that with respect to a Eurodollar Rate Advance the Default Rate
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shall be the higher of (i) such rate then in effect with respect to such
Eurodollar Rate Advance plus 2% per annum or (ii) the Base Rate plus 2% per
annum.
"Designated Rating" means, with respect to any Rating Agency for
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any day, the rating of the senior secured long-term debt of the Company (a
"Secured Rating") outstanding and in effect on such day (including for this
purpose as separate categories "+" and "-" designations by S&P or "1", "2"
and "3" designations by Moody's). If a Rating Agency does not have a
Secured Rating outstanding and in effect on any day, then there exists no
Designated Rating by such Rating Agency for such day.
"Environmental Claim" means any allegation, notice of violation,
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claim, demand, or order by any governmental authority or any Person for any
damage or for fines, penalties or restrictions, resulting from or based
upon (i) the existence of a Release of, or exposure to, any Hazardous
Material, in, into or onto the environment at, in, by, from or related to
any facility, (ii) the use, handling, transportation, storage, treatment or
disposal of Hazardous Materials in connection with the operation of any
facility, or (iii) the violation of any Environmental Laws.
"Environmental Laws" means all Laws relating to environmental
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matters, including, without limitation, those relating to fines, orders,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of
Hazardous Materials and to the generation, use, storage, transportation, or
disposal of Hazardous Materials, in any manner applicable to Company or any
of its Subsidiaries or any of their respective properties, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act ( 42 U.S.C. Subsection 9601 et seq. ), the Hazardous
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Material Transportation Act ( 49 U.S.C . Subsection 1801 et seq. ), the
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Resource Conservation
4
and Recovery Act ( 42 U.S.C. Subsection 6901 et seq. ), the Federal Water
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Pollution Control Act (33 U.S.C. Subsection 1251 et seq.), the Clean Air Act
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(42 U.S.C. Subsection 7401 et seq.), the Toxic Substances Control Act (15
-- ----
U.S.C. Subsection 2601 et seq.), the Occupational Safety and Health Act (29
-- ----
U.S.C. Subsection 65l et seq.) and the Emergency Planning and Community
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Right to Know Act (42 U.S.C. Subsection 11001 et seq.), each as amended or
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supplemented, and any analogous future or present applicable local, state
and federal statutes and regulations promulgated pursuant thereto, each
as in effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
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"Eurocurrency Liabilities" has the meaning assigned to that term
------------------------
in Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Rate" means, with respect to an Interest Period for a
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Eurodollar Rate Advance, an interest rate per annum equal to (a) the rate
(rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if
such average is not such a multiple) per annum at which deposits in U.S.
dollars are offered by the principal office of the Administrative Agent in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period, in an amount substantially equal to the amount of the relevant
Eurodollar Rate Advance and for a period equal to such Interest Period, plus
(b) the Applicable Eurodollar Margin, as such rate may be adjusted pursuant
to Section 2.15.
"Eurodollar Rate Advance" means an Advance bearing interest at the
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Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" means for any Interest Period
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for any Eurodollar Rate Advance means the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days during
which any such percentage shall be so applicable) under regulations issued
from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the applicable reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for the Banks with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Event of Default" has the meaning assigned to that term in
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Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
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rate per annum equal for each day during such period to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by
it.
5
"Fee Letter" means that certain letter agreement dated the Date of
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Issuance executed by the Company and addressed to the Administrative Agent
and LC Bank.
"Financing Agreement" means each Financing Agreement, dated as of
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October 1, 1995 between the Issuer and the Company, executed with respect to
a Series of Bonds.
"First Mortgage Bond Indenture" means the Indenture of Mortgage
-----------------------------
and Deed of Trust dated October 1, 1953 between the Company and First
Interstate Bank of Nevada, N.A., as amended to the Date of Issuance.
"Fiscal Quarter" means the fiscal quarter of the Company
---------------
consisting of a three month fiscal period ending on each March 31, June 30,
September 30 and December 31.
"Fiscal Year" means the fiscal year of the Company consisting of a
-----------
twelve month fiscal period ending on each December 31.
"Governmental Agency" means (a) any foreign, federal, state,
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county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, (c) any court or
administrative tribunal or (d) with respect to any Person, any arbitration
tribunal or other non-governmental authority to whose jurisdiction that
Person has consented.
"Hazardous Materials" means (i) any chemical, material or
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substance defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," or "toxic substances" or words of
similar import under any applicable local, state or federal Law or under the
regulations adopted or publications promulgated pursuant thereto, including,
without limitation, Environmental Laws, (ii) any oil, petroleum or
petroleum-derived substance, any drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude
oil, any flammable substances or explosives, any radioactive materials, any
hazardous wastes or substances, any toxic wastes or substances or any other
materials or pollutants which (A) pose a hazard to any Property of the
Company or any of its Subsidiaries or to Persons on or about such Property
or (B) cause such Property to be in violation of any Environmental Laws,
(iii) asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyl's in excess
of fifty parts per million, and (iv) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority or may or could pose a hazard to the health and
safety of the owners, occupants or any Persons surrounding any Property of
the Company.
"Indenture" means each Indenture of Trust, dated as of October 1,
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1995 between the Issuer and the Trustee, pursuant to which a Series of Bonds
was issued.
6
"Initial Stated Amount" means $78,314,439 with respect to the
---------------------
Letter of Credit supporting the Series A Bonds and $44,896,877 with respect
to the Letter of Credit supporting the Series C Bonds.
"Interest Component" has the meaning assigned to that term in the
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second Preliminary Statement herein.
"Interest Period" means, with respect to a Eurodollar Rate
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Advance, a period of one day or one month, in each case as elected by the
Company pursuant to Section 2.05(b); provided that any such Interest Period
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that would end on a day that is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day; and provided, further that no Interest Period shall
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extend beyond the scheduled repayment date of an Advance.
"Issuer" has the meaning assigned to that term in the first
------
Preliminary Statement hereto.
"Laws" means, collectively, all foreign, federal state and local
----
statutes, treaties, rules, regulations, ordinances, codes and administrative
or controlling precedents of any Governmental Agency.
"LC Bank" or "Letter of Credit Bank" means Barclays Bank PLC, New
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York Branch.
"Letter of Credit" and "Letters of Credit" have the meanings
---------------- -----------------
assigned to those terms in the second Preliminary Statement hereto.
"Level I Status" exists for any day if, on such day, the Company
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has a Designated Rating of (i) A or higher by S&P or (ii) A2 or higher by
Moody's.
"Level II Status" exists for any day if, on such day, (a) Level I
---------------
Status does not exist and (b) the Company has a Designated Rating of (i)
BBB+ or higher by S&P or (ii) Baa1 or higher by Moodys.
"Level III Status" exists for any day if, on such day, (a) Level I
----------------
or II Status does not exist and (b) the Company has a Designated Rating of
(i) BBB by S&P or (ii) Baa2 by Moody's.
"Level IV Status" exists for any day if, on such day, (a) Level I,
---------------
II or III Status does not exist and (b) the Company has a Designated Rating
of (i) BBB- by S&P or (ii) Baa3 by Moody's.
"Level V Status" exists for any day if, on such day, (a) Level I,
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II, III or IV Status does not exist and (b) the Company has a Designated
Rating of (i) below BBB- by S&P or is unrated or (ii) below Baa3 by Moody's
or is unrated.
7
"Lien" means, with respect to any asset, any lien, security
----
interest or other charge or encumbrance, or any other type of preferential
arrangement in respect of such asset.
"Material Adverse Effect" means any set of circumstances or events
-----------------------
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of this Agreement or
any Related Document, (b) is or could reasonably be expected to be material
and adverse to the condition (financial or otherwise) or business operations
of the Company and its Subsidiaries, taken as a whole, or to the prospects
of the Company and its Subsidiaries, taken as a whole, (c) materially
impairs or could reasonably be expected to materially impair the ability of
the Company and its Subsidiaries, taken as a whole, to perform its
obligations hereunder or under the Related Documents or (d) materially
impairs or could reasonably be expected to materially impair the ability of
the Administrative Agent or the Banks to enforce any of their legal remedies
pursuant to this Agreement or the Related Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or its successor
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and assigns.
"Multiemployer Plan" means a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA with respect to which the Company or any
Affiliate (i) has an obligation to contribute to or (ii) could have
liability.
"Participant" has the meaning provided in Section 7.14(a)
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"PBGC" means the Pension Benefit Guaranty Corporation or any
----
successor thereto.
"Person" means an individual, partnership, corporation (including
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a business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a Governmental Agency.
"Plan" means an employee benefit plan (other than a Multiemployer
----
Plan) maintained or contributed to for employees of the Company or any
Affiliate and covered by Title IV of ERISA or the minimum funding
requirements of Section 412 of the Code.
"Pledged Bond" has the meaning assigned to that term in the
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Custodian Agreement.
"Preferred Stock" means each of (a) the Cumulative Preferred Stock
---------------
$20.00 par value 5.40% Series Preferred Stock of the Company, (b) the
Cumulative Preferred Stock $20.00 par value 5.20% Series Preferred Stock of
the Company, (c) the Cumulative Preferred Stock $20.00 par value 4.70%
Preferred Stock of the Company, and (d) the Cumulative Preferred Stock
$20.00 par value Auction Series A of the Company.
"Prime Rate" means a fluctuating annual rate of interest equal to
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the rate publicly announced or quoted internally by the Administrative Agent
as its Prime Rate. For purposes of this Agreement, any change in the Prime
Rate shall be effective on the date such change is publicly announced or
quoted internally by the Administrative Agent.
8
"Principal Facility" means that certain Loan Agreement dated as of
------------------
November 21, 1994 by and among the Company, First Interstate Bank of Nevada,
N.A., as agent, and the financial institutions party thereto.
"Prior Bonds" means the Series 1985 Bonds as defined in Resolution
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No. 10-3-95-1 adopted by ▇▇▇▇▇ County Nevada on October 3, 1995.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"PSC" means the Public Service Commission of Nevada, or any
---
successor or other agency or authority of the State of Nevada from time to
time having a similar jurisdiction.
"PSC Order" means, at any time, the order by the PSC in effect at
---------
such time that authorizes the Company to enter into this Agreement and the
Related Documents to which it is, or is to be, a party, to request the LC
Bank to issue the Letters of Credit hereunder and to incur Debt to the Banks
hereunder in an amount not less than the Total Commitment. The PSC Order,
when given by PSC, shall be deemed to include the application for such order
by the Company.
"Rating Agency" means S&P or ▇▇▇▇▇'▇.
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"Reimbursement Obligations" means all of the obligations of the
-------------------------
Company to reimburse or repay the LC Bank or the Banks pursuant to Section
2.04 or 2.05.
"Related Documents" has the meaning assigned to that term in
-----------------
Section 2.13.
"Release" means any release, emission, disposal, leaching, or
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migration into the environment (including, without limitation, the
abandonment or disposal of any barrels, containers or other closed
receptacles containing any Hazardous Material), or into or out of any of the
facilities.
"Remarketing Agent" has the meaning assigned to that term in each
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Indenture.
"Required Banks" means, at any time, Banks having Shares equal to
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at least 66 2/3% of the aggregate Shares; provided that such term shall in
any event include the LC Bank unless expressly provided otherwise in this
Agreement.
"Series A Bonds" means the Issuer's $76,750,000 Industrial
--------------
Development Revenue Bonds (Nevada Power Company Project) Series 1995A.
"Series C Bonds" means the Issuer's $44,000,000 Industrial
--------------
Development Refunding Revenue Bonds (Nevada Power Company Project) Series
1995C.
"Series of Bonds" means any of the Series A Bonds or the Series C
---------------
Bonds.
9
"Share" means, with respect to each Bank, the percentage of the
-----
rights and obligations hereunder purchased by, or otherwise attributable to,
such Bank, as specified on Schedule 7.02 hereof or in any assignment entered
into pursuant to Section 7.14(b).
"S&P" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
---
Companies, Inc. and its successors and assigns.
"Stated Amount" has the meaning assigned to such term in each
-------------
Letter of Credit.
"Stated Termination Date" means, with respect to each Letter of
-----------------------
Credit, October 12, 1999, as such date may be extended pursuant to Section
2.11.
"Subsidiary" means, as to any Person, (i) any corporation of which
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more than 50% of the outstanding capital stock having ordinary voting power
to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time capital stock of any other class
or classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned
by such Person or by one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other Person in which such Person
and/or one or more Subsidiaries of such Person has more than a 50% equity
interest at the time.
"Tender Drawing" has the meaning assigned to that term in each
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Letter of Credit.
"Termination Event" means (i) a Reportable Event described in
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Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the PBGC
under such regulations), or (ii) the withdrawal of the Company or any of its
Affiliates from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of
a notice of intent to terminate a Plan or the treatment of a Plan amendment
as a termination under Section 4041 of ERISA, or (iv) the institution of
proceedings to terminate a Plan by the PBGC, or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
"Total Capitalization" means, as of any date of determination, the
--------------------
sum of (a) Total Common Shareholders Equity as of that date, plus (b) the
--- ----
book value of the Preferred Stock as of that date, plus (c) the principal
----
amount as of that date of the Company's Indebtedness for borrowed money
having an initial maturity in excess of one year from the date of its
incurrence.
"Total Common Shareholders Equity" means, as of any date of
--------------------------------
determination, the sum of (a) the book value of the Common Stock of the
---
Company as of that date, determined in accordance with generally accepted
accounting principles, plus (b) the retained earnings of the Company as of
----
that date, determined in accordance with generally accepted accounting
principles, plus (c) the premium on the capital stock of the Company which
----
should, in accordance with generally accepted accounting principles, be
reflected on the balance sheet of the Company as of that date, minus (y) the
-----
book value of treasury stock which should, in accordance with generally
accepted accounting principles, be reflected on the balance sheet of
10
the Company as of that date, and minus (z) the amount of unamortized capital
-----
stock expense which should, in accordance with generally accepted accounting
principles, be reflected on the balance sheet of the Company as of that
date; provided that there shall be excluded from Total Common Shareholders
--------
Equity any amount attributable to Common Stock that is, directly or
indirectly, required to be redeemed or repurchased by the Company at a
specified date or upon the occurrence of specified events or at the election
of the holder thereof.
"Total Debt" means, as of any date of determination, the Company's
----------
Indebtedness for borrowed money on that date, minus the amount of all cash
-----
and securities deposited in trust as security for such Indebtedness with the
lenders thereof on that date.
"Trustee" means the Person serving as Trustee under the Indenture
-------
for each Series of Bonds, initially United States Trust Company of New York.
In the event different Persons are acting as trustee for separate Series of
Bonds, the term "Trustee" shall refer to each such Trustee unless the
context requires otherwise.
SECTION 1.02. Computation of Time Periods. In this Agreement, in
---------------------------
the computation of a period of time from a specified date to a later
specified date, the word "from" means from and including" and the words "to"
and "until" each means "to but excluding."
SECTION 1.03. Accounting Terms. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with generally
accepted United States accounting principles consistent (except as otherwise
stated herein) with those applied in the preparation of the December 31,
1994 financial statements referred to in Section 4.01(f).
SECTION 1.04. Interpretation. The following rules shall apply to
--------------
the construction of this Agreement unless the context requires otherwise:
(a) the singular includes the plural and the plural the singular; (b) words
importing any genderinclude the other gender; (c) references to statutes are
to be construed as including all statutory provisions consolidating,
amending or replacing the statute to which reference is made, and all
regulations adopted and publications promulgated pursuant to such statutes;
(d) references to "writing" include printing, photocopy, typing, lithography
and other means of reproducing words in a tangible visible form; (e) the
words "including", "includes" and "include" shall be deemed to be followed
by the words "without limitation"; (f) except as otherwise provided herein,
references to agreements and other contractual instruments shall be deemed
to include all subsequent amendments and other modifications to such
instruments, but only to the extent that such amendments and other
modifications are permitted or not limited by the terms of this Agreement;
(g) references to Persons include their respective permitted successors and
assigns; and (h) the words "herein," "hereof" and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this Agreement
as a whole and not to any provision of thisAgreement, and "Article,"
"Section," "subsection," "paragraph," and respective references are to this
Agreement unless otherwise specified.
11
ARTICLE II
AMOUNT AND TERMS OF THE LETTERS OF CREDIT
SECTION 2.01. The Letters of Credit. The LC Bank agrees, on the
---------------------
terms and conditions hereinafter set forth, to issue the Letters of Credit
to the Trustee on any Business Day during the period from the date hereof to
and including November 30, 1995 (the "Commitment Termination Date") in the
Initial Stated Amounts thereof and in an aggregate amount not exceeding the
Total Commitment.
SECTION 2.02. Issuing the Letters of Credit. The Letters of
-----------------------------
Credit shall be issued on at least three Business Days' notice from the
Company to the LC Bank specifying the Business Day of issuance thereof. On
such Business Day specified by the Company in such notice (such date, the
"Date of Issuance") and upon fulfillment of the applicable conditions
precedent set forth in Article III, the LC Bank will issue the Letters of
Credit to the Trustee.
SECTION 2.03. Commissions and Fees. (a) The Company hereby
--------------------
agrees to pay to the Administrative Agent for the benefit of the Banks a
letter of credit fee on the Stated Amount of each Letter of Credit from the
Date of Issuance through and including the applicable Cancellation Date of a
Letter of Credit, at the Applicable L/C Rate as adjusted from time to time,
which letter of credit fee shall be payable on the Date of Issuance (for the
period from the date hereof to and including December 31, 1995) and
thereafter quarterly in advance on the last Business Day of each March,
June, September and December commencing on December 31, 1995. In the event
that following the payment by the Company of the letter of credit fee for
any quarterly period (or any part thereof) a Letter of Credit shall be
canceled or otherwise terminate prior to the end of such quarterly period
(or any part thereof), the Banks agree that they will return to the Company
(after applying any such amounts to any unreimbursed drawings under the
Letters of Credit, unpaid Advances, interest thereon or any fees,
commissions or any other amounts then due and payable by the Company to the
Banks) the portion of the letter of credit fee as shall be obtained by
multiplying (i) the total amount of letter of credit fee paid by the Company
to the Banks for such quarterly period (or part thereof) by (ii) the
quotient of (A) the number of days left during such quarterly period (or
part thereof) divided by (B) the total number of days in such quarterly
period (or part thereof). Solely for purposes hereof, the Stated Amount of
a Letter of Credit shall be deemed not to be reduced with respect to any
amount drawn thereunder that is subject to reinstatement.
(b) The Company agrees to pay to the Administrative Agent and the
LC Bank, respectively, the fees and other amounts set forth in the Fee
Letter on the dates set forth therein.
SECTION 2.04. Reimbursement On Demand. Except as otherwise
-----------------------
specified in Section 2.05 (and provided the conditions precedent specified
therein shall have been fulfilled), each amount paid by the LC Bank under a
Letter of Credit (including, without limitation, amounts in respect of any
reinstatement of the Interest Component (as defined in such Letter of
Credit) at the election of the LC Bank notwithstanding any failure by the
Company to reimburse the Banks for any previous drawing to pay interest on
the Bonds) shall constitute a demand loan made by the Banks to the Company
on the date of such payment by the LC Bank under such
12
Letter of Credit. The Company agrees to pay each such demand loan on the
date of its making. Any such demand loan (or any portion thereof) not so
paid on such date shall bear interest, payable on demand, from the date of
making of such demand loan until payment in full, at a fluctuating interest
rate per annum equal to the Default Rate.
SECTION 2.05. Advances and Interest. (a) If the LC Bank shall
---------------------
make any payment under a Letter of Credit upon a Tender Drawing submitted
thereunder pursuant to Section 4.01 of the relevant Indenture and, on the
date of such payment, the conditions precedent set forth in Section 3.03
shall have been fulfilled, the portion of such payment corresponding to
principal on the Bonds shall constitute an advance made by the Banks to the
Company on the date and in the amount of such payment (each such advance
being an "Advance"). The Company shall pay interest on the unpaid principal
amount of each Advance monthly in arrears on the last Business Day of each
month (or, if earlier, the last day of an Interest Period for an Advance),
and on the date of repayment of such Advance. Each Advance shall bear
interest from the date of the incurrence thereof until the date upon which
such Advance is paid in full at the Base Rate unless the Company has elected
to pay interest at the Eurodollar Rate pursuant to subsection (b) below.
Notwithstanding any other provision to the contrary herein, each Advance
shall be due and payable by the Company to the Banks on the earlier of (i)
the Cancellation Date, (ii) the date 180 days from the making of such
Advance, (iii) the date specified in Section 2.06(b) below, and (iv) the
date required by Section 6.02.
(b) The Company may from time to time elect to convert any
Advance to a Eurodollar Rate Advance by notice to the Administrative Agent,
specifying the Advance, the duration of the Interest Period for such
Advance, the amount of such Advance, and the date on which such Advance
shall become a Eurodollar Rate Advance, such notice to be received by the
Administrative Agent by 11:00 A.M. (New York time) at least three Business
Days prior to the effective date of the requested conversion. Such Advance
shall continue to be a Eurodollar Rate Advance, with an Interest Period
of the duration selected by the Company in accordance with the immediately
preceding sentence, determined by the Administrative Agent in accordance
herewith, until the Company shall elect, by written notice to the
Administrative Agent in accordance with the next following sentence, to
convert such Advance to a Base Rate Advance or to convert the Interest
Period for such Advance to an Interest Period of a different duration. Any
such notice to the Administrative Agent requesting a conversion from a
Eurodollar Rate Advance to a Base Rate Advance, or to an Interest Period of
a different duration, shall be given to the Administrative Agent by 11:00
A.M. (New York time) at least three Business Days prior to the effective
date of the requested conversion; provided, however, that conversion of any
-------- -------
Eurodollar Rate Advance shall only be made at the end of the Interest Period
for such Advance. The Company agrees that, unless the Company shall have
requested that a Eurodollar Rate Advance be converted to a Base Rate Advance
or to an Interest Period of a different duration in accordance herewith, the
Eurodollar Rate with respect to such Advance shall be determined each
Business Day or each month by the Administrative Agent, as the case may be,
with respect to such Advance.
(c) Notwithstanding any provision to the contrary herein, the
Company shall pay interest on all past-due amounts of principal and (to the
fullest extent permitted by law) interest,
13
costs, fees and expenses hereunder, from the date when such amounts became
due until paid in full, payable on demand, at the default Rate in effect
from time to time.
SECTION 2.06. Prepayments. (a) The Company may, upon at least
-----------
two Business Days' notice to the Administrative Agent, prepay the
outstanding amount of any Advance in whole or in part with accrued interest
to the date of such prepayment on the amount prepaid.
(b) Prior to or simultaneously with the resale of all of the Bonds
purchased with the proceeds of a Tender Drawing under a Letter of Credit,
the Company shall prepay or cause to be prepaid in full the then outstanding
principal amount (pursuant to Section 2.04) or Advance arising pursuant to
such Tender Drawing, together with all interest thereon to the date of such
prepayment. If less than all of such Bonds are resold, then prior to or
simultaneously with such resale the Company shall prepay or cause to be
prepaid a portion (as specified below) of the then outstanding principal
amount (pursuant to Section 2.04) or Advance arising pursuant to such Tender
Drawing, together with all interest thereon to the date of such prepayment.
The portion of such principal amount or such Advance to be prepaid shall be
determined by multiplying such principal amount or such Advance by a
fraction, the numerator of which shall be the principal amount of the Bonds
resold and the denominator of which shall be the principal amount of all of
the Bonds purchased with the proceeds of the relevant Tender Drawing.
SECTION 2.07. Increased Costs. (a) If either (i) the introduction
---------------
of or any change (including, without limitation, any change by way of
imposition or increase of reserve requirements) in or in the interpretation
of any Law or (ii) the compliance by any Bank with any guideline or request
from any central bank or other Governmental Agency (whether or not having
the force of law), shall either (A) impose, modify or deem applicable any
reserve, special deposit or similar requirement against letters of credit
issued by, or assets held by, or deposits in or for the account of, such
Bank or participated in by any Participant or (B) impose on any Bank any
other condition regarding this Agreement, the Letters of Credit, any amount
outstanding hereunder or any Advance, and the result of any event referred
to in clause (A) or (B), above, shall be to increase the cost to any Bank or
any Participant of issuing or maintaining the Letters of Credit (or its
participation therein) or agreeing to make or making, funding or maintaining
any Advance, then, upon demand by the Administrative Agent on behalf of a
Bank, the Company shall pay to such Bank (for its own account or for the
account of such Participant, as the case may be, within 10 days of receipt
of such notice and from time to time as specified by the Bank, all
additional amounts which shall be sufficient to compensate such Bank for
such increased costs. A certificate setting forth such increased costs
incurred by the Bank as a result of any event referred to in clause (i) or
(ii) above, submitted by the Administrative Agent to the Company on behalf
of such Bank, shall constitute such demand and shall, in the absence of
manifest error, be conclusive and binding for all purposes.
(b) In the event that after the date hereof the implementation of
or any change in any Law, or any guideline or directive (whether or not
having the force of law) or the interpretation or administration thereof, in
each case by any administrative or governmental authority charged with the
administration thereof shall:
14
(i) subject any Bank or any Participant to any tax of any
kind with respect to this Agreement, the Advances or the transactions
contemplated hereby or shall change the basis of taxation of any Bank
or any Participant (other than a change in the rate of tax on the
overall net income of such Bank); or
(ii) impose, modify or deem applicable any reserve, special
deposit, capital adequacy or similar requirement (other than any change
by way of imposition on increase of reserve requirements included in
the Eurodollar Rate Reserve Percentage); or
(iii) impose on the Banks any other condition;
and as a result of any of the foregoing, in the sole opinion of any Bank,
there shall be any increase in the cost to such Bank of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances, then the Company
shall from time to time, upon demand by such Bank or such Participant, pay
to the Bank or such Participant additional amounts sufficient to compensate
the Bank or such Participant for such increased cost. A certificate as to
the amount of such increased cost, submitted to the Company by the
Administrative Agent on behalf of such Bank or such Participant, as the case
may be, shall be conclusive and binding for all purposes.
SECTION 2.08. Increased Capital. If any Bank determines that (1)
-----------------
the adoption of any applicable Law, after the date hereof regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any court or Governmental Agency charged with the
interpretation or administration thereof, or (2) compliance by such Bank
with any directive regarding capital adequacy of any such Governmental
Agency, generally affects banks issuing letters of credit or entering into
agreements similar to or of the same type as this Agreement and has or would
have the effect of reducing the rate of return on such Bank's capital as a
consequence of issuing or maintaining the Letters of Credit (or its
participation therein) to a level below that which the Bank would have
achieved but for such adoption, change or compliance (taking into
consideration the Bank's policies with respect to capital adequacy), then,
upon demand by the Administrative Agent on behalf of such Bank, the Company
shall immediately pay to such Bank, from time to time as specified by the
Bank, additional amounts sufficient to compensate such Bank in the light of
such circumstances, to the extent that the Bank reasonably determined such
capital to be allocable to this Agreement or the issuance or maintenance of
the Letters of Credit (or its participation therein). In determining such
increased fee, the Banks may use reasonable and customary averaging and
attribution methods. A certificate as to such amounts submitted to the
Company by the Administrative Agent on behalf of such Bank shall constitute
such demand and shall, in the absence of manifest error, be conclusive and
binding for all purposes.
SECTION 2.09. Payments and Computations. The Company shall make
-------------------------
each payment hereunder not later than 3:00 p.m. (New York time) on the day
when due in lawful money of the United States of America to the
Administrative Agent on behalf of the Banks (i) at its address referred to
in Section 7.02 in same day funds or (ii) by federal funds transfer to the
Administrative Agent's ABA Account No. ▇▇▇-▇▇▇-▇▇▇ at the Federal Reserve
Bank of New York for credit to CLAD Control Account, Account No. 050-019014,
referencing Nevada Power
15
Company Letters of Credit. Computations of the Base Rate, the Eurodollar
Rate, the Default Rate and the commissions and fees under Section 2.03 shall
be made by the Administrative Agent on the basis of a year of 360 days and
the actual number of days (including the first day but excluding the last
day) elapsed. To the extent the Company has made any payments to the
Administrative Agent on behalf of the Banks, such payment shall be deemed to
have been made to the Banks by the Company for purposes of this Agreement.
SECTION 2.10. Non-Business Days. Whenever any payment to be made
-----------------
hereunder shall be stated to be due on a day which is not 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
interest, commission or fee, as the case may be.
SECTION 2.11. Extension of the Stated Termination Date. Unless a
----------------------------------------
Letter of Credit shall have expired in accordance with its terms on the
Cancellation Date, at least 75 but not more than 120 days before each
anniversary of the Date of Issuance of such Letter of Credit, commencing on
the anniversary thereof in 1996, the Company may, by notice to the
Administrative Agent, request the Banks in writing (each such request being
irrevocable) to extend for one year the Stated Termination Date of such
Letter of Credit. If the Company shall make such request, the Administrative
Agent shall, no later than 30 days following the date on which the
Administrative Agent shall have received such request, notify the Company in
writing (with a copy of such notice to the Trustee) whether or not all of
the Banks consent to such request and, if all of the Banks do so consent,
the conditions of such consent (including conditions relating to legal
documentation). If the Administrative Agent shall not so notify the Company,
the Banks shall be deemed not to have consented to such request. In
connection with such extension, the Banks may at their option do or require
any of the following: (a) issue an amendment to such Letter of Credit to the
Trustee reflecting the extension of the scheduled expiration date, (b) cause
the Company to cause the Trustee to return the Letter of Credit to the LC
Bank and thereafter (i) the LC Bank shall return the Letter of Credit after
amendment thereof to reflect the extension of the scheduled expiration date
or (ii) cancel the Letter of Credit and issue to the Trustee, in
substitution therefor, a substitute irrevocable letter of credit in the form
of Exhibit A hereto, dated the date of such surrender, reflecting the
extension of the scheduled expiration date but otherwise having terms
substantially identical to the Letter of Credit being so extended.
SECTION 2.12. Evidence of Debt. Each Bank shall maintain, in
----------------
accordance with its usual practice, an account or accounts evidencing the
indebtedness of the Company resulting from each drawing under a Letter of
Credit and from each Advance made from time to time hereunder and its
respective Share of the Reimbursement Obligations and the amounts of
principal and interest payable and paid from time to time hereunder . In any
dispute, legal action or proceeding in respect of this Agreement, the
entries made in such account or accounts shall, in the absence of manifest
error, be conclusive evidence of the existence and amounts of the
obligations of the Company therein recorded.
SECTION 2.13. Obligations Absolute. The payment obligations of
--------------------
the Company under this Agreement shall be unconditional and irrevocable, and
shall be paid strictly
16
in accordance with the terms of this Agreement under all circumstances,
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any of the
Letters of Credit, the Bonds, the Indentures, the Financing Agreements,
the Custodian Agreement, the Fee Letter or any Bond Purchase Agreement
(collectively, the "Related Documents") or any other agreement or
instrument relating thereto;
(ii) any amendment or waiver of or any consent to or departure
from all or any of the Related Documents;
(iii) the existence of any claim, set-off, defense or other right
which the Company may have at any time against the Trustee or any other
beneficiary, or any transferee, of a Letter of Credit (or any Person
for whom the Trustee, any such beneficiary or any such transferee may
be acting), the Banks, or any other Person, whether in connection with
this Agreement, the transactions contemplated herein or in the Related
Documents, or any unrelated transaction;
(iv) any statement or any other document presented under a
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 by the LC Bank under a Letter of Credit 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 2.14. Taxes. All payments made by the Company hereunder
-----
will be made without setoff, counterclaim or other defense. All such
payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by
any jurisdiction or by any political subdivision or taxing authority thereof
or therein (but excluding, except as provided below, any tax imposed on or
measured by the net income of any of the Banks pursuant to the laws of the
jurisdiction (or any political subdivision or taxing authority thereof or
therein) in which the principal office or lending office of a Bank is
located ) and all interest, penalties or similar liabilities with respect
thereto (collectively, "Taxes"). If the Company shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under
the Fee Letter, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.14) each Bank receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Company shall make all such required deductions and shall pay
the full amount deducted to the relevant taxing authority in accordance with
applicable law and (iii) the Company will furnish to the Banks within 45
days after the date the payment of any Taxes is due certified copies of tax
receipts evidencing such payment by the Company. The Company will indemnify
and hold harmless each Bank, and reimburse any Bank upon written
17
request of the Administrative Agent on behalf of such Bank the amount of any
Taxes so levied or imposed and paid by any Bank. Each Bank represents and
warrants to the Company that either (1) it is entitled to the benefits of an
income tax treaty with the United States which provides for an exemption
from United States withholding tax on interest and other payments to be made
by the Company to the Banks pursuant to the terms of this Agreement; or (2)
all interest and other payments to be made by the Company to such Bank
pursuant to the terms of this Agreement will be effectively connected with
the conduct by the Bank of a trade or business within the United States
(within the meaning of Section 882 of the Code). Prior to the Date of
Issuance and thereafter upon the request of the Company, each Bank agrees to
furnish to the Company two copies of either U.S. Internal Revenue Service
Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein the Bank
claims entitlement to complete exemption from U.S. federal withholding tax
on all interest and other payments hereunder). In the event a Bank fails to
provide an accurate Form 4224 or Form 1001 as required by this paragraph and
which it is legally entitled to provide, the Company shall not be required
to pay any additional amounts with respect to U.S. Federal income taxes to
such Bank pursuant to this paragraph. Notwithstanding any other provisions
of this Agreement and except in the event of a change in applicable law, the
representations, warranties and obligations of the Bank set forth in this
paragraph in respect of any interest in this Agreement or the Letters of
Credit shall survive until the assignment, sale, payment or other
disposition of such interest or the Letters of Credit.
SECTION 2.15. Additional Interest. The Company shall pay to the
-------------------
Administrative Agent on behalf of any Bank during each Interest Period for a
Eurodollar Rate Advance, so long as such Bank shall be required under
regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on each Eurodollar
Rate Advance, from the first day of such Interest Period until paid in full
or the last day of such Interest Period, at an interest rate per annum equal
at all times to the difference obtained by subtracting (i) the Eurodollar
Rate in effect for such Interest Period from (ii) the rate obtained by
dividing such Eurodollar Rate by a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period, payable on each
date on which interest is payable on such Eurodollar Rate Advance. Such
additional interest shall be determined by the Bank and notified to the
Administrative Agent, which shall forward such notice to the Company and
such determination shall be binding and conclusive, absent manifest error.
SECTION 2.16. Funding Indemnity. The Company agrees to indemnify
-----------------
and hold harmless each Bank from any loss or expense which it may sustain or
incur as a result of:
(i) the failure by the Company to borrow or prepay an
Advance bearing interest at the Eurodollar Rate after giving notice of
its intention to do so pursuant to Section 2.06;
(ii) the failure by the Company to pay the principal of or
interest on any Eurodollar Rate Advance when due (whether at stated
maturity, upon acceleration or otherwise); or
18
(iii) the conversion, prepayment or repayment of any
Eurodollar Rate Advance on a date that results in breakage or similar
costs to the Bank;
including but not limited to any such loss or expense arising from interest,
fees or other amounts payable by the Bank to lenders of funds obtained by it
in order to make and maintain the Advances thereunder. A certificate setting
forth such loss or expense submitted by the Bank to the Administrative Agent
and the Company shall be conclusive and binding as to the amount owed such
Bank.
SECTION 2.17. Illegality, etc. If the adoption of any Law, or
---------------
any change therein, or any change in the interpretation or administration
thereof by any Governmental Agency, or compliance by any Bank with any
request or directive (whether or not having the force of law) of any such
Governmental Agency, shall make it, in the sole opinion of the Required
Banks, unlawful for the Required Banks to obtain funds in the London
interbank Eurodollar market to make, maintain or fund Eurodollar Rate
Advances, or if, as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the London interbank
Eurodollar market it shall become impracticable, in the sole judgment of the
Required Banks, for the Required Banks to obtain funds in the London
interbank Eurodollar market to make, maintain or fund Eurodollar Rate
Advances or otherwise to perform its obligations hereunder with respect to
any Eurodollar Rate Advance, the Required Banks shall immediately notify the
Administrative Agent and the Administrative Agent shall immediately so
notify the Company, but the failure of the Administrative Agent to give such
notice shall not affect the terms of this Section 2.17. Upon receipt of
such notice, (i) the right of the Company to select for any Advance the
Eurodollar Rate shall forthwith be canceled, such cancellation to continue
unless and until the Administrative Agent shall notify the Company that it
has determined that it is no longer unlawful or impracticable for the Banks
to make, maintain or fund Eurodollar Rate Advances and (ii) outstanding or
requested Eurodollar Rate Advances shall be converted automatically into or
made as, Base Rate Advances. The Company hereby agrees to pay to the
Administrative Agent on behalf of any Bank upon demand of such Bank, any
additional amounts necessary to compensate such Bank for any loss, cost or
expense incurred by the Bank in connection with any Eurodollar Rate Advance
as a result of any such illegality. A certificate setting forth such cost,
loss or expense submitted by the Bank to the Administrative Agent and the
Company shall constitute such demand and shall be conclusive and binding.
SECTION 2.18. Reinstatement of Letter of Credit. The consent of
---------------------------------
the Banks shall not be required with respect to the automatic reinstatement
of the Interest Component of a Letter of Credit resulting from a drawing
under the Letter of Credit to pay interest on the Bonds (an "Interest
Drawing"), except as provided in this Section 2.18. If the Company has not
reimbursed the Banks in full for such Interest Payment by making payment to
the Administrative Agent within five Business Days after an Interest
Drawing, the Administrative Agent shall notify the Banks to such effect.
Unless an Event of Default shall have been declared pursuant to Section
6.02, on the fifteenth calendar day after such Interest Drawing, or if such
day will not be a Business Day, on the immediately preceding Business Day,
the LC Bank shall deliver to the Trustee a written notice stating that the
Banks have not been reimbursed for such drawing and that the Interest
Component will not be reinstated, unless either (A) the Administrative Agent
has
19
received the necessary reimbursement payment by such fifteenth calendar day
(or preceding Business Day, as the case may be) or (B) all of the Banks have
in their respective sole discretion agreed that such notice shall not be
sent and that the Interest Component shall consequently be allowed to
automatically reinstate.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Condition Precedent to Issuance of the Letters of
----------------------------------------------------
Credit. The obligation of the LC Bank to issue the Letters of Credit is
------
subject to the conditions precedent that the Administrative Agent (in
sufficient copies for each Bank) shall have received the following on or
before the Date of the Issuance, each dated such date, in form and substance
satisfactory to the Banks:
(a) A copy of the Custodian Agreement, duly executed by the
Company and the Trustee.
(b) A copy of each Indenture, in each case duly executed by the
Issuer and the Trustee.
(c) A copy of each Financing Agreement, in each case duly
executed by the Issuer and the Company.
(d) A copy of each Bond Purchase Agreement and Remarketing
Agreement, in each case duly executed by all parties thereto.
(e) Certified copies of the resolutions of the Board of Directors
of the Company approving this Agreement, the Letters of Credit and the
Custodian Agreement and the transactions contemplated hereby and thereby,
and of all other documents evidencing any other necessary corporate action.
(f) An original (or a duplicate copy certified by the Company in
a manner satisfactory to the Administrative Agent to be a true copy) of the
application filed by the Company for the PSC Order and of each governmental
action and regulatory approval (including, without limitation, the PSC Order
and approvals or orders of the Issuer and the PSC) necessary for the Company
to enter into this Agreement, the Letters of Credit and the Custodian
Agreement and for the transactions contemplated hereby and thereby.
(g) A certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers of the
Company authorized to sign this Agreement and the other documents to be
delivered by it hereunder.
(h) A letter from ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, Bond Counsel, addressed to
the Banks and stating therein that the Banks may rely on the opinions of
such firm delivered in connection with the transactions contemplated hereby.
20
(i) A letter from Best, Best & ▇▇▇▇▇▇▇, Special Counsel to the
Company, addressed to the Administrative Agent and to each of the Banks and
stating therein that the Banks may rely on the opinion of such firm
delivered pursuant to Section 6(a)(i) of each Bond Purchase Agreement.
(j) A letter from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel to
the Company, addressed to the Administrative Agent and to each of the Banks
and stating therein that the Banks may rely on his opinion delivered
pursuant to Section 6(a)(i) of each Bond Purchase Agreement.
(k) An opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel to
the Company, in substantially the form of Exhibit C hereto and as to such
other matters as the Banks may reasonably request.
(l) An opinion of Best, Best & ▇▇▇▇▇▇▇, Special Counsel to the
Company, in substantially the form of Exhibit D hereto and as to such other
matters as the Banks may reasonably request.
(m) Receipt by the Administrative Agent from the Company of (i)
an executed copy of the Fee Letter and the fees provided for in the Fee
Letter which by its terms are due and payable on or prior to the Date of
Issuance, (ii) the letter of credit fee payable for the period from the Date
of Issuance to December 31, 1995 and (iii) receipt by counsel to the Letter
of Credit Bank of their fees and expenses incurred to date on behalf of the
Administrative Agent and Letter of Credit Bank in connection with the
negotiation and drafting of this Agreement and the Related Documents;
provided that the fees of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, New York counsel to the
Administrative Agent, will not exceed $17,500, plus disbursements.
(n) Receipt by the Administrative Agent of a letter from ▇▇▇▇▇'▇
or S&P assigning the rating of the LC Bank to the Bonds.
SECTION 3.02. Additional Conditions Precedent to Issuance of the
---------------------------------------------------
Letters of Credit. The obligation of the LC Bank to issue the Letters of
-----------------
Credit shall be subject to the further conditions precedent that on the Date
of Issuance:
(a) The following statements shall be true and the Administrative
Agent shall have received a certificate signed by an Authorized
Representative of the Company, dated the Date of Issuance, stating that:
(i) The representations and warranties contained in
Section 4.01 of this Agreement are true and correct on and as of
the Date of Issuance as though made on and as of such date;
(ii) No event has occurred and is continuing, or would
result from the issuance of the Letters of Credit, which
constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time
elapse, or both; and
21
(iii) No material adverse change in the financial condition,
business, prospects or operations of the Company shall have
occurred since June 30, 1995;
(b) All legal matters incident to this Agreement and the Related
Documents shall be reasonably satisfactory to counsel for the Administrative
Agent;
(c) There shall have been no introduction of or change in or in
the interpretation of any Law that would make it unlawful or unduly
burdensome for the LC Bank to issue the Letters of Credit, no outbreak or
escalation of hostilities or other calamity or crisis, no suspension of or
material limitation on trading on the New York Stock Exchange or any other
national securities exchange, no declaration of a general banking moratorium
by United States, New York or United Kingdom banking authorities, and no
establishment of any new restrictions on transactions in securities or on
banks materially affecting the free market for securities or the extension
of credit by banks; and
(d) The Banks shall have received such other approvals, opinions
or documents as the Banks may reasonably request.
SECTION 3.03. Conditions Precedent to Each Advance. The obligation
------------------------------------
of the Banks to make each Advance shall be subject to the conditions
precedent that, on the date of such Advance, the following statements shall
be true:
(a) The representations and warranties contained in Section 4.01
of this Agreement are true and correct on and as of the date of such Advance
as though made on and as of such date; and
(b) No event has occurred and is continuing, or would result from
such Advance, which constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time
elapse, or both.
Unless the Company shall have previously advised the Administrative
Agent in writing that one or more of the statements contained in clauses (a)
and (b) above is not true or will not be true on the date of such Advance,
the Company shall be deemed to have represented and warranted, on and as of
the date of such Advance, that the above statements are true.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Company. The
---------------------------------------------
Company hereby represents and warrants, as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Nevada and is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state in which the ownership
22
of its Property and the conduct of its business makes such qualification
necessary. The Company has all requisite power and authority to conduct
its business as presently conducted and to own its Property.
(b) The execution, delivery and performance by the Company of
this Agreement and the Related Documents to which it is or is to be a party
are within the Company's corporate powers, have been duly authorized by all
necessary corporate action and do not contravene (i) the Company's charter
or by-laws or (ii) any Law, order, writ, judgment or similar restriction
(including, without limitation, any order, rule or regulation of the PSC) or
any contractual restriction binding on or affecting the Company, and do not
result in or require the creation of any Lien (except as may be created
under the Related Documents) upon or with respect to any of its Property.
(c) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Agency is required for the due
execution, delivery and performance by the Company of this Agreement or any
Related Document to which the Company is or is to be a party, except for the
PSC Order, which, on the Date of the Issuance, has been duly obtained, is
final and in full force and effect and has not been, is not and will not be
the subject of appeal or reconsideration or other review.
(d) This Agreement is, and the Related Documents to which the
Company is a party are, legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms.
Each of the Related Documents to which the Company is a party is in full
force and effect and no party to such agreements has contested or challenged
the validity or enforceability thereof or refused to perform its obligations
thereunder.
(e) The Bonds have been duly authorized, authenticated and issued
and delivered, and are the legal, valid and binding obligations of the
Issuer. All payments of principal and interest on the Prior Bonds have been
made on the due dates thereof and no Prior Bonds are in default.
(f) The balance sheet (including the notes thereto) of the
Company as at December 31, 1994 and the related statements of income and
retained earnings of the Company for the fiscal year then ended, certified
by Deloitte & Touche independent public accountants, in each case as set
forth in the annual report of the Company contained in the Company's
December 31, 1994 Report on Form 10-K as filed with the Securities and
Exchange Commission, a copy of which has been furnished to each Bank, fairly
present the financial condition of the Company as at such date and the
results of the operations of the Company for the period ended on such date,
all in accordance with generally accepted accounting principles consistently
applied, and since December 31, 1994, there has been no material adverse
change in the Company's financial condition, results of operations,
business, properties, operations or prospects.
(g) Except as disclosed in the Company's December 31, 1994 Report
on Form 10-K as filed with the Securities and Exchange Commission, there is
no pending or threatened action or proceeding affecting the Company or any
of its Subsidiariesbefore any
23
court, governmental agency or arbitrator, which is likely to have a Material
Adverse Effect on the financial condition, results of operations, business,
properties, operations or prospects of the Company and its Subsidiaries,
taken as a whole, and there has occurred no material adverse developments in
any such action or proceeding so disclosed.
(h) No proceeds of any drawing under any Letter of Credit will be
used to acquire any security in any transaction which is subject to Section
13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) The Company is not engaged in the business of extending
credit for the purpose of buying or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any drawing under any Letter of Credit
will be used to buy or carry any margin stock or to extend credit to others
for the purpose of buying or carrying any margin stock.
(j) No Termination Event has occurred nor is reasonably expected
to occur with respect to any Plan.
(k) Schedule B (Actuarial Information) to the 1994 annual report
(Form 5500 Series) of the Company with respect to each Plan, copies of which
have been filed with the Internal Revenue Service and furnished to the
Banks, is complete and accurate and fairly presents the funding status of
such Plan, and since the date of such Schedule B there has been no material
adverse change in such funding status.
(l) Neither the Company nor any of its Affiliates has incurred,
or reasonably expects to incur, any withdrawal liability under ERISA to any
Multiemployer Plan.
(m) Neither the Company nor any of its Affiliates has incurred or
reasonably expects to incur material liability under Title IV of ERISA or
pursuant to Section 406, 409, 502(i), 502(l) or 515 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code.
(n) The Company and each Subsidiary have filed all tax returns
(Federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties, other than such taxes
that the Company or its Subsidiary is contesting in good faith and by
appropriate legal proceedings and for which adequate reserves have been set
aside on the books of the Company or such Subsidiary in accordance with
generally accepted accounting principles.
(o) Neither the Company nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument which would have a Material Adverse Effect on the ability of the
Company to perform its obligations under this Agreement or any of the
Related Documents to which it is, or is to be, a party.
(p) Except for information describing the LC Bank contained in
the Preliminary Official Statement, the Official Statement or any other
offering document relating to the Bonds, as to which no representation is
made, such Official Statement, such Preliminary Official
24
Statement and such other offering document was, and any supplement or
amendment thereof shall be, accurate in all material respects for the
purposes for which its use was or shall be authorized; and such Official
Statement, Preliminary Official Statement and such other offering document
as of its date did not, and any such supplement or amendment shall not,
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(q) Environmental Compliance. Except as set forth in Schedule
------------------------
4.01(q) hereto:
(1) the operations of the Company and of each of its
Subsidiaries (including, without limitation, all operations
and conditions at or in the facilities currently used by the
Company and its Subsidiaries) comply in all material respects
with all Environmental Laws;
(2) neither the Company nor any of its Subsidiaries has
received (A) any notice or claim to the effect that it is or
may be liable to any person as a result of the Release or
threatened Release of any Hazardous Material or (B) any
letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Subsection 9604) or comparable state
laws, and to the best of the Company's knowledge, none of the
operations of the Company or any of its Subsidiaries is the
subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a Release
or threatened Release of any Hazardous Material at any
facility or at any other location;
(3) the Company and each of its Subsidiaries and all of
their respective facilities or operations are not subject to
any outstanding written order or agreement with any
governmental authority or private party respecting (A) any
Environmental Law or (B) any Environmental Claim;
(4) neither the Company nor any of its Subsidiaries has
any contingent obligation in connection with any Release of
any Hazardous Material by the Company or any of its
Subsidiaries;
(5) except in the ordinary course of its business and in
compliance with all Environmental Laws, neither the Company
nor any of its Subsidiaries nor any predecessor of the
Company or any of its Subsidiaries has filed any notice under
any Environmental Law indicating past or present treatment or
disposal of any Hazardous Material at any facility, and none
of the Company's or any of its Subsidiaries' operations
involves the generation, transportation, treatment, storage
or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent or of any other
Hazardous Material;
25
(6) no Hazardous Material exists on, under or around any
facility in a manner that could give rise to an Environmental
Claim resulting in a material adverse effect on the financial
condition or operations of the Company, and neither the
Company nor any of its Subsidiaries has filed any notice or
report of a Release of any Hazardous Materials that could
give rise to an Environmental Claim resulting in a Material
Adverse Effect on the financial condition or operations of
the Company;
(7) neither the Company nor any of its Subsidiaries (nor
any of their respective predecessors) has disposed of any
Hazardous Material in a manner that may give rise to an
Environmental Claim resulting in a Material Adverse Effect on
the financial condition or operations of the Company; and
(8) neither the Company nor any of its Subsidiaries
maintains any underground storage tanks or surface
impoundments in a manner that may give rise to an
Environmental Claim resulting in a Material Adverse Effect on
the financial condition or operations of the Company.
(r) The representations and warranties contained in Article IV of
the Principal Facility are true and correct in all material respects as if
made on the date hereof.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Affirmative Covenants. So long as(i) the Commitment
---------------------
Termination Date has not yet occurred, (ii) any drawing is available under a
Letter of Credit, or (iii) the Company shall have any obligation to pay any
amount to the Banks hereunder, the Company will, unless the Required Banks
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
-------------------------
Subsidiaries to comply, in all material respects, with all applicable Laws,
such compliance to include, without limitation, paying before the same
become delinquent all taxes, assessments and governmental charges imposed
upon it or upon its Property, except to the extent that any such non-
compliance would not, individually or in the aggregate, have a Material
Adverse Effect on the financial condition, results of operations,
operations, business or credit of the Company or its ability to perform its
obligations hereunder or under any Related Document to which it is or is to
be a party.
(b) Visitation Rights. At any reasonable time and from time to
-----------------
time, permit the Administrative Agent or the LC Bank or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the Property of, the Company and
any of its Subsidiaries, and to discuss the affairs, finances and accounts
of the
26
Company and any of its Subsidiaries, with any of their respective officers
or directors or with the independent auditors of the Company.
(c) [Intentionally Omitted]
(d) [Intentionally Omitted]
(e) Reporting Requirements. Furnish to the Administrative Agent
----------------------
(with sufficient copies for each Bank) the following:
(i) as soon as possible and in any event within five
Business Days after the occurrence of each Event of Default and
each event which, with the giving of notice, lapse of time, or
both, would constitute any such Event of Default, the statement of
an Authorized Representative of the Company setting forth details
of such Event of Default or event and the action which the Company
has taken and proposes to take with respect thereto;
(ii) as soon as available and in any event within 45 days
after the close of each of the first three Fiscal Quarters in each
Fiscal Year of the Company:
(A) an unaudited balance sheet of the Company as at
the end of such quarter and statements of income and retained
earnings of the Company for the period commencing at the end
of the previous Fiscal Year and ending with the end of such
quarter, fairly presenting the financial condition of the
Company as at such date and the results of operations of the
Company for such period and setting forth in each case in
comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in
reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer (or the
designee of such officer) of the Company as having been
prepared in accordance with generally accepted accounting
principles consistently applied (it being understood and
agreed that the delivery by the Company to the Administrative
Agent within such 45-day period of the Company's Quarterly
Report on Form 10-Q for such quarter, as filed with the
Securities and Exchange Commission, containing such balance
sheet and statements shall be deemed to satisfy the
requirements of this subparagraph (A)); and
(B)a certificate of the chief financial officer (or
the designee of such officer) of the Company setting forth
the calculation of the ratios contemplated by this Agreement,
as of the date of the most recent financial statements
accompanying such certificate, to show the Company's
compliance with or the status of the financial covenants,
agreements, representations and warranties contained herein,
and a certificate of such officer (or such designee) stating
whether he or she has any knowledge of
27
the occurrence at any time prior to the date of such
certificate of any Event of Default not previously reported
pursuant to the provisions of paragraph (i) of this
subsection (e), or of the occurrence at any time prior to
such date of any event, except events previously reported
pursuant to the provisions of paragraph (i) of this
subsection (e) and remedied, which, with notice or lapse of
time, or both, would constitute an Event of Default and, if
so, setting forth the details of such Event of Default or
event and the action which the Company has taken and proposes
to take with respect thereto;
(iii) (A) as soon as available and in any event within 90
days after the end of each Fiscal Year of the Company, a copy of
the annual report for such year for the Company, containing
financial statements for such year certified in a manner
acceptable to the Required Banks by Deloitte & Touche or other
independent public accountants acceptable to the Required Banks
(it being understood and agreed that the delivery by the Company
to the Administrative Agent within such 90-day period of the
Company's Annual Report on Form 10-K for such year, as filed with
the Securities and Exchange Commission, containing such financial
statements shall be deemed to satisfy the requirements of this
subparagraph (A)), and (B) a certificate of the chief financial
officer (or the designee of such officer) of the Company setting
forth the calculation of the ratios contemplated by this
Agreement, as of the date of the most recent financial statements
accompanying such certificate, to show the Company's compliance
with or the status of the financial covenants, agreements,
representations and warranties contained herein, and a certificate
of such officer (or such designee) stating whether he or she has
any knowledge of the occurrence at any time prior to the date of
such certificate of any Event of Default not previously reported
pursuant to the provisions of paragraph (i) of this subsection
(e), or of the occurrence at any time prior to such date of any
such event, except events previously reported pursuant to the
provisions of paragraph (i) of this subsection (e) and remedied,
which, with notice or lapse of time, or both, would constitute an
Event of Default and, if so, setting forth the details of such
Event of Default or event and the action which the Company has
taken and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof, copies
of all reports which the Company or any Subsidiary files with the
Securities and Exchange Commission or any national securities
exchange;
(v) as soon as possible and in any event (i) within 30
days after the Company or any Affiliate knows or has reason to
know that any Termination Event described in clause (i) of the
definition of Termination Event with respect to any Plan has
occurred and (ii) within ten days after the Company or any
Affiliate knows or has reason to know that any other Termination
Event with respect to any Plan has occurred, a statement of the
chief financial officer (or the
28
designee of such officer) of the Company describing such
Termination Event and the action, if any, which the Company or
such Affiliate proposes to take with respect thereto;
(vi) promptly and in any event within two Business Days
after receipt thereof by the Company or any Affiliate from the
PBGC, copies of each notice received by the Company or any such
Affiliate concerning the PBGC's possible intention to terminate
any Plan or to have a trustee appointed to administer any Plan;
(vii) promptly and in any event within ten Business Days
after the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Plan which is a pension
plan (other than a Multiemployer Plan) maintained or contributed
to for employees of the Company or any Affiliate, which provides
payments at, or defers receipt of payment until, retirement and is
subject to Title IV of ERISA;
(viii) promptly and in any event within ten Business Days
after receipt thereof by the Company or any Affiliate from a
Multiemployer Plan sponsor, a copy of each notice received by the
Company or any Affiliate concerning (A) the imposition of
withdrawal liability by a Multiemployer Plan pursuant to Section
4202 of ERISA, (B) the determination that a Multiemployer Plan is,
or is expected to be, in reorganization within the meaning of
Title IV of ERISA, (C) the termination of a Multiemployer Plan
within the meaning of Title IV of ERISA, or (D) the amount of
liability incurred, or expected to be incurred, by the Company or
any Affiliate in connection with any event described in clause
(A), (B) or (C), above;
(ix) promptly and in any event within two Business Days
after the Company or any Affiliate knows or has reason to know
that it has incurred or could reasonably expect to incur material
liability under Title IV of ERISA or pursuant to Section 406, 409,
502(i), 502(1) or 515 of ERISA or Section 401(a)(29), 4971 or 4975
of the Code; and
(x) such other information respecting the condition or
operations, financial or otherwise, of the Company or any of its
Subsidiaries as the Administrative Agent or the LC Bank may from
time to time reasonably request.
(f) Maintenance of Insurance. Maintain, and cause each of its
------------------------
Subsidiaries to maintain, insurance (subject to customary deductibles and
retentions) with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried
by companies engaged in similar businesses and owning similar properties in
the same general areas in which the Company or such Subsidiary operates and,
upon the written request of the Administrative Agent at the request of a
Bank, (1) deliver to the Administrative Agent on behalf of such Bank a
certificate of an Authorized Representative of the Company
29
specifying the details of such insurance in effect or (2) cause its
insurance agent to deliver to the Administrative Agent a certificate
specifying the details of such insurance in effect.
(g) Preservation of Corporate Existence, Etc. Except to the
------------------------------------------
extent not prohibited by Section 5.02(c), preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence,
rights (charter and statutory), franchises and, to the extent required in
connection with its operations, foreign qualifications.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries
----------------
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Company and each of its Subsidiaries in accordance with
generally accepted accounting principles consistently applied.
(i) Maintenance of Properties, Etc. Maintain and preserve, and
-------------------------------
cause each of its Subsidiaries to maintain and preserve, all of its Property
which is used or useful in the conduct of its business in good working order
and condition, ordinary wear and tear excepted.
(j) Performance and Compliance with Other Covenants. Perform and
-----------------------------------------------
comply with each of the covenants to be performed by the Company, as set
forth in Articles II, III, IV, V, VI and VII of each Financing Agreement,
without giving effect to any subsequent amendment, modification or
termination thereof after the date hereof, unless such amendment,
modification, or termination was consented to by the Required Banks.
(k) Accounting Method. Continue to account for its Subsidiaries
-----------------
according to the equity method of accounting.
SECTION 5.02. Negative Covenants. So long as (i) the Commitment
------------------
Termination Date has not yet occurred, (ii) any drawing is available under a
Letter of Credit, or (iii) the Company shall have any obligation to pay any
amount to the Banks hereunder, the Company will not, and will not permit any
of its Subsidiaries to, without the written consent of the Required Banks:
(a) [Intentionally Omitted]
(b) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
---------------------
dispose of, directly or indirectly, whether in one transaction or in a
series of transactions, all or any substantial part of the assets of the
Company or any of its Subsidiaries, including, without limitation, all or
substantially all assets constituting the business of a division, branch or
other unit operation, except in the ordinary course of business as presently
conducted or in a transaction not prohibited by subsection (c) below.
(c) Mergers, Etc. Merge or consolidate with or into, or acquire
------------
all of the assets of, any other Person, except that (i) any Subsidiary may
merge or consolidate with or into, or acquire assets from, any other
Subsidiary, (ii) any Subsidiary may merge into the Company and (iii) the
Company may merge with or into, and any Subsidiary may merge or consolidate
with or into, any other Person; provided, however, that (A) in the case
of any such merger, consolidation
30
or acquisition, both immediately before and after giving effect thereto, no
Event of Default or event which, with the passage of time or the giving of
notice, or both, would constitute an Event of Default shall have occurred
and be continuing, (B) in the case of any consolidation referred to in
clause (i) or ( iii) above , the corporation formed by such consolidation
shall be a Subsidiary of the Company, and (C) in the case of any merger to
which the Company is a party, either the Company is the surviving
corporation or the corporation into which the Company shall be merged shall
(1) assume the Company's obligations under this Agreement and the Related
Documents to which it is, or is to be, a party in a writing in form and
substance satisfactory to the Administrative Agent, (2) demonstrate to the
satisfaction of the Administrative Agent compliance with the covenants set
forth in Section 5.02(h) and (i) below, calculated on a pro forma basis as
of the last day of the immediately preceding fiscal quarter and giving
effect to such merger as if such corporation were the Company and the
Company were its Subsidiary and (3) enter into written amendment to this
Agreement in form and substance satisfactory to the Administrative Agent for
the purpose of conforming, as closely as possible, the substance of Articles
III through VI of this Agreement to the corporate structure of such
corporation and its Subsidiaries after giving effect to such merger.
(d) Related Documents. Amend or modify any Related Document to
-----------------
which the Company is or is to be a party or consent to any amendment or
modification of any Related Document to which the Company is not party.
(e) Compliance with ERISA. (i) Terminate, or permit any Affiliate
---------------------
to terminate, any Plan so as to result in any material (in the opinion of
the Required Banks) liability of the Company, or (ii) permit to exist any
occurrence of any Reportable Event (as defined in Title IV of ERISA), or any
other event or condition, which presents a material (in the opinion of the
Required Banks) risk of a Plan termination by the PBGC.
(f) Alternate Credit Facility. Cause a substitute letter of
-------------------------
credit or other similar facility to be delivered to the Trustee in
substitution of a Letter of Credit without paying to the Banks all
obligations hereunder following the Cancellation Date.
(g) Optional Redemption of Bonds. Cause an optional redemption
----------------------------
of any Bonds without providing for the payment of all amounts due or to
become due to the Banks hereunder.
(h) Common Equity. Permit Total Common Shareholders Equity, as
-------------
of the last day of any Fiscal Quarter, to be less than $575,000,000, plus
----
thirty-three and one third percent (33 1/3%) of the net cash proceeds to the
Company of any permanent equity capital of the Company issued following the
Date of Issuance.
(i) Total Debt to Total Capitalization. Permit the ratio of
----------------------------------
Total Debt to Total Capitalization, as of the last day of any Fiscal
Quarter, to be greater than 0.65 to 1.00.
(j) Amendments to Certain Agreements. Amend the First Mortgage
--------------------------------
Bond Indenture in a manner which is adverse to the interests of the Banks
or, in any event, to change the definition or means of application of the
definition of "Excluded Property" used therein.
31
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. The occurrence of any of the
-----------------
following events shall be an "Event of Default" hereunder:
(a) The Company shall fail to pay any amount payable under any
provision of Article II when due; or
(b) Any representation or warranty made, or deemed made, by the
Company herein or by the Company (or any of its officers) in connection with
this Agreement or any of the Related Documents shall prove to have been
incorrect in any material respect when made or deemed made; or
(c) The Company shall fail to perform or observe any of its
covenants and agreements contained in Section 5.02 hereof; or
(d) The Company shall fail to perform or observe any other
covenant or agreement contained in this Agreement or the Custodian Agreement
and, in any such case, such failure shall continue for ten Business Days
after written notice thereof from the Administrative Agent to the Company;
or
(e) The Company or any of its Subsidiaries shall fail to pay any
Debt (excluding Debt under this Agreement) of the Company or such Subsidiary
(as the case may be), when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other default
or event shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof; or
(f) A judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Company or any of its Subsidiaries
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
ten consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(g) Any approval of the PSC (including the PSC Order) or any
governmental body, public board or public body related to this Agreement or
the Custodian Agreement shall be modified, rescinded, revoked or set aside
or otherwise cease to remain in full force and effect or shall otherwise not
authorize the entirety of the Advances and other amounts outstanding
hereunder; or
32
(h) Any provision of this Agreement or the Custodian Agreement
shall at any time for any reason cease to be valid and binding on the
Company, or shall be declared to be null and void, or the validity or
enforceability thereof shall be denied or contested by the Company, or a
proceeding shall be commenced by any Governmental Agency having jurisdiction
over the Company seeking to establish the invalidity or unenforceability
thereof, or the Company shall deny that it has any further liability or
obligation thereunder; or
(i) Any "Event of Default" under and as defined in any Financing
Agreement or an Indenture shall have occurred and be continuing; or
(j) Any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to the
Company by the Administrative Agent, (i) such Termination Event (if
correctable) shall not have been corrected and (ii) the then present value
of such Plan's vested benefits exceeds the then current value of assets
accumulated in such Plan by more than the amount of $10,000,000 (or in the
case of a Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the Company's or any
Affiliate's withdrawing employer's proportionate share of such excess shall
exceed such amount); or
(k) The Company or any of its Affiliates as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal from
such Multiemployer Plan and the plan sponsor of such Multiemployer Plan
shall have notified such withdrawing employer that such employer has
incurred a withdrawal liability in an aggregate amount exceeding
$10,000,000; or
(l) The Company or any of its Affiliates shall incur liability in
an aggregate amount exceeding $10,000,000 pursuant to any one or more of
Title IV of ERISA or pursuant to Section 406, 409, 502(i), 502(1) or 515 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code; or
(m) The Company or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or
against the Company or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any Law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its Property; or the Company or any of its
Subsidiaries shall take any corporate action to authorize any of the actions
set forth above in this subsection (m); or
(n) Any event which materially and adversely affects the
financial condition or results of operations of the Company or the ability
of the Company to observe and perform the terms of this Agreement or any
Related Document to which the Company is or is to be a party shall have
occurred and be continuing.
33
SECTION 6.02. Upon an Event of Default. If any Event of Default
------------------------
shall have occurred and be continuing, the Administrative Agent, at the
request of the LC Bank or the Required Banks, shall (i) if the Letters of
Credit shall not have been issued, by notice to the Company declare the
Commitment to be terminated, whereupon the same shall forthwith terminate,
(ii) if the Letters of Credit shall have been issued, notify the Trustee of
such Event of Default and direct that the Trustee either (A) declare the
mandatory purchase of all Bonds then outstanding pursuant to Section
4.02(a)(iv) of each Indenture or (B) accelerate the Bonds pursuant to
Section 9.02 of each Indenture, which direction to accelerate the Bonds will
state that the Letters of Credit will terminate on the 10th business day (as
defined in the Indenture) following the Trustee's receipt of such notice,
and, in either case, provide a copy of such notice to the Company and the
Issuer, (iii) if the Administrative Agent shall have directed the Trustee to
declare the mandatory purchase of all Bonds under Section 4.02(a)(iv) of
each Indenture pursuant to the immediately preceding clause (ii) (A), in a
subsequent notice to the Trustee, notify the Trustee of the determination to
terminate the Letters of Credit on the 10th business day (as defined in the
Letters of Credit) following the Trustee's receipt of such notice, (iv) if
the Letters of Credit shall have been issued and a drawing to pay interest
on the Bonds shall have been made thereunder (other than such a drawing in
respect of the payment of interest upon scheduled or accelerated maturity,
or redemption, of the Bonds), notify the Trustee prior to the sixteenth day
following such drawing that the Interest Component in the amount of such
drawing will not be reinstated, (v) declare the Advances and all other
principal amounts outstanding hereunder, all interest thereon and all other
amounts payable hereunder to be forthwith due and payable, whereupon the
Advances and all other principal amounts outstanding hereunder, all such
interest and all such other amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Company, and (vi) exercise
in respect of the Pledged Bonds, in addition to other rights and remedies
provided for herein or in the Custodian Agreement or otherwise available to
it, all the rights and remedies of a secured party on default under the
Uniform Commercial Code in effect in the State of New York at that time;
provided, however, that in the event of an actual or deemed entry of an
-------- -------
order for relief with respect to the Company or any of its Subsidiaries
under the Federal Bankruptcy Code, (A) the Commitment (if the Letters of
Credit have not been issued) and the obligation of the Banks to make
Advances shall automatically be terminated, and (B) the Advances and all
amounts reimbursable on demand pursuant to Section 2.04, all interest
accrued and unpaid thereon and all other amounts payable hereunder shall
automatically become due and payable, without presentment, demand, protest
or any notice of any kind, all of which are hereby expressly waived by the
Company. Upon the occurrence of an Event of Default hereunder, all amounts
payable hereunder shall bear interest at the Default Rate.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or waiver of any
---------------
provision of this Agreement, or any Letter of Credit, nor consent to any
departure by the Company therefrom, shall in any event be effective unless
the same shall be in writing and signed by the
34
Company and the Required Banks and then such amendment, 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 it is in writing and signed by all the Banks, do any
of the following: (a) increase the amount of a Letter of Credit (other than
reinstatements expressly provided for in a Letter of Credit and herein) or
otherwise amend a Letter of Credit, extend the Stated Termination Date then
in effect, or subject the Banks to any additional obligations, (b) reduce
the principal of, or interest on, the Reimbursement Obligations or any fees
or other amounts payable hereunder (except fees payable to the
Administrative Agent or the LC Bank), (c) postpone any date fixed for any
payment of principal of, or interest on, the Reimbursement Obligations or
any fees or other amounts payable hereunder (except fees payable to the
Administrative Agent or the LC Bank), (d) change the percentage of the
Shares or the number of Banks that shall be required for the Banks or any of
them to take any action hereunder, (e) release any collateral for the
obligations of the Company under this Agreement (except as contemplated by
the Custodian Agreement), or (f) amend this Section 7.01 or Section 7.14;
provided, further that no amendment, waiver or consent shall, unless in
-------- -------
writing and signed by the LC Bank, affect the rights and duties of the LC
Bank under this Agreement.
SECTION 7.02. Notices, Etc. All notices and other communications
------------
provided for hereunder shall be in writing (including telegraphic
communication) and mailed, telecopied, telexed, telegraphed or delivered, if
to the Company, to it at its address at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director,
Treasury, telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇; and if to the LC Bank, to it at its
address at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Trade
Services Group, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇ and if to the Administrative
Agent to it at its address at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Client Services Unit, telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; and if to the
Banks to the address of each Bank specified on Schedule 7.02 hereto; or, as
to each party, at such other address or telecopy number as shall be
designated by such party in a written notice to the other party. All such
notices and communications shall, when mailed, telecopied, telexed or
telegraphed, be effective when deposited in the mails or sent by telecopy or
telex or delivered to the telegraph company, respectively, addressed as
aforesaid, except that notices to the Administrative Agent and Banks
pursuant to the provisions of Article II shall not be effective until
received by the Administrative Agent and Banks.
SECTION 7.03. No Waiver: Remedies. No failure on the part of the
-------------------
Administrative Agent or the Banks to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder 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 7.04. Right of Set-off. (a) Upon the occurrence and
----------------
during the continuance of any Event of Default, the Administrative Agent and
each Bank is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by the Administrative Agent or such
Bank to or for the credit or the account of the Company against any and all
of the obligations of the
35
Company now or hereafter existing under this Agreement, irrespective of
whether or not the Administrative Agent or such Bank shall have made any
demand hereunder and although such obligations may be contingent or
unmatured. The rights of the Administrative Agent and the Banks under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Administrative Agent or the
Banks may have.
(b) The Administrative Agent and each Bank agrees promptly to
notify the Company after any such set-off and application referred to in
subsection (a) above; provided that the failure to give such notice shall
not affect the validity of such set-off and application.
SECTION 7.05. Indemnification. The Company hereby indemnifies
---------------
and holds the Administrative Agent and each Bank, and their officers,
directors, employees and agents harmless from and against any and all
claims, damages, losses, liabilities, costs and expenses which they may
incur or which may be claimed against the Administrative Agent or the Banks;
or their respective officers, directors, employees and agents by any Person:
(a) by reason of or in connection with the execution, delivery or
performance of, or the sale or resale of, the Bonds including those
resulting from any misstatement in or omission from any official statement
or other offering document or supplement thereto relating to the Bonds
(except any misstatement in or omission resulting from information furnished
in writing by the LC Bank expressly for inclusion in such offering
documents), the Indentures, or the Financing Agreements, or any transaction
contemplated by the Indentures or the Financing Agreements, other than as
specified in subsection (b) below; or
(b) by reason of or in connection with the execution and
delivery, transfer or use of the proceeds of, or payment or failure to make
payment under, a Letter of Credit; provided, however, that the Company shall
-------- -------
not be required to indemnify the Administrative Agent or the Banks pursuant
to this Section 7.05(b) for any claims, damages, losses, liabilities, costs
or expenses to the extent caused by (i) the LC Bank's willful misconduct or
gross negligence in determining whether documents presented under a Letter
of Credit are genuine or comply with the terms of a Letter of Credit or (ii)
the LC Bank's willful or grossly negligent failure to make lawful payment
under a Letter of Credit after the presentation to it by the Trustee under
the related Indenture of a draft and certificate strictly complying with the
terms and conditions of such Letter of Credit.
(c) The Company will also indemnify and hold harmless the
Administrative Agent and the Banks from and against all losses and
reasonable costs or expenses which the Administrative Agent and the Banks
may incur by reason of either (i) any failure of the related Remarketing
Agent to pay when due the purchase price of any Bond for which such
Remarketing Agent has given the notice referred to in paragraph (1) of
Exhibit 4 of a Letter of Credit and/or (ii) any failure by the Trustee
promptly to turn over to the LC Bank in accordance with the provisions of an
Indenture the proceeds from the sale of any such Bond received from the
Remarketing Agent. The Company shall pay to the Administrative Agent any
such amounts not paid by a Remarketing Agent or the Trustee, as the case may
be, upon demand.
36
Nothing in this Section 7.05 is intended to limit the Company's
obligations contained in Article II. Without prejudice to the survival of
any other obligation of the Company hereunder, the indemnities and
obligations of the Company contained in this Section 7.05 shall survive the
payment in full of amounts payable pursuant to Article II and the
termination of the Letters of Credit.
SECTION 7.06. Banks Not Liable. (a) The Company assumes all
----------------
risks of the acts or omissions of the Trustee, any Remarketing Agent and any
beneficiary or transferee of a Letter of Credit with respect to its use of
the Letter of Credit. Neither the Banks, the Administrative Agent, nor any
of their officers, directors, employees or agents shall be liable or
responsible for: (a) the use which may be made of a Letter of Credit or any
acts or omissions of the Trustee and any other beneficiary or transferee 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 the LC Bank against presentation of documents which
do not comply with terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of
Credit; or (d) any other circumstances whatsoever in making or failing to
make payment under a Letter of Credit, except that the Company shall have a
------
claim against the LC Bank, and the LC Bank shall be liable to the Company,
to the extent of any direct, as opposed to consequential, damages suffered
by the Company which the Company proves were caused by (i) the LC Bank's
willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit are genuine or comply with the terms of
the Letter of Credit or (ii) the LC Bank's willful or grossly negligent
failure to make lawful payment under a Letter of Credit after the
presentation to it by the Trustee under an Indenture of a draft and
certificate strictly complying with the terms and conditions of such Letter
of Credit. In furtherance and not in limitation of the foregoing, the LC
Bank may accept original or facsimile (including telecopy) sight drafts and
accompanying certificates presented under a Letter of Credit that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
(b) Neither the Administrative Agent nor the Banks shall have any
liability to the Company, and the obligations of the Company under this
Agreement shall not be affected by (1) the form, sufficiency, correctness,
validity, genuineness and legal effect of any drafts, demands and other
documents, instruments and other papers relating thereto, (2) the good faith
and acts of any Person, (3) the existence, form, sufficiency and breach of
contracts of any nature whatsoever, including the Related Documents, (4) the
solvency, standing and responsibility of any Person, (5) any delay in giving
or failure to give any notice, demand or protest, (6) failure of any Person
to comply with the terms of a Letter of Credit, (7) errors, omissions or
delays in or nondelivery of any message, however sent, and (8) any other
error, neglect or omission, except as provided in the next to last sentence
of paragraph (a) of this Section.
(c) Neither the Administrative Agent nor the Banks shall have any
liability to the Company for, and the Company waives any right to object to,
payment made under a Letter of Credit against a demand varying in
punctuation, capitalization, spelling or similar matters of form. The
determination whether a demand has been made before the expiration of a
Letter of
37
Credit and whether a demand is in proper and sufficient form for compliance
with a Letter of Credit shall be made by the LC Bank in its sole discretion,
which determination shall be conclusive and binding upon the Company except
as otherwise expressly provided in this Agreement.
SECTION 7.07. Costs, Expenses and Taxes. The Company agrees to
-------------------------
pay on demand all costs and expenses in connection with the preparation,
execution, delivery, filing, recording, and administration (including any
amendment or waiver) of this Agreement and any other documents which may be
delivered in connection with this Agreement, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent and LC Bank, and local counsel who may be retained by
said counsel, with respect thereto and with respect to advising the
Administrative Agent and LC Bank as to its rights and responsibilities under
this Agreement and such other documents which may be delivered in connection
with this Agreement and all costs and expenses (including counsel fees and
expenses) in connection with (i) the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement and such
other documents which may be delivered in connection with this Agreement
(and, upon the occurrence of an Event of Default, all such costs and
expenses of the Banks) or (ii) any action or proceeding relating to a court
order, injunction, or other process or decree restraining or seeking to
restrain the Administrative Agent and LC Bank from paying any amount under
any Letter of Credit. In addition, the Company shall pay any and all stamp
and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this Agreement or the
Letters of Credit or any of such other documents, and agrees to save the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
SECTION 7.08. Binding Effect. This Agreement shall become
--------------
effective when it shall have been executed and delivered by the Company, the
Administrative Agent and the Banks and thereafter shall be binding upon and
inure to the benefit of the Company, the Administrative Agent and the Banks
and their respective successors and assigns, except that the Company shall
not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Administrative Agent and the Banks.
SECTION 7.09. Severability. Any provision of this Agreement
------------
which is prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.
SECTION 7.10. Governing Law; Submission to Jurisdiction; Etc.
---------------------------------------------------
This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of New York without regard to choice of law
provisions. Any action or proceeding arising out of or relating to this
Agreement or the Letter of Credit shall be heard and determined in an
appropriate state or federal court in the State of New York, New York
County. The Company irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of venue
of any such suit, action or proceeding brought in such courts and any claim
that any such suit, action or proceeding has been brought in an inconvenient
38
forum. The Company also irrevocably consents to the service of any and all
process in any such suit, action or proceeding by mailing of copies of such
process to the Company at its address provided in Section 7.02. The Company
agrees that a final judgment not stayed in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. All mailings under
this Section 7.10 shall be by certified mail, return receipt requested.
Nothing in this Section 7.10 shall affect the right of the Administrative
Agent or the Banks to serve legal process in any other manner permitted by
law or affect the right of the Banks to bring any suit, action or proceeding
against the Company or its property in the courts of any other jurisdiction.
SECTION 7.11. Headings. Section headings in this Agreement are
--------
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
SECTION 7.12. Counterparts. This Agreement may be executed by
------------
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 7.13. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES, TO
--------------------
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. THE PARTIES HERETO (A) CERTIFY
THAT NO REPRESENTATIVE 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) ACKNOWLEDGE THAT
THEY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THE OTHER RELATED DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION.
SECTION 7.14. Participation and Assignment. (a) Each Bank may,
----------------------------
without the consent of the Company, sell participations to one or more banks
or other financial institutions (each a "Participant") in all or a portion
of its rights and obligations under this Agreement; provided, however, (i)
-----------------
such Bank's obligations under this Agreement shall remain unchanged, (ii)
such Bank shall remain solely responsible to the Company for the performance
of such obligations, (iii) except as expressly set forth herein, any such
Participant shall be entitled to the benefit of the cost and fee protection
and indemnification provisions contained in Sections 2.07, 2.08, 2.14, 2.15,
2.16, 7.04, 7.05 and 7.07 to the same extent as if the Participant were such
Bank hereunder, and (iv) such Bank shall retain the sole right to approve
any amendment, modification or waiver of any provisions of this Agreement or
any Related Document (other than amendments, modifications, releases or
waivers with respect to any amounts payable hereunder or the amount of
principal of or the rate at which interest is payable hereunder or the dates
fixed for payments of interest or fees or the date of termination or
expiration of any Letter of Credit or any change to the Stated Amount
thereof).
39
(b) Each Bank may assign all or a portion of its rights and
obligations under this Agreement, in the Letters of Credit or in any
security hereunder, including, without limitation, any instruments securing
the Company's obligations hereunder; provided that (i) no assignment by any
--------
Bank may be made to any Person, except with the prior written consent of the
LC Bank, (ii) any assignment shall be of a constant and not a varying
percentage of all of the assignor's rights and obligations hereunder, and
(iii) the parties to such assignment shall execute and deliver to the
Administrative Agent an instrument of assignment (an "Assignment") in form
and substance satisfactory to the Administrative Agent and the LC Bank,
together with a processing fee of $3,000 for the Administrative Agent's
account. Upon receipt of a completed Assignment and the processing fee, the
Administrative Agent will record in a register maintained for such purpose
the name of the assignee and the percentage participation interest assigned
by the assignor and assumed by the assignee for purposes of the
determination of such assignor's and assignee's respective Shares. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment, which effective date shall be
at least five Business Days after the execution thereof, the assignee shall,
to the extent of such assignment, become a party hereto and have all of the
rights and obligations of a Bank hereunder, including without limitation a
right to share in the proceeds of any amount realized under any security
documents with respect to the interest acquired, and, to the extent of such
assignment, such assigning Bank shall be released from its obligations
hereunder (without relieving such Bank from any liability for damages, costs
and expenses suffered by the Administrative Agent, the LC Bank or the
Company as a result of the failure by such Bank to perform its obligations
hereunder).
(c) A Bank may disclose to any Participant or proposed
Participant, or any assignee or proposed assignee, any information that the
Company has delivered or is required to deliver to such Bank pursuant to
this Agreement or the other Related Documents.
(d) Nothing herein shall limit a Bank's right to assign its
interests hereunder to a Federal Reserve Bank.
(e) The LC Bank hereby acknowledges and agrees that it shall
remain solely liable under the Letters of Credit notwithstanding any sale or
transfer contemplated by this Section 7.14.
ARTICLE VIII
SYNDICATION
SECTION 8.01. Syndication. (a) In the event that the LC Bank
-----------
shall make any payment under a Letter of Credit and the Company shall not
reimburse the LC Bank by 3:00 p.m. (New York City time) on the same Business
Day in full for such payment in accordance with Section 2.04 (the difference
between the amount of such payment and the amount reimbursed by the Company
being the "Principal Amount"), the LC Bank will immediately notify each of
the Banks of such Principal Amount and each Bank will immediately on the
same Business Day and unconditionally pay to the LC Bank an amount equal to
its Share of the Principal Amount in
40
United States dollars and in same day funds in payment for its Share of the
Reimbursement Obligations with respect to such Principal Amount, plus
compensation, payable on demand, from and including the date when such
amount is due to, but not including, the date such amount is paid at the
Federal Funds Rate, in effect from time to time.
(b) Upon payment in full by a Bank of its Share of the
Reimbursement Obligations pursuant to Section 8.01(a), such Bank shall have
purchased an assignment of its Share of the right, title and interest of the
LC Bank in and to such Reimbursement Obligations, without recourse,
representation or warranty, and shall to the extent of such Share, be a
direct creditor of the Company.
(c) If any Bank shall default in the payment when due of its
Share of any Reimbursement Obligations, in addition to any other claim or
remedy the LC Bank may have against such Bank, such Bank shall not be
entitled to receive any payments pursuant to this Agreement or otherwise
have any other rights hereunder or under the Related Documents until all
amounts due and payable by such Bank to the LC Bank hereunder shall have
been paid in full.
SECTION 8.02. Sharing of Payments. If any Bank shall obtain any
-------------------
payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Reimbursement Obligations in
excess of its ratable share of payments on account of the Reimbursement
Obligations obtained by all the Banks, such Bank shall forthwith purchase
from the other Banks such participations in the Reimbursement Obligations as
shall be necessary to cause such purchasing Bank to share such 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
Bank, such purchase from each Bank shall be rescinded and such Bank shall
repay to the purchasing Bank the purchase price to the extent of such
recovery together with an amount equal to such Bank's ratable share
(according to the proportion of (i) the amount of such Bank's required
repayment to (ii) the total amount so recovered from the purchasing Bank) of
any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Company agrees that any Bank
so purchasing a participation from another Bank pursuant to this Section
8.02 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 Bank were the direct creditor of the Company in the
amount of such participation.
ARTICLE IX
THE ADMINISTRATIVE AGENT AND THE LC BANK
SECTION 9.01. Authorization and Action. Each Bank hereby appoints
------------------------
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the Related
Documents as are delegated to the Administrative Agent by the terms hereof
and thereof, together with such powers as are reasonably incidental thereto.
As to any matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of the Reimbursement
Obligations), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall
41
be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Banks
or the Required Banks, as applicable, and such instructions shall be binding
upon all Banks; provided, however, that the Administrative Agent shall not
--------- -------
be required to take any action that exposes the Administrative Agent to
personal liability or which is contrary to this Agreement or applicable law.
The Administrative Agent agrees to give to each Bank prompt notice of each
written notice given to it by the Company, the Trustee, or the LC Bank
pursuant to the terms of this Agreement or the Indenture.
SECTION 9.02. Administrative Agent's Reliance, Etc. Neither the
-------------------------------------
Administrative Agent, the LC Bank, nor any of their directors, officers,
agents or employees shall be liable for any action taken or omitted to be
taken by it or them under or in connection with this Agreement or any
Related Document, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each of
the Administrative Agent and the LC Bank: (i) may consult with legal
counsel (including counsel for the Company), independent public accountants
and other experts selected by it and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representations to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations (whether written or oral) made in
or in connection with this Agreement or any Related Documents; (iii) shall
not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or
any Related Document on the part of the Company or to inspect the property
(including the books and records) of the Company; (iv) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
Related Document or any other instrument or document furnished pursuant
hereto or thereto; and (v) shall incur no liability under or in respect of
this agreement or any Related Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties.
SECTION 9.03. Bank Credit Decision. Each Bank acknowledges that
--------------------
it has, independently and without reliance upon the Administrative Agent or
any other Bank and based on the financial statements referred to in Section
4.01(f) and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 9.04. Indemnification. The Banks agree to indemnify the
---------------
Administrative Agent and the LC Bank (to the extent not reimbursed by the
Company), ratably according to their respective Shares, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the
Administrative Agent or the LC Bank in any way relating to or arising out of
this Agreement or any action taken
42
or omitted by the Administrative Agent or the LC Bank under this Agreement
or the Related Documents; provided that no Bank shall be liable for any
--------
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Administrative Agent's or the LC Bank's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank agrees to
reimburse the Administrative Agent and the LC Bank promptly upon demand for
its ratable share of any out-of-pocket expenses (including counsel fees)
incurred by the Administrative Agent or the LC Bank in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, to the extent that the Administrative Agent or the LC Bank is not
reimbursed for such expenses by the Company.
SECTION 9.05. Barclays and affiliates. With respect to its Share
-----------------------
and the Reimbursement Obligations held by it, Barclays shall have the same
rights and powers under this Agreement as any other Bank and may exercise
the same as though it were not the Administrative Agent; and the term "Bank"
or "Banks" shall, unless otherwise expressly indicated, include Barclays in
its individual capacity. Barclays and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally
engage 0 in any kind of business with, the Company, any of its subsidiaries
and any Person who may do business with the Company or any such subsidiary,
all as if Barclays were not the Administrative Agent and without any duty to
account therefor to the Banks.
SECTION 9.06. Successor Administrative Agent. The Administrative
------------------------------
Agent may resign at any time by giving written notice thereof to the Banks
and the Company and may be removed at any time for cause by the agreement of
all of the Banks; provided that solely for purposes hereof if the same
--------
entity is the LC Bank and the Administrative Agent then the agreement of the
LC Bank shall not be required. Upon any such resignation or removal, the
Required Banks shall have the right to appoint a successor Administrative
Agent subject to the approval of the Company. If no successor Administrative
Agent shall have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation or the removal of the retiring
Administrative Agent, then the retiring Administrative Agent after
consultation with the Company may, on behalf of the Banks, appoint a
successor Administrative Agent, which shall be a commercial bank organized
or licensed under the laws of the United States of America or of
43
any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If at any time there shall be no Person serving as Administrative
Agent under this Agreement, then the LC Bank shall be the Administrative
Agent hereunder until a successor is appointed in accordance herewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective duly authorized
representatives as of the date first above written.
NEVADA POWER COMPANY
By: ▇. ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Director, Treasury
BARCLAYS BANK, PLC, NEW YORK
BRANCH, as Administrative Agent
and LC Bank
By: ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Associate Director
UNION BANK OF SWITZERLAND,
LOS ANGELES BRANCH,
as a Bank
By: ▇▇▇▇▇▇ ▇. TO
-------------------
Title: ▇▇▇▇▇▇ ▇. To
Assistant Vice President
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Title: L. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH,
as a Bank
By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------
Title: VP
By: ▇▇▇▇▇ ▇. HAPLOCK
-----------------------
Title: VP
UNION BANK, as a Bank
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Title: V.P.
THE FUJI BANK, LIMITED,
LOS ANGELES AGENCY,
as a Bank
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
JOINT GENERAL MANAGER
ABN AMRO BANK N.V.,
as a Bank
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
By: ▇▇▇▇▇ ▇. MCFOLDEN
------------------------
Title: ▇▇▇▇▇ ▇. McFolden
AVP
Schedule 4.01(q)
[Environmental Disclosure]
NONE
Schedule 7.02
[Addresses and information for Banks]
Bank Share Address Wire Information
---- ----- ------- ----------------
ABN Amro Bank N.V., 16.2323% ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ Amro ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇
International ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ABA# ▇▇▇▇▇▇▇▇▇
Branch Attention: ▇▇▇▇▇ For Credit to
▇▇▇▇▇▇ ABN Amro
Tel: (▇▇▇)▇▇▇-▇▇▇▇ San Francisco
Fax: (▇▇▇)▇▇▇-▇▇▇▇ Acct#
6510010545-41
101 California Ref: ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇
Attention: ▇.▇.
▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Fuji Bank, 16.2323% ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, First
Limited, #▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ of California
Agency 90071 Los Angeles
Attention: ▇▇▇▇▇ ▇. Main Office
Lim ABA# ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ For Credit to:
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ The Fuji Bank,
Limited, Los
Angeles Agency
Acct # 220834831
Ref: Nevada Power
Union Bank 16.2323% Energy Capital Union Bank
Services Monterey Park,
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ Flr ABA# 122-000-
Los Angeles, CA 496
90071 Acct# 77070-
Attention: ▇▇▇▇▇ 196431
▇▇▇▇▇▇▇▇ Attention: 192
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Note Center
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Ref: Nevada
Power Company
2
Westdeutsche 16.2323% 1211 Avenue of the Chase Manhattan
Landesbank Americas Bank
Girozentrale, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Chase Manhattan
New York Branch Attention: ▇▇▇▇▇ Plaza
Haplock New York, NY
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ WestLB New York
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Branch
Acct#
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ Ref: Nevada
Los Angeles, CA Power Co.
90071 ABA ▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇
▇▇▇▇▇▇ CHIPS 201
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Swift ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Union Bank of 16.2323% ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank of
Switzerland, Street, Switzerland
Los Angeles ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ Fed Routing No.
90071 026008439
Attention: ▇▇▇▇▇▇ To Favor of UBS
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Los Angeles
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Account No. ▇▇▇▇▇▇▇▇
Ref: Nevada Power Co.
EXHIBIT A
FORM OF LETTER OF CREDIT
------------------------
IRREVOCABLE LETTER OF CREDIT
NO.
----------------
[Issuance date of the Letter of Credit]
United States Trust Company
of New York, as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Dear Sir or Madam:
We hereby establish, at the request and for the account of Nevada
Power Company (the "Company"), in your favor, as Trustee under the Indenture
of Trust, dated as of October 1, 1995 (the "Indenture"), by and between
[ ] (the "Issuer") and you, as Trustee, pursuant to which
------------------
[ ] in aggregate principal amount of [ ]
------------------ --------------------
(including any beneficial interests therein, the "Bonds"), are being issued,
our Irrevocable Letter of Credit No. in the amount of the
-----------------
[Initial Stated Amount] (subject to reduction and reinstatement as provided
below, the "Stated Amount").
(l) Cancellation Date. This Letter of Credit shall expire on the
-----------------
earliest to occur of (i) October 12, 1999 (the "Stated Termination Date"),
(ii) the date upon which we honor a draft accompanying a written and
completed certificate signed by you in substantially the form of Exhibit 1
or Exhibit 3 attached hereto, and stating therein that such draft is the
final draft to be drawn under this Letter of Credit and that, upon the
honoring of such draft, this Letter of Credit will expire in accordance with
its terms, (iii) the date upon which we receive a written certificate signed
by you and stating therein that no Bonds are "outstanding" under the
Indenture,(iv) on the second business day (as hereinafter defined) following
the effective date of the conversion of the Bonds to a "Term Rate" pursuant
to Section 2.03(c) of the Indenture which provides that all of the Bonds
shall bear interest at a Term Rate to maturity, (v) the 10th business day
following your having received a notice from the Administrative Agent (as
defined in paragraph 5, below) that we are terminating this Letter of Credit
pursuant to Section 9.01(d) of the Indenture in connection with the
occurrence of an Event of Default under the Reimbursement Agreement (as
defined in paragraph (5) below) and (vi) the date upon which we receive a
written
A-1
certificate signed by you and stating therein that an "Alternate Credit
Facility" has been provided under the Indenture (such earliest date being
the "Cancellation Date").
As used herein, "business day" shall mean any day on which banks
are not required or authorized to remain closed in New York City or Los
Angeles, California and on which the New York Stock Exchange is not closed
and, for purposes of clauses (v) and (vi) of the immediately preceding
paragraph, the location of your office specified above or the principal
corporate trust office designated to us in a certificate substantially in
the form set forth in Exhibit 5 by any transferee who has succeeded you as
Trustee under the Indenture.
(2) Principal and Interest Components. The aggregate amount which
---------------------------------
may be drawn under this Letter of Credit, subject to reductions in amount
and reinstatement as provided below, is [ ] ([ ]),
-------------- --------------
of which the aggregate amounts set forth below may be drawn as indicated.
(i) An aggregate amount not exceeding [ ]
------------------
([ ]), as such amount may be reduced and
--------------------
reinstated as provided below, may be drawn in respect of payment
of principal (whether upon scheduled or accelerated maturity, or
upon redemption) of the Bonds or the portion of the purchase price
of Bonds corresponding to principal (the "Principal Component").
(ii) An aggregate amount not exceeding [ ]
---------------------
([ ]), as such amount may be reduced and
-------------------------
reinstated as provided below, may be drawn in respect of payment
of interest on the Bonds or the portion of the purchase price of
Bonds corresponding to interest, but not more than an amount equal
to accrued interest on the Bonds for the period of 62 days
immediately preceding the date of such drawing at a maximum rate
of twelve percent (12%) per annum calculated on the basis of a
year of 365 days (the "Interest Component").
(3) Drawings. Funds under this Letter of Credit are available to
you against (i) your draft payable on the date such draft is drawn on us,
stating on its face: "Drawn under Irrevocable Letter of Credit No. ,
--------
dated October , 1995", and (ii) the appropriate certificate specified
--
below, duly executed by you and appropriately completed.
Exhibit Setting Forth
Type of Drawing Form of Certificate Required
----------------------- -------------------------------
Drawing in respect of regularly Exhibit 1
scheduled interest payment or
payment of principal of and
interest on the Bonds upon
scheduled or accelerated
maturity
Tender Drawing (as hereinafter Exhibit 2
defined)
Redemption/Mandatory Purchase Exhibit 3
Drawing
(as hereinafter defined)
A-2
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented to our office at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention: Trade Services Group (or at such other office as
we may designate by written notice to you) or upon prior telephone notice to
us at (▇▇▇) ▇▇▇-▇▇▇▇ or 5122, by facsimile transmission received by us at
the following telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇ (or at such other numbers as
we may designate by written notice to you), promptly thereafter, confirmed
by delivery of the original drafts, prominently marked to indicate they are
confirmations. If we receive your draft(s) and certificate(s) at such
office, all in strict conformity with the terms and conditions of this
Letter of Credit, at or before 12:00 noon (New York time), on a business day
on or before the Cancellation Date, we will honor such draft(s) at or before
3:00 p.m. (New York time) on the same business day to your order in
accordance with your payment instructions; and draft(s) so received
following 12:00 noon (New York time) will be so honored at or before 1:00
p.m. (New York time) on the next business day (notwithstanding that such
prior business day may have been the Cancellation Date). If you request, by
written notice to us delivered in a timely fashion, payment under this
Letter of Credit will be made by wire transfer of federal funds to your
account with any bank that is a member of the Federal Reserve System, or by
deposit of immediately available funds into a designated account that you
maintain with us. All payments made by us under this Letter of Credit will
be made with our own funds and not with any funds of the Company or the
Issuer.
(4) Reductions. The Principal Component and the Interest
----------
Component shall be reduced immediately following our honoring any draft
drawn hereunder (i) to pay principal of, or interest on, the Bonds or to pay
the purchase price of Bonds that are subject to mandatory purchase by the
Company pursuant to Section 4.02(a) of the Indenture (any such drawing in
respect of the payment of principal of and interest, if any, on the Bonds
upon redemption of the Bonds in whole or in part or the purchase price of
Bonds that are so subject to mandatory purchase by the Company being a
"Redemption/Mandatory Purchase Drawing"), or (ii) to pay the purchase price
of Bonds that are purchased pursuant to an election by the holders thereof
pursuant to Section 4.01 of the Indenture (any such drawing in respect of
the circumstances referred to in this clause (ii) being a "Tender Drawing"),
in each case by an amount equal to the respective component of the amount of
such draft.
(5) Reinstatement. On the sixteenth day following each drawing
-------------
hereunder to pay interest on the Bonds (other than a drawing in respect of
the interest component of a Tender Drawing or a Redemption/Mandatory
Purchase Drawing), the amount so drawn shall be reinstated to the Interest
Component, unless you shall have theretofore received written notice from us
or the Administrative Agent that we will not reinstate this Letter of Credit
in the amount of such drawing because (i) we (or the Banks party to the
Reimbursement Agreement referred to below) have not been reimbursed in full
by the Company for the amount of such drawing, together with interest, if
any, owing thereon pursuant to the Letter of Credit and Reimbursement
Agreement, dated as of October 1, 1995 (the "Reimbursement Agreement"),
among the Company, us, Barclays Bank PLC, New York Branch, as Administrative
Agent (the "Administrative Agent"), and the Banks party thereto (the
"Banks"), or (ii) an Event of Default under the Reimbursement Agreement has
occurred and is then continuing; provided, however, that we shall not be
-------- -------
entitled to give any such notice in the event that, pursuant to our
direction,
A-3
you shall be required to give notice of mandatory purchase of the Bonds in
accordance with Section 4.02(a)(iv) of the Indenture.
Immediately upon our notice to you by hand delivery or facsimile
transmission in the form set forth in Exhibit 4 hereto that (a) we have been
reimbursed by or for the account of the Company in respect of any Tender
Drawing or Redemption/Mandatory Purchase Drawing pursuant to Section
4.02(a)(i) or (ii) of the Indenture (other than upon a conversion to a Term
Rate to maturity pursuant to Section 2.03(c) of the Indenture), together
with interest, if any, owing thereon pursuant to the Reimbursement
Agreement, the amounts of which we notify you we have been reimbursed in
respect of such Tender Drawing or Redemption/Mandatory Purchase Drawing
shall be reinstated to the Principal Component and the Interest Component,
as specified in such notice, or (b) we have received notice from a person
stating therein that he or she is a representative of the "Remarketing
Agent" referred to in the Indenture and that such Remarketing Agent has
wired us amounts in immediately available funds in connection with a Tender
Drawing pursuant to Section 4.01 of the Indenture or in connection with a
Redemption/Mandatory Purchase Drawing pursuant to Section 4.02(a)(i) or (ii)
of the Indenture (other than upon a conversion to a Term Rate to maturity
pursuant to Section 2.03(c) of the Indenture) which amounts were received as
the purchase price of remarketed Bonds and which amounts, when added to
amounts, if any, theretofore reimbursed to us by or for the account of the
Company in respect of the purchase price of such Bonds paid by us as part of
such Tender Drawing or Redemption/Mandatory Purchase Drawing and interest,
if any, owing thereon pursuant to the Reimbursement Agreement, to reimburse
us in full for such purchase price theretofore paid by us and such interest,
if any, the Principal Component and the Interest Component shall be
reinstated to the extent of the principal and interest components of the
purchase price of such Bonds as specified in such notice. This Letter of
Credit will not be reinstated following a Redemption/Mandatory Purchase
Drawing (i) pursuant to Section 4.02 (a)(iv) of the Indenture unless we
notify you by hand delivery or facsimile transmission that we in our
discretion have reinstated the Letter of Credit by the amount of such
Redemption/Mandatory Purchase Drawing, or (ii) pursuant to Section
4.02(a)(ii) of the Indenture upon a conversion to a Term Rate to maturity
pursuant to Section 2.03 of the Indenture, or (iii) to pay Bonds upon
redemption or scheduled maturity of the Bonds, or accelerated maturity of
the Bonds pursuant to Section 9.02 of the Indenture or (iv) pursuant to
Section 4.02(a)(iii) of the Indenture.
(6) Notices. Communications with respect to this Letter of Credit
-------
shall be in writing and shall be addressed to us at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Trade Services Group (or at such other
office as we may designate by written notice to you) or by facsimile
transmission received by us at the following telecopier number: (212) 412-
5111 (or at such other telephone number as we may designate by written
notice to you) specifically referring to the number of this Letter of
Credit.
(7) Transfer. This Letter of Credit is transferable in its
--------
entirety (but not in part) to any transferee who has succeeded you as
Trustee under the Indenture and may be successively so transferred. Transfer
of this Letter of Credit to such transferee shall be effected
A-4
by the presentation to us of this Letter of Credit accompanied by a
certificate substantially in form set forth in Exhibit 5.
(8) Governing Laws, Etc. This Letter of Credit shall be governed
--------------------
by and construed in accordance with the laws of the State of New York,
including the Uniform Commercial Code as in effect in the State of New York.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited
by reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds, the Indenture and the
Reimbursement Agreement), except only the certificates and the drafts
referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
for such certificates and such drafts. Whenever and wherever the terms of
this Letter of Credit shall refer to the purpose of a draft hereunder, or
the provisions of any agreement or document pursuant to which such draft may
be presented hereunder, such purpose or provisions shall be conclusively
determined by reference to the certificate accompanying such draft; in
furtherance of this sentence, whether any drawing is in respect of payment
of regularly scheduled interest on the Bonds or of principal of or interest
on the Bonds upon scheduled or accelerated maturity or is a Tender Drawing
or a Redemption/Mandatory Purchase Drawing shall be conclusively determined
by reference to the certificate accompanying such drawing.
Very truly yours,
BARCLAYS BANK PLC, NEW YORK BRANCH
By:
-------------------------------
Title:
A-5
EXHIBIT 1
TO THE LETTER OF CREDIT
CERTIFICATE FOR DRAWING IN RESPECT OF REGULARLY SCHEDULED
INTEREST PAYMENT OR PAYMENT OF PRINCIPAL OF AND INTEREST ON THE
BONDS UPON SCHEDULED OR ACCELERATED MATURITY OF THE BONDS
The undersigned, a duly authorized officer of [ ] (the
-------------
"Trustee"), hereby certifies as follows to Barclays Bank PLC, New York
Branch (the "Bank"), with reference to Irrevocable Letter of Credit No.
(the "Letter of Credit") issued by the Bank in favor of the
--------------
Trustee. Terms defined in the Letter of Credit and used but not defined
herein shall have the meanings given them in the Letter of Credit.
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit in
respect of [a regularly scheduled interest payment]1 [the payment of
principal of and interest on the Bonds upon the scheduled or accelerated
maturity of the Bonds]2 in accordance with Section 6.05 of the Indenture.
Such Bonds are not registered in the name of the Company and are not held or
required to be held by the Trustee for the account of the Company pursuant
to the Indenture.
(3) The respective amounts of principal of and interest on the
Bonds which are due and payable (or which have been declared to be due and
payable) and with respect to the payment of which the Trustee does not have
available amounts that, pursuant to Section 6.04 of the Indenture, are to be
applied to such payment prior to moneys drawn under the Letter of Credit are
as follows, and the amount of the draft accompanying this Certificate does
not exceed the sum of such amounts:
Principal: $
------------------
Interest: $
------------------
(4) The portion of the amount of the draft accompanying this
Certificate being drawn in respect of payment of principal of the Bonds, as
indicated in paragraph (3) above, does not exceed the Principal Component of
the Letter of Credit, and the portion of the amount of the draft
accompanying this Certificate being drawn in respect of payment of interest
on the Bonds,
---------------------------
1. To be used for regularly scheduled interest payments.
2. To be used upon scheduled or accelerated maturity of the Bonds.
A-6
as indicated in paragraph (3) above, does not exceed the Interest Component
of the Letter of Credit. The respective portions of the amount of the draft
accompanying this Certificate in respect of payment of principal of and
interest on the Bonds have been computed in accordance with the terms and
conditions of the Bonds and the Indenture.
[(5) The draft accompanying this Certificate being presented upon
the [scheduled maturity of the Bonds] [accelerated maturity of the Bonds
pursuant to Section 9.02 of the Indenture]3 is the final draft to be drawn
under the Letter of Credit in respect of principal of and interest on the
Bonds. Upon the honoring of such draft the Letter of Credit will expire in
accordance with its terms.]4
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of
----
, .
---------------- ----
[ ], as Trustee
---------------
By
--------------------------------------
Title:
-----------------------
3. Insert appropriate bracketed language.
4. To be used upon scheduled or accelerated maturity of the Bonds.
A-7
EXHIBIT 2
TO THE LETTER OF CREDIT
CERTIFICATE FOR TENDER DRAWING UPON BONDHOLDER ELECTION
The undersigned, a duly authorized officer of [ ]
------------------
(the "Trustee"), hereby certifies as follows to Barclays Bank PLC, New York
Branch (the "Bank"), with reference to Irrevocable Letter of Credit No.
(the "Letter of Credit") issued by the Bank in favor of the
----------
Trustee. Terms defined in the Letter of Credit and used but not defined
herein shall have the meanings given them in the Letter of Credit.
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a Tender Drawing under the Letter of
Credit with respect to the purchase price of Bonds delivered pursuant to an
election by Bondholders pursuant to Section 4.01 of the Indenture and the
Bonds. Such Bonds are not registered in the name of the Company and are not
held or required to be held by the Trustee for the account of the Company
pursuant to the Indenture.
(3) The respective amounts of purchase price corresponding to
principal of and accrued interest, if any, on such Bonds and with respect to
the payment of which the Trustee does not have available amounts that,
pursuant to Section 4.05 of the Indenture, are to be applied to such payment
prior to moneys drawn under the Letter of Credit are as follows, and the
amount of the draft accompanying this Certificate does not exceed the sum of
such amounts:
Principal: $
------------------
Interest: $
------------------
(4) The portion of the amount of the draft accompanying this
Certificate being drawn in respect of purchase price corresponding to
principal of the Bonds, as indicated in paragraph (3) above does not exceed
the Principal Component of the Letter of Credit, and the portion of the
amount of the draft accompanying this Certificate being drawn in respect of
purchase price corresponding to interest on the Bonds, as indicated in
paragraph (3) above, does not exceed the Interest Component of the Letter of
Credit. The respective portions of the amount of the draft accompanying this
Certificate in respect of purchase price corresponding to principal of and
interest on such Bonds have been computed in accordance with the terms and
conditions of the Bonds and the Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of , .
---- ---------------- ----
A-8
[ ], as Trustee
---------------
By
--------------------------------------
Title:
A-9
EXHIBIT 3
TO THE LETTER OF CREDIT
CERTIFICATE FOR REDEMPTION/MANDATORY PURCHASE DRAWING IN RESPECT
OF PAYMENT OF PRINCIPAL OF AND INTEREST ON BONDS UPON REDEMPTION
OR MANDATORY PURCHASE
The undersigned, a duly authorized officer of[ ]
---------------
(the "Trustee"), hereby certifies as follows to Barclays Bank PLC, New York
Branch (the "Bank"), with reference to Irrevocable Letter of Credit No.
----
(the "Letter of Credit") issued by the Bank in favor of the Trustee. Terms
defined in the Letter of Credit and used but not defined herein shall have
the meanings given them in the Letter of Credit.
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a Redemption/Mandatory Purchase Drawing
under the Letter of Credit with respect to [the payment of principal of and
accrued interest, if any, on the Bonds upon redemption of the Bonds in
accordance with Section 3.01 of the Indenture]1 [the purchase price of Bonds
subject to mandatory purchase by the Company pursuant to Section 4.02(a)
[(i)], [(ii)], [(iii)], or [(iv)] of the Indenture].2 Such Bonds are not
registered in the name of the Company and are not held or required to be
held by the Trustee for the account of the Company pursuant to the
Indenture.
[(3) The respective amounts of principal of and interest on the
Bonds which are due and payable and with respect to the payment of which the
Trustee does not have available amounts that, pursuant to Section 6.04 of
the Indenture, are to be applied to such payment prior to moneys drawn under
the Letter of Credit are as follows, and the amount of the draft
accompanying this Certificate does not exceed the sum of such amounts:
Principal: $
----------------
Interest: $ ]3
---------------
---------------------
1. To be used upon an optional or mandatory redemption of the Bonds in
whole or in part.
2. To be used upon a mandatory purchase of the Bonds pursuant to Section
4.02(a) of the Indenture.
3. To be used upon an optional or mandatory redemption of the Bonds in whole
or in part.
A-10
[(3) The respective amounts of the purchase price corresponding to
principal of and accrued interest, if any, on such Bonds and with respect to
the payment of which the Trustee does not have available amounts that,
pursuant to Section 4.05 of the Indenture, are to be applied to such payment
prior to moneys drawn under the Letter of Credit are as follows, and the
amount of the draft accompanying this Certificate does not exceed the sum of
such amounts:
Principal: $
-----------------
Interest: $ ]4
-----------------
[(4) The portion of the amount of the draft accompanying this
Certificate being drawn in respect of payment of principal of the Bonds, as
indicated in paragraph (3) above, does not exceed the Principal Component of
the Letter of Credit, and the portion of the amount of the draft
accompanying this Certificate being drawn in respect of payment of interest
on the Bonds, as indicated in paragraph (3) above, does not exceed the
Interest Component of the Letter of Credit. The respective portions of the
amount of the draft accompanying this Certificate in respect of payment of
principal of and interest on the Bonds have been computed in accordance with
the terms and conditions of the Bonds and the Indenture.])5
[(4) The portion of the amount of the draft accompanying this
Certificate being drawn in respect of purchase price corresponding to
principal of the Bonds, as indicated in paragraph (3), above, does not
exceed the Principal Component of the Letter of Credit, and the portion of
the amount of the draft accompanying this Certificate being drawn in respect
of purchase price corresponding to interest on the Bonds, as indicated in
paragraph (3) above, does not exceed the Interest Component of the Letter of
Credit. The respective portions of the amount of the draft accompanying this
Certificate in respect of purchase price corresponding to principal of and
interest on such Bonds have been computed in accordance with the terms and
conditions of the Bonds and the Indenture.]6
[(5) The draft accompanying this Certificate is the final draft to
be drawn under the Letter of Credit in respect of principal of and interest
on the Bonds and, upon the honoring of such draft, the Letter of Credit will
expire in accordance with its terms.]7
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of , .
---- ------------------ ----
---------------------------
4. To be used upon a mandatory purchase of the Bonds pursuant to Section
4.02(a) of the Indenture.
5. To be used upon an optional or mandatory redemption of the Bonds in whole
or in part.
6. To be used upon a mandatory purchase of the Bonds pursuant to Section
4.02(a) of the Indenture.
7. To be used in the case of all redemption of the Bonds other than
redemptions in part.
A-11
[ ], as Trustee
---------------
By
---------------------------------
Title:
A-12
EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of Barclays Bank PLC,
New York Branch (the "Bank"), hereby gives the following notice to [ ],
------
as trustee and as custodian, with reference to Irrevocable Letter of Credit
No. (the "Letter of Credit") issued by the Bank in favor of [ ],
------- -----
as trustee. Terms defined in the Letter of Credit and used but not defined
herein have the meanings giventhem in the Letter of Credit.
[(1) We have received the amount of $ today in
---------
reimbursement of amounts paid under the Letter of Credit with respect to
Tender Drawings pursuant to Section 4.01 of the Indenture or
Redemption/Mandatory Purchase Drawings pursuant to Section 4.02(a)(i) or
(ii) of the Indenture (other than upon a conversion to a Term Rate to
maturity pursuant to Section 2.03(c) of the Indenture) relating to certain
Bonds, together with interest if any, owing thereon pursuant to the
Reimbursement Agreement. The respective amounts of principal of and interest
on such Bonds covered by that reimbursement are as follows:
Principal: $
-----------------
Interest: $ ]1
-----------------
[(1) We have received notice from the Remarketing Agent that it
has wired us amounts in immediately available funds in connection with a
Tender Drawing pursuant to Section 4.01 of the Indenture or in connection
with a Redemption/Mandatory Purchase Drawing pursuant to Section 4.02(a)(i)
or (ii) of the Indenture (other than upon a conversion to a Term Rate to
maturity pursuant to Section 2.03(c) of the Indenture) which amounts were
received as the purchase price of remarketed Bonds. The sum of (i) the
principal amount of such Bonds and the amount of accrued interest, if any,
thereon, as communicated to us by the Remarketing Agent and (ii) amounts, if
any, heretofore reimbursed to us by or for the account of the Company in
respect of the purchase price of such Bonds paid by us as parts of such
Tender Drawing pursuant to Section 4.01(a) of the Indenture or in connection
with a Redemption/Mandatory Purchase Drawing pursuant to Section 4.02(a)(i)
or (ii) of the Indenture (other than upon a conversion to a Term Rate to
maturity pursuant to Section 2.03(c) of the Indenture) on account of such
principal and interest are as follows:
Principal: $
------------
----------------------------
1. To be used in event of actual receipt of reimbursed amounts.
A-13
Interest: $ ]2
------------
(2) In accordance with the provisions of the Letter of Credit,
the Principal Component and the Interest Component have been reinstated to
the extent of the respective amounts specified in Paragraph (1) above.3
IN WITNESS WHEREOF, the Bank has executed and delivered this
Notice as of the day of , .
-- ------------- ----
[ ]
---------------
By
---------------------------------
Title:
--------------------------
2. To be used in event of notification from the Remarketing Agent that it
has wired immediately available funds to the Bank to reimburse it for
drawings pursuant to Section 4.01 or 4.02(a)(i) and (ii) of the
Indenture.
3. After such reinstatement, the Interest Component must be equal to an
amount calculated by multiplying the Principal Component by 12% and then
multiplying the product thereof by the quotient obtained by dividing 62
by 365.
A-14
EXHIBIT 5
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
------------------------
Barclays Bank PLC,
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Trade Services Group
Re: Irrevocable Letter of Credit No. issued by Barclays Bank
------
PLC, New York Branch
Gentlemen:
The undersigned, as Trustee under the Indenture of Trust dated as
of October 1, 1995 by and between ▇▇▇▇▇ County, Nevada (the "Issuer") and
the undersigned, is named as beneficiary in the Letter of Credit referred to
above (the "Letter of Credit"). The Transferee named below has succeeded
the undersigned as Trustee under such Indenture.
--------------------------------------------
(Name of Transferee)
--------------------------------------------
(Address)
Therefore, for value received, the undersigned hereby irrevocably
instructs you to transfer to such Transferee all rights of the undersigned
to draw under the Letter of Credit.
By this transfer, all rights of the undersigned in the Letter of
Credit, and all obligations of the undersigned under the Custodian
Agreement, dated as of October 1, 1995, between the undersigned, as
"Custodian", and you (the "Custodian Agreement"), are transferred to such
Transferee, and such Transferee shall hereafter have the sole rights as
beneficiary under the Letter of Credit and the obligations as "Custodian"
under the Custodian Agreement; provided, however, that no rights shall be
-------- -------
deemed to have been transferred to such Transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to
transfers.
A-15
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the day of , .
---- ---------- -----
[ ], as Trustee
---------------
By
-------------------------------------------
Title:
The undersigned, [Name of Transferee], hereby accepts the foregoing
transfer of rights under the Letter of Credit and obligations under the
Custodian Agreement.
[Name of Transferee]
By
-------------------------------------------
Title:
Address of Principal
Corporate Trust Office:
[insert address]
A-16
EXHIBIT B
FORM OF CUSTODIAN AGREEMENT
---------------------------
THIS CUSTODIAN AGREEMENT (the "Agreement"), dated as of October 1,
1995, is made by and among NEVADA POWER COMPANY (the "Company"), UNITED
STATES TRUST COMPANY OF NEW YORK, as custodian (such entity and any
successor custodian hereunder being the "Custodian") and BARCLAYS BANK PLC,
NEW YORK BRANCH, as Letter of Credit Bank (the "Bank").
WHEREAS, at the request of the Company, ▇▇▇▇▇ County, Nevada (the
"Issuer") issued and sold its Industrial Development Revenue [Refunding]
Bonds, (Nevada Power Company Project) Series A and C (the "Bonds"), pursuant
to respective Indentures of Trust, each dated as of October 1, 1995 (as
amended, modified or supplemented from time to time, each an "Indenture" and
collectively , the "Indentures"), between the Issuer and United States Trust
Company of New York, as trustee (such trustee and any successor trustee
under an Indenture, in such capacity, being the "Trustee"), for the purpose
stated in the Indentures; and
WHEREAS, to induce the Bank to issue certain letters of credit to
support certain amounts payable on and in respect of the Bonds (each a
"Letter of Credit" and collectively the "Letters of Credit") and to enter
into a Letter of Credit and Reimbursement Agreement, dated as of October 1,
1995, among Barclays Bank PLC, New York Branch, as Administrative Agent and
Letter of Credit Bank, the Banks party thereto and the Company relating
thereto (the "Reimbursement Agreement"), the Company proposes to pledge the
Collateral (as hereinafter defined) and to enter into this Agreement;
NOW, THEREFORE, the Company, the Custodian and the Bank hereby
agree as follows:
ARTICLE l
DEFINITIONS; INTERPRETATION
SECTION 1.1. Definitions. For the purposes of this Agreement,
-----------
terms defined in the Reimbursement Agreement and used but not otherwise
defined herein have the meanings given them in the Reimbursement Agreement,
and the following terms have the meanings indicated:
"Collateral" means each Pledged Bond, all payments of principal
----------
and interest payable on Pledged Bonds, all of the Company's rights to
receive Pledged Bonds and amounts payable thereon and all of the Company's
right, title and interest in and to Pledged Bonds and such principal of and
interest thereon, and all proceeds thereof, as they may from time to time be
B-1
delivered to or held, pending payment by the Custodian, the Remarketing
Agent or the Trustee, in money, securities or collections from or with
respect to any or all of the foregoing.
"Custodian" means United States Trust Company of New York, or such
---------
other Person appointed from time to time by the Bank to act as Custodian
hereunder and accepting such appointment. Unless the Indentures are
appropriately modified to provide for a Person other than the Trustee to act
as Custodian, the entity serving as Trustee for the Bonds shall be the
Custodian hereunder at all times.
"Obligations" means (a) all amounts of principal of and interest
-----------
on each Advance, (b) all other amounts due under or in respect of the
Reimbursement Agreement and (c) all amounts paid or costs or expenses
incurred by the Bank in the collection of any of the foregoing or for the
maintenance, preservation, protection or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or realization upon, the
Collateral or in connection with the enforcement or administration of this
Agreement or the Reimbursement Agreement, in each case irrespective of
whether the obligation to pay any such amount is direct or indirect,
absolute or contingent, joint or several, due or not due, liquidated or
unliquidated, arises by operation of law or otherwise or is from time to
time reduced and thereafter reincurred. To the extent any payment made with
respect to an Obligation is rescinded or recovered or is otherwise avoided
or must be restored under or by reason of any bankruptcy or insolvency
proceedings of the Company or any other Person or otherwise, the amount of
such payment so rescinded, recovered, restored or avoided shall again
constitute an Obligation, as if such payment had never been made.
"Pledged Bond" means each Bond for which payment of the purchase
------------
price is made, in whole or in part, with the proceeds of a drawing by the
Trustee under a Letter of Credit.
"Remarketing Agreement" means each Remarketing Agreement, dated as
---------------------
of October 1, 1995, between the Company, on the one hand, and the
Remarketing Agent, on the other hand as the same shall have been amended,
modified or supplemented from time to time.
SECTION 1.2. Interpretation. The headings of the articles and
--------------
sections hereof are for convenience of reference only and shall not limit or
affect the meaning or construction of any provision hereof.
ARTICLE 2
SECURITY INTEREST
SECTION 2.1. Grant of Security Interest. As security for the due
--------------------------
and punctual payment in full of each of the Obligations, the Company hereby
grants to the Bank a continuing first lien on and security interest in the
Collateral.
SECTION 2.2. Interest Continuing and Absolute. Until payment in
--------------------------------
full of all the Obligations has been indefeasibly made after the
Cancellation Date, the Bank's security
B-2
interest in the Collateral hereunder shall continue in full force and
effect, and it and the Company's obligations hereunder shall be effective
irrespective of any illegality, invalidity or unenforceability of the Bonds,
the Letters of Credit, the Reimbursement Agreement or any other Related
Document.
SECTION 2.3. Perfection. The Company shall perfect the security
----------
interest of the Bank in the Collateral (a) in the case of Pledged Bonds, by
delivering such Pledged Bonds to the Custodian, (b) in the case of cash
proceeds forming part of the Collateral, by delivering the Collateral to the
Bank, (c) in the case of uncertificated securities forming part of the
Collateral, by registering such securities in the name of the Bank or its
designee, or (d) by any other method permitted by the Uniform Commercial
Code as in effect in the State of New York on the date of such perfection.
All steps necessary for such perfection shall be taken by the Company, in
the case of each Pledged Bond forming part of the Collateral, on the day
such Bond becomes a Pledged Bond and, in the case of proceeds, immediately.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. The Company
----------------------------------
represents and warrants to the Bank and, so long as any of the Obligations
remains unpaid, shall be deemed continuously to represent and warrant to the
Bank and the Custodian, as follows:
(a) At the time of delivery or transfer to the Bank or the
Custodian of any Collateral, the Company will have good and marketable
title to and be the sole owner of, such Collateral, free and clear of
all liens and other encumbrances, other than the security interest
created hereby, the Bank' s security interest in such Collateral shall
have been perfected and no financing statement or other instrument with
respect to any of the Collateral shall have been and continue to be
recorded, registered or filed and no security agreement with respect to
any of the Collateral shall have been executed by the Company, other
than with respect to such security interest in favor of the Bank.
(b) The Bank has a valid and perfected first priority
security interest in the Collateral.
(c) The Collateral may be properly pledged hereunder.
(d) No consents or approvals of any Person are required for
the assignment and transfer by the Company of any of the Collateral to
the Bank hereunder, or the subsequent sale or transfer of the
Collateral by the Bank pursuant to the terms hereof.
(e) This Agreement has been duly executed and delivered by
the Company and constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms.
B-3
ARTICLE 4
COVENANTS
SECTION 4.1. Protection of the Bank's Security Interest. The
----------------------------------------------
Company shall defend its title to, and the Bank's security interest in, the
Collateral against all claims of all other Persons, and shall keep the
Collateral free from all liens and encumbrances (other than the Bank's
security interest hereunder) and pay or cause to be paid promptly when due
all taxes, fees, assessments and other charges now or hereafter imposed on
or in respect of any of the Collateral.
SECTION 4.2. Sale of Collateral. The Company shall not, without
------------------
the prior written consent of the Bank, sell, transfer or otherwise dispose
of, or permit any other Person to sell, transfer or otherwise dispose of,
any of the Collateral or any of the Company's interests therein, except in
accordance with the terms of this Agreement, the Indentures and the
Remarketing Agreement. The receipt by the Bank of all or any part of the
proceeds of any sale, transfer or other disposition of any of the
Collateral, except in accordance with the prior sentence, shall not be
deemed or construed to be a consent by the Bank to any such sale, transfer
or other disposition.
SECTION 4.3. Further Assurances. The Company shall execute and
------------------
deliver to the Bank or the Custodian such assignments and other documents
and instruments, and shall take all other action relating to the Collateral
and the preservation, protection or perfection of the Bank's security
interest therein, as the Bank may request, and the Company shall not file or
permit to be filed any financing statement (or amendment or continuation
statement) or execute any security agreement with respect to any of the
Collateral unless it names the Bank as the only secured party. To the extent
permitted by law, the Company hereby appoints the Bank as its attorney-in-
fact (without requiring the Bank to act as such) to perform all acts that
the Bank deems appropriate to preserve, protect and perfect its continuing
security interest in the Collateral or to preserve or protect the
Collateral.
ARTICLE 5
REMEDIES UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
SECTION 5.1. Default Remedies. If an Event of Default under the
----------------
Reimbursement Agreement shall occur and be continuing, the Bank shall be
entitled to exercise any one or more (at the Bank's discretion, at one or
more times) of the following remedies:
(a) The Bank shall have the right to receive the Collateral,
if any, then held by the Custodian, the Remarketing Agent, the Trustee
or any other Person, endorse, assign or deliver in its own name or the
name of the Company any and all checks, drafts and other instruments
for the payment of money relating to or constituting part of the
Collateral, and cause the Collateral to be registered in the name of
the Bank or its designee, and the Company hereby waives presentment,
protest and notice of
B-4
nonpayment of any instrument so endorsed. In furtherance of the
foregoing, the Company hereby irrevocably appoints the Bank, or any
of its officers or designees, the Company's lawful attorney-in-fact
(without requiring the Bank so to act), with power of substitution, in
the name of the Company or in the name of the Bank (i) to endorse the
name of the Company upon any of the Collateral, including proceeds, and
to cause any of the Collateral to be registered in the name of the Bank
or its designee; (ii) to demand, collect, receive payment of, receipt
for and give discharges and releases of any of the Collateral; (iii)
to commence and prosecute any and all actions or proceedings at law or
in equity in any cour t to collect or otherwise realize on any of the
Collateral to enforce any rights in respect thereof; (iv) to initiate,
settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating or pertaining to any of the Collateral; and (v)
to sell, transfer, assign, discount, negotiate or otherwise deal in all
or any portion of the Collateral or the proceeds thereof and generally
to perform all other acts necessary or desirable to realize on, and
obtain the benefits of, the Collateral and otherwise to carry out the
intention of this Agreement, as fully and effectively as though the
Bank were the absolute owner thereof, and the Company hereby ratifies
and confirms all that the Bank shall do by virtue of this appointment.
The Bank shall not, under any circumstances, have any liability for any
error or omission made in the settlement t collection or payment or
other disposition of any or all of the Collateral or of any instrument
received in payment therefor.
(b) The Bank may sell or cause to be sold, in one or more
sales, at such price as the Bank may deem adequate, and for cash or on
credit or for future delivery, with or without assumption of any credit
risk , all or any portion of the Collateral, at public or private sale,
without demand of performance or notice of intention to sell or of time
or place of sale (except such notice as may be required by applicable
statute and cannot be waived), and the Bank may be the purchaser of all
or any portion of the Collateral so sold; provided, however, that the
-------- -------
Bank shall first give notice to the Trustee that an Event of Default
has occurred and is continuing. The purchaser(s) at any such sale shall
thereafter hold the Collateral so sold absolutely, free from any claim
or right whatsoever, including any equity of redemption, of the
Company. Any such demand, notice, claim, right or equity is hereby
expressly waived and released by the Company. Without limiting the
foregoing, if any such notice of the time or place of sale is so
required, the Company agrees that the Bank need not give more than ten
days' notice of the time and place of any public sale or of the time
after which a private sale or other intended disposition is to take
place and that such notice is reasonable notification of such matters .
The Bank shall not, under any circumstances, incur any liability as a
result of the sale of the Collateral or any part thereof at any sale
conducted in accordance with the provisions of this Agreement. The
Company hereby waives any claims against the Bank arising by reason of
the fact that the price at which the Collateral may have been sold at
any private sale was less than the price which might have been obtained
at a public sale or was less than the aggregate principal amount of the
Pledged Bonds or the then total unpaid Obligations.
B-5
(c) The Company recognizes that the Bank may not deem it
desirable to effect a public sale of any or all of the Pledged Bonds or
otherwise but may deem it desirable to resort to one or more private
sales thereof to a restricted group of purchasers who will be obliged
to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or
resale thereof. The Bank shall be under no obligation to delay a sale
of any of the Pledged Bonds for the period of time necessary to permit
the Issuer to register them for public sale under the Securities Act of
1933, as amended (the "Act"), or under applicable state securities
laws, even should the Issuer agree to do so.
(d) The Company shall do or cause to be done all such other
acts and things as may be deemed necessary or desirable by the Bank to
make such sale or sales of any portion or all of the Pledged Bonds
valid and binding and in compliance with all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and
all courts, arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, including
registering such Bonds under the Act, or any state securities laws (to
the extent necessary), all at the Company's expense.
(e) The Company acknowledges that a breach of any of the
covenants contained in this Article 5 will cause irreparable injury to
the Bank and that the Bank has no adequate remedy at law in respect of
any such breach and, as a consequence, agrees that each and every
covenant contained in this Article 5 shall be specifically enforceable
against the Company, and the Company hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred.
SECTION 5.2. Remedies Not Exclusive. (a) The remedies provided
----------------------
for herein are cumulative and are not exclusive of any other rights, powers,
privileges or remedies provided by law or under the Reimbursement Agreement,
including, without limitation, all rights and remedies of a secured party
under Article 9 of the Uniform Commercial Code as in effect in the State of
New York on the date of the exercise of any such remedy. The exercise by the
Bank of any one or more remedies under Section 5.1, above, shall not
constitute a waiver, or otherwise prohibit, the exercise by the Bank of
other remedies provided herein or by law at the same or other times.
(b) The Bank shall not be required to exercise any
particular rights, powers, remedies or benefits hereunder or under the
Reimbursement Agreement or any Related Document. Without limiting the
generality of the foregoing, the Bank (i) shall be entitled to seek to
realize upon or enforce the Collateral in such order as it may from time to
time determine and without regard to whether or not any other collateral or
security for any of the Obligations shall have been resorted to, and (ii)
shall not be required to exhaust or enforce any particular portion of the
Collateral before seeking to realize or enforce upon any other portion
thereof.
B-6
ARTICLE 6
COLLECTIONS BY THE COMPANY AND APPLICATIONS
OF PROCEEDS IN RESPECT OF COLLATERAL
SECTION 6.1. Collections on Pledged Bonds by the Company. (a)
----------------------------------------------
If, while any of the Obligations are outstanding, the Company becomes
entitled to receive or receives any payment in respect of any Pledged Bond,
the Company shall accept such payment as the Bank's agent, hold it in trust
on behalf of the Bank and deliver it forthwith to the Bank for application
to satisfaction of the Obligations then due and payable. All sums of money
so paid in respect of any payment of interest on, or any portion of purchase
price equal to the amount of accrued interest on, any Pledged Bond which are
received by the Company and paid to the Bank shall be credited against the
obligation of the Company to pay interest to the Banks set forth in Sections
2.04 and 2.05 of the Reimbursement Agreement. All sums of money so paid in
respect of any payment of principal of, or any portion of purchase price
equal to the principal amount of, any Pledged Bond which are received by the
Company and paid to the Bank shall be credited against the obligation of the
Company to pay principal to the Banks set forth in Sections 2.04 and 2.05 of
the Reimbursement Agreement.
SECTION 6.2. Application of Proceeds. All proceeds received from
-----------------------
the sale or other disposition of, or realization on or with respect to, all
or any part of the Collateral shall be applied by the Bank, in such order as
the Bank, in its sole discretion, may determine to the payment of the costs
and expenses of such sale, disposition or realization, including, without
limitation, reasonable fees and expenses of counsel for the Bank and all
expenses, liabilities and advances of the Banks in connection therewith, and
to the payment of the remaining Obligations.
ARTICLE 7
RELEASE OF COLLATERAL;
COMPANY'S LIABILITY FOR DEFICIENCY
SECTION 7.1. Release of Collateral. If (a) the Company prepays
---------------------
or causes to be prepaid any Advance pursuant to Section 2.06 of the
Reimbursement Agreement, (b) the Remarketing Agent causes Pledged Bonds at
the time held hereunder to be sold, or (c) the Obligations are otherwise
satisfied, upon receipt of such prepayment or of the proceeds of such sale
or other satisfaction of the Obligations, Pledged Bonds in an aggregate
principal amount equal to the prepayment so made, or the principal amount of
Pledged Bonds so sold, or the Obligations so satisfied, shall be
automatically released from the lien of this Agreement and the Company or
its designee shall be entitled to have the released Bonds delivered to the
Remarketing Agent, the Company or such other Person as designated by the
Company in accordance with the terms of the relevant Indenture; provided,
---------
however, that before any delivery of such released Bonds, the Trustee and
-------
the Custodian shall have received notice from the Bank, in the form of
Exhibit 4 to the relevant Letter of Credit, of the reinstatement of the
amounts so
B-7
prepaid, sold or satisfied as available under such Letter of Credit and such
notice shall constitute notice to release the Pledged Bonds pursuant to
Section 406(b) of the Indenture.
SECTION 7.2. Company's Liability for Deficiency. The Company
------------------------------------
shall in any event remain liable for any deficiency remaining unpaid after
the application of the proceeds of the Collateral to the satisfaction of the
Obligations.
ARTICLE 8
GENERAL
SECTION 8.1. Expenses. The Company shall pay to the Bank all
--------
expenses (including reasonable fees and expenses of counsel) of, or incident
to, any actual or attempted sale or other disposition of, or any exchange,
enforcement (whether through negotiations, legal proceedings or otherwise),
collection, compromise or settlement of or with respect to, all or any of
the Collateral, by litigation or otherwise. The Company shall reimburse the
Bank on demand for all reasonable costs and expenses incurred in connection
with the negotiation, preparation, execution and administration of this
Agreement, including, without limitation, any fees or expenses (including
reasonable fees and expenses of counsel to the Custodian) paid by the Bank
to the Custodian for its services in connection with this Agreement.
SECTION 8.2. Notices. All notices and other communications
-------
provided for hereunder shall be in writing (including telegraphic
communication) and mailed, telecopied, telexed, telegraphed or delivered to
the parties to the telex or telecopier number or address (as the case may
be) specified for the intended recipient on the signature page hereof, or to
such other number or address as such recipient may have last specified by
notice to the other party. All such notices and communications shall, when
mailed, telecopied, telexed or telegraphed, be effective when deposited in
the mails or sent by telecopy or telex or delivered to the telegraph
company, respectively, addressed as aforesaid.
SECTION 8.3. Remedies and Waivers. No failure or delay on the
--------------------
part of the Bank in exercising any right hereunder shall operate as a waiver
of, or impair, any such right. No single or partial exercise of any such
right shall preclude any other or further exercise thereof or the exercise
of any other right. No waiver of any such right shall be effective unless
given in writing. No waiver of any such right shall be deemed a waiver of
any other right hereunder. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 8.4. Amendment. No amendment or waiver of any provision
---------
of this Agreement, nor consent to any departure by the Company therefrom,
shall in any event be effective unless the same shall be in writing and
signed by the Custodian and the Bank, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
SECTION 8.5. Assignment. (a) This Agreement shall be binding
----------
upon and inure to the benefit of the Custodian, the Bank and the Company and
their respective successors
B-8
and assigns; provided, however, that the Company may not assign any of its
-------- -------
rights or obligations under this Agreement without the prior written consent
of the Bank.
(b) If the Bank or the Custodian assigns or otherwise
transfers any of its rights and obligations hereunder, each reference
in this Agreement to the Bank or the Custodian, as the case may be,
shall be deemed to be a reference to the Bank or the Custodian, as the
case may be, and the Person or Persons to which such rights and
obligations were assigned and transferred to the extent of their
respective interests.
SECTION 8.6. Governing Law. This Agreement shall be governed
-------------
by, and construed and interpreted in accordance with, the laws of the State
of New York.
SECTION 8.7. Custodian Appointed Agent. The Bank hereby appoints
-------------------------
the Custodian as its agent to receive and hold Pledged Bonds constituting
Collateral granted hereunder for the Bank's account. The Company
acknowledges such appointment and agrees with the Bank and the Custodian,
which by its execution of this Agreement accepts such appointment, that, for
so long as this Agreement shall remain in full force and effect, all
certificates or instruments representing or evidencing the Pledged Bonds
shall be delivered to and held by the Custodian, as agent for the Bank.
SECTION 8.8. Reasonable Care. The Custodian shall be deemed to
---------------
have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Custodian accords its own property.
SECTION 8.9. Integration of Terms. This Agreement contains the
--------------------
entire agreement between the parties relating to the subject matter hereof
and supersedes all oral statements and prior writings with respect thereto.
SECTION 8.10. Counterparts. This Agreement may be executed in
------------
counterparts, and such counterparts taken together shall be deemed to
constitute one and the same agreement.
SECTION 8.11. Severability. Any provision of this Agreement
------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
B-9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
NEVADA POWER COMPANY
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer
By
-----------------------------------
Title:
THE UNITED STATES TRUST COMPANY OF
NEW YORK, as Custodian
Attention:
By:
------------------------------------
Title:
BARCLAYS BANK PLC, NEW YORK BRANCH
By
B-10
Title:
EXHIBIT C
[LETTERHEAD OF GENERAL COUNSEL OF THE COMPANY]
[Date of Issuance of
Letter of Credit]
To Barclays Bank PLC, New York Branch,
as Administrative Agent and the Banks party
to the Reimbursement Agreement referred to below
Nevada Power Company
--------------------
Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(k) of
the Letter of Credit and Reimbursement Agreement, dated as of October 1,
1995 (the "Reimbursement Agreement"), among Nevada Power Company (the
"Company"), Barclays Bank PLC New York Branch, as Letter of Credit Bank and
Administrative Agent, and the Banks party thereto. Terms defined in the
Reimbursement Agreement are used herein as therein defined.
I am General Counsel of the Company and, as such, have acted as
counsel for the Company in connection with the preparation, execution and
delivery of, and the closing on this date under, the Reimbursement
Agreement.
In that connection, I have examined:
(1) The Reimbursement Agreement .
(2) The Related Documents.
(3) The other documents furnished by the Company pursuant to
Article III of the Reimbursement Agreement, including the PUC Order.
(4) The Articles of Incorporation of the Company and all
amendments thereto (the "Charter").
(5) The by-laws of the Company and all amendments thereto (the
"By-laws").
C-1
(6) A certificate of the Secretary of State of the State of
Nevada, dated [ ], attesting to the continued corporate
----------------
existence and good standing of the Company in that State.
I have also examined the originals, or copies certified to my
satisfaction, of all of the indentures, loan or credit agreements, leases,
guarantees, mortgages, security agreements, bonds, notes and other
agreements or instruments, and all of the orders, writs, judgments, awards,
injunctions and decrees (each, a "Restrictive Document"), which affect or
purport to affect the Company's right to borrow money or the Company's
obligations under the Reimbursement Agreement or the Related Documents to
which it is a party. In addition, I have examined the originals, or copies
certified to my satisfaction, of such other corporate records of the
Company, certificates of public officials and of officers of the Company,
and agreements, instruments and other documents, as I have deemed necessary
as a basis for the opinions expressed below. As to questions of fact
material to such opinions, I have, when relevant facts were not
independently established by me, relied upon certificates of the Company or
its officers or of public officials. I have assumed the due execution and
delivery, pursuant to due authorization, of the Reimbursement Agreement and
the Related Documents by the parties thereto other than the Company.
I am qualified to practice law in the State of Nevada and I do not
express any opinion on any laws other than the laws of the State of Nevada
and the Federal laws of the United States.
Based upon the foregoing and upon such investigation as I have
deemed necessary, I am of the following opinion:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada.
2. The execution, delivery and performance by the Company of the
Reimbursement Agreement and the Related Documents to which it is a
party are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i)
the Charter or the By-laws or (ii) any law, rule or regulation
applicable to the Company (including, without limitation, Regulation X
of the Board of Governors of the Federal Reserve System) or (iii) any
contractual or legal restriction contained in any Restrictive Document
or, to the best of my knowledge, contained in any other similar
document. The Reimbursement Agreement and the Related Documents to
which it is a party have been duly executed and delivered on behalf of
the Company.
3. No authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Company
of the Reimbursement Agreement and the Related Documents to which it is
a party, except for the PSC Order, which has been duly obtained, is
final and is in full force and effect. The PSC Order is not the
subject of appeal or reconsideration or other review, and no subsequent
appeal or reconsideration or
C-2
other review of the PSC Order will have any adverse effect upon the
legality, validity or enforceability of the Company's obligations under
the Reimbursement Agreement or the Related Documents to which the
Company is a party.
4. There are no pending or, to the best of my knowledge, overtly
threatened actions or proceedings against the Company or any of its
Subsidiaries before any court, governmental agency or arbitrator (i)
which purport to affect the legality, validity, binding effect or
enforceability of the Reimbursement Agreement or any Related Document
to which the Company is a party or (ii) except as disclosed in the
Company's December 31, 1994] Report on Form 10-K as filed with the
Securities and Exchange Commission, which are likely to have a
materially adverse effect upon the financial condition or operations
of the Company or any of its Subsidiaries; and there has occurred no
material adverse developments in any such action or proceeding so
disclosed.
Very truly yours,
C-3
EXHIBIT D
[LETTERHEAD OF SPECIAL COUNSEL TO THE COMPANY]
[Dates of Issuance of
Letter of Credit]
To Barclays Bank PLC, New York Branch,
as Administrative Agent and the Banks party
to the Reimbursement Agreement referred to below
Nevada Power Company
--------------------
Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(l) of
the Letter of Credit and Reimbursement Agreement, dated as of October 1,
1995 (the "Reimbursement Agreement"), among Nevada Power Company (the
"Company"), Barclays Bank PLC, New York Branch, as Administrative Agent and
Letter of Credit Bank, and the Banks party thereto. Terms defined in the
Reimbursement Agreement are used herein as therein defined.
We have acted as Special Counsel to the Company in connection with
the preparation, execution and delivery of, and the closing on this date
under, the Reimbursement Agreement.
In that connection, we have examined:
(1) The Reimbursement Agreement.
(2) The Related Documents.
(3) The other documents furnished by the Company pursuant to
Article III of the Reimbursement Agreement, including the PUC
Order .
In addition, we have examined the originals, or copies certified
to our satisfaction, of such other corporate records of the Company,
certificates of public officials and of officers of the Company, and
agreements, instruments and other documents, as we have deemed necessary as
a basis for the opinions expressed below. As to questions of fact material
to such opinions, we have, when relevant facts were not independently
established by us, relied upon certificates of the Company or its officers
or of public officials. We have assumed the due execution and
D-1
delivery, pursuant to due authorization, of the Reimbursement Agreement
and the Related Documents by the parties thereto other than the Company.
We are qualified to practice law in the State of California and
are familiar with the laws of the State of Nevada to the extent necessary to
permit us to express the opinions hereinafter set forth in paragraph 3.
Accordingly, our opinions herein are limited to the laws of the State of
California, the State of Nevada and the Federal laws of the United States.
For purposes of the opinions expressed below, we have relied with
your permission on the opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel of
the Company, being delivered to you on this date pursuant to Section 3.01(m)
of the Reimbursement Agreement.
Based upon the foregoing and upon such investigation as we have
deemed necessary, we are of the opinion that
1. Each of the Reimbursement Agreement, the Custodian Agreement
and the other Related Documents to which the Company is a party is the
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
2. The Custodian Agreement is effective to create a valid and
perfected security interest in any right, title and interest in the
Bonds from time to time pledged thereunder superior in right to any
liens, existing or future, which the Company, the Issuer, the Trustee,
the Remarketing Agent or any other Person may have against such Bonds
or any interest therein.
3. In any action or proceeding arising out of or relating to the
Reimbursement Agreement or the Custodian Agreement in any court of the
State of Nevada or in any Federal court sitting in the State of Nevada,
such court would recognize and give effect to the provisions of Section
7.10 of the Reimbursement Agreement and Section 8.6 of the Custodian
Agreement wherein the parties thereto agree that the Reimbursement
Agreement and the Custodian Agreement, as the case may be, shall be
governed by, and construed in accordance with, the laws of the State
of New York. Without limiting the generality of the foregoing, a court
of the State of Nevada or a Federal court sitting in the State of
Nevada would apply the usury law of the State of New York, and would
not apply the usury law of the State of Nevada, to the Reimbursement
Agreement. In this connection, we call your attention to the fact that
the Supreme Court of Nevada has indicated in certain of its opinions
that it may decline to enforce laws of other jurisdictions which it
believes to be contrary to the public policy of Nevada. Although the
Supreme Court of Nevada has sustained a decision enforcing the laws of
another state, including usury provisions, we cannot give any assurance
that, under any specific circumstances, the courts might not decline to
enforce New York usury or other laws on public policy grounds not
previously indicated (although no facts or circumstances have come to
our attention in the context of the present transaction that lead us to
believe that the present transaction would be contrary to public policy
D-2
considerations articulated by the Supreme Court of Nevada to date).
However, if a court were to hold that the Reimbursement Agreement and
the Custodian Agreement are governed by, and to be construed in
accordance with, the laws of the State of Nevada, the Reimbursement
Agreement and the Custodian Agreement would be, under the laws of the
State of Nevada, legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective
terms.
4. The offer, sale and delivery of the Bonds under the
circumstances contemplated by the Related Documents do not require
registration of the Bonds under the Securities Act of 1933, as amended,
and do not require compliance with the qualification requirements of
the Trust Indenture Act of 1939, as amended.
5. No authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Company
of the Reimbursement Agreement and the Related Documents to it is a
party, expect for the PSC Order, which has been duly obtained, is final
and is in full force and effect. The PSC Order is not the subject of
appeal or reconsideration or other review, and no subsequent appeal or
reconsideration or other review of the PSC Order will have any adverse
effect upon the legality, validity or enforceability of the Company's
obligations under the Reimbursement Agreement or the Related Documents
to which the Company is a party.
Our opinions set forth in paragraphs 1 and 3, above, are subject
to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally and the
effect of general principles of equity (regardless of whether considered in
a proceeding in equity or at law).
Very truly yours,
D-3
